Once-lauded Nashua medical company files for bankruptcy
Legal entanglement with Panama firm contributed to Skelley Medical’s action
Skelley Medical Company, a Nashua firm once hailed by state and federal officials as a model exporter, filed for Chapter 7 bankruptcy on Black Friday, claiming that it owes more than $2 million with only $14,414 in assets.
The company, according to the filing, owed at least $362,000 to Pallas Global/PMG Distressed Asset Co., a Panama investment company.
Pallas sought slightly more than that in a federal lawsuit it filed in October 2013 against Skelley. Pallas and Skelley reached a confidential settlement of that suit in April 2014, but, according to the bankruptcy filing, there is an ongoing action still pending in Hillsborough County Superior Court.
The federal suit alleged that Skelley Medical, its founder and president, William R. (Bill) Skelley, and his son, William C. Skelley (who heads an investment fund in New York City and is a founder of Pallas, according to his LinkedIn page), used their positions as Pallas board members and agents to divert the funds, which were supposed to be invested in South Florida real estate.
Instead, the complaint charges, the younger Skelley personally authorized the transfers to his father’s company.
The Skelleys maintained that the $356,037.16 – transferred in seven different transactions from November 2010 to May 2011 – was a loan, according to the suit. But Pallas said that the loan agreement between father and son – with a 1.5 percent interest rate to be repaid in two months – wasn’t signed until May 6, 2011, after Pallas learned of the transfers.
The suit alleged that the agreement was a “sham” that was never approved by a majority of disinterested Pallas board members. A message left at Bill Skelley’s home phone was not returned by deadline, but he has previously told NH Business Review that he was “flabbergasted” by the suit.
Skelley moved his company to New Hampshire at the invitation of then-Gov. John Lynch and has been praised by President Obama and U.S. Sen. Jeanne Shaheen. In 2012, the U.S. Small Business Administration recognized the firm as the Exporter of the Year for both New Hampshire and New England in 2012
Bill Skelley founded the company in 1997 in Belmont, Mass., looking to address “the reduction of global healthcare costs by providing affordable comprehensive medical equipment solutions,” according to the company’s website.
Skelley Medical, which was located on Technology Drive in Nashua at the time of the bankruptcy filing, recently moved from Hollis. It reported business income of $1.9 million in 2013, $1.4 million in 2014 and $557,000 in 2015.
Santander Bank is the only secured creditor, with a $324,000 claim, and the Internal Revenue Service claims it is owed $44,680 in quarterly tax payments.
Some $1.7 million of the debt is owed to unsecured creditors. The biggest amount – $425,000 – is owed to Roy Christianson, an apparent individual investor from Irvine, Calif., followed by another $365,000 owed to Santander, the aforementioned $362,000 owed to Pallas and $348,000 owed to Kathleen D. Bussiere, in care of an attorney in Boston.
In addition to the Pallas suit, P&B Realty Trust has filed a pending landlord-tenant action in Nashua District Court, and Body1 Inc. has filed a civil collection action, also in Nashua court.