One of the nation’s largest Social Security disability firms is preparing for a possible chapter 11 protection filing as soon as this week as it faces roughly $40 million of debt and shrinking demand for its services amid tightening government scrutiny of claims, the Wall Street Journal reported on Saturday. Binder & Binder, founded by brothers Harry and Charles Binder, is working with law firm Lowenstein Sandler LLP and turnaround firm Development Specialists Inc. to prepare the chapter 11 filing. The firm, which is dependent upon government-paid fees earned from shepherding Social Security disability claimants through the system, owes about $23 million to lenders U.S. Bank and Capital One Bank. The firm owes about another $16 million in unsecured debt to Stellus Capital Management, a spinoff of investment firm D.E. Shaw & Co.
