Loveland, Boulder dermatology clinics file for Chapter 11 protection

LOVELAND — Lake Loveland Dermatology PC, which operates clinics and skin-care centers in Loveland, Greeley, Fort Collins, Sterling and Estes Park, and Skin PC, which does business in Boulder as Ideal Dermatology, recently filed for Chapter 11 bankruptcy protection.

Both businesses are owned and operated by dermatologist Dr. Kevin Mott, who has asked that the U.S. Bankruptcy Court for the District of Colorado jointly administer bankruptcy proceedings for both companies.

Lake Loveland Dermatology was founded by Dr. Patrick Lillis, who sold the business to Mott in 2016 in exchange for a promissory note for more than $8.7 million, court documents show.

When he bought LLD, Mott hoped to expand into the Northern Colorado market, but the company “is not generating sufficient revenue to maintain payments on the note,” according to documents filed with the bankruptcy court.

Lillis is listed as one of the companies’ biggest unsecured creditors

Skin PC assets are between $1 million and $10 million, and liabilities are between $10 million and $50 million, according to the bankruptcy filing.

LLD filed a motion last week to allow for the continued payment of salaries and wages to its 38 employees as reorganization efforts begin. Skin PC filed a similar motion seeking permission to pay its nine employees.

“The debtor seeks authority to pay the employee payroll obligation because substantial delays in paying it will likely adversely affect the debtor’s relationship with its employees,” according to court documents. “The debtor maintains a number of employees, with each of the employees providing skilled services that are integral to the debtor’s provision of ongoing medical services. employee support for the debtor’s reorganization efforts and continued employment is critical to the debtor’s success. The debtor cannot afford substantial attrition in its workforce at this stage in its reorganization process.”

Lake Loveland Dermatology has also requested to be released from lease obligations for the company’s clinic in Greeley. The firm leases space in a building at 6106 W. 20th St. from 790 Eisenhower LLC, a company registered to a Loveland address associated with Lillis.

The parties entered into a 10-year lease in 2016, according to LLD’s bankruptcy filing documents.

LLD “has examined its present and ongoing business operations, its strategy for reorganizing under Chapter 11, and what it believes to be in the best interest of creditors of the estate, and has determined to reject its lease agreement with Eisenhower,” court documents show. “Indeed, retention of the premises in question has become burdensome in that patient visits are insufficient to fill one day a week of staff time. Patients visiting the Greeley facility can be directed to one of debtor’s other facilities.”

A preliminary hearing in the bankruptcy case was scheduled for Tuesday afternoon.

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