April 5 (Bloomberg) -- Gingrich Group LLC, a health-care “think tank” founded by U.S. Republican presidential candidate Newt Gingrich, sought bankruptcy protection from creditors without citing a reason.
Gingrich Group, which operates the Center for Health Transformation, yesterday listed debt of as much as $10 million and assets of less than $100,000 in Chapter 7 documents filed in U.S. Bankruptcy Court in Atlanta, where it is based. Chapter 7 of the U.S. Bankruptcy Code is used to liquidate assets by companies that don’t intend to continue operating.
Gingrich, 68, a former House speaker and Georgia state representative, founded the center in 2003 as a project of the Gingrich Group, according to its website. Members paid as much as $200,000 a year, according to company documents.
The center’s membership “really declined” after Gingrich ended his involvement in May to run for president, said Stefan Passantino, a lawyer for Gingrich’s campaign who formerly represented the center. He described Gingrich’s thought process on health reform as “the secret sauce” that drew members.
“It’s Newt’s brain that people wanted,” Passantino said.
The Gingrich Group and Center for Health Transformation grossed $55 million between 2001 and 2010, Gingrich’s campaign said in November. His American Solutions for Winning the Future took in another $50 million in contributions, according to the Washington-based Center for Public Integrity, which tracks political expenditures. American Solutions shut down in July as Gingrich prepared for his presidential bid.
The Atlanta Business Chronicle reported the Gingrich Group’s filing earlier today.
Gingrich is owed between $5 million and $25 million on a convertible promissory note from Gingrich Group to another of his many companies, Gingrich Productions Inc., according to financial disclosure report on the opensecrets.org website.
It is unclear if any of the note has been paid or whether any will be paid once assets are sold and proceeds are distributed to as many as 99 creditors.
The center gained attention during the debate leading to passage of the 2010 health-care law, when it issued dozens of press releases in opposition.
In a March 5, 2010, release, Gingrich praised a congressman for staying in office “to help defeat a proposal that would ruin the American health care system and increase the national debt.”
Gingrich has said he provided “strategic advice” to his health center clients and held brainstorming sessions with them on health reforms.
The Center for Health Transformation hasn’t disclosed a complete member list. Companies including drugmaker Johnson & Johnson, health insurer Blue Cross & Blue Shield Association, U.K. drugmaker AstraZeneca Plc and Wellpoint Inc., the nation’s largest insurer by revenue, have identified themselves as Gingrich clients. The Pharmaceutical Research and Manufacturers of America, the industry trade group known as PhRMA, also had a contract with the center.
A book released by the center in May 2003 called “Saving Lives and Saving Money” describes a “vision of a 21st century system of health and health care.”
The center boasted of its role in helping to pass the 2003 expansion of Medicare to include prescription drugs, in an electronic newsletter which is no longer available.
Worked With Bush
Gingrich testified before Congress and “worked with the Bush administration,” the newsletter said. Gingrich and several center clients attended the bill-signing ceremony that December.
Gingrich didn’t register as a lobbyist and said he didn’t lobby, a denial opponents including Mitt Romney and Rick Perry said they found unbelievable.
Susan Meyers, a spokeswoman for the center, referred questions to bankruptcy attorney George M. Geeslin, who declined to comment. R.C. Hammond, Gingrich’s spokesman, wasn’t immediately able to respond to a call and e-mail for comment on the bankruptcy.
Gingrich has vowed to continue campaigning for the Republican presidential nomination after losing recent primary elections. His campaign reported more than $1.5 million in debts at the end of February, according to the most recent Federal Election Commission filings available.
The bankruptcy case is In re Gingrich Group LLC, 12-59065, U.S. Bankruptcy Court, Northern District of Georgia (Atlanta).
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