The parent of an Alabama-based ambulance service that went out of business this week in Mississippi and six other states has said it will make good on employee pay checks that are bouncing.

Emergystat, of Vernon, Ala., shut down at midnight Wednesday, sending officials in 23 Mississippi counties scrambling for interim service. State health officials said service is available in all 23 counties after other ambulance companies moved in.

Mississippi was not the only state affected by the shutdown. Emergystat’s operations in Alabama, Tennessee, Virginia, Louisiana, Kansas and Florida also ceased.

Former employee Mark Pierce of Philadelphia learned Friday that the most recent paycheck he received from the company bounced when he tried to buy lunch at a Sonic and his debit card was declined. He’s worried about the paycheck he was supposed to receive next week.

“This is devastating to me,” said Pierce, who has six children ranging in age from 2 to 13 years. “We’re employed by another service for now, but we’re broke.”

Larry Lunan, the chief executive officer and president of Paladin Holdings Inc., Emergystat’s parent company, said he hopes to make good on the checks by Monday or Tuesday. Lunan also heads Southland Health Services Inc. Emergystat is a subsidiary of Southland Health Services Inc., headquartered in Florida.

Lunan said about 400 people were employed by Emergystat in Mississippi, including part-time employees. The weekly payroll for the company’s Mississippi employees totaled more than $150,000, Lunan said.

Lunan said Friday he didn’t know how many paychecks would be returned.

Two weeks ago, $20,000 worth of Emergystat payroll checks bounced. Another $47,000 worth of checks were returned this week, Lunan said.

The financial problems with the ambulance and emergency services company have existed since before Lunan purchased it in 2005, Lunan said.

“The company had a lot of problems and issues, period,” Lunan told The Clarion-Ledger newspaper. “We’ve spent the last few years trying to fix them.”

On Oct. 4, 2007, Emergystat’s Alabama operation filed for Chapter 11 bankruptcy protection. Federal bankruptcy laws govern how companies go out of business or recover from crippling debt.

A company may use Chapter 11 to reorganize and try to become profitable again.

Lunan said Emergystat owed millions of dollars worth of debt to General Electric Capital Corp. as well as the federal government for unpaid taxes.

The Mississippi operation owes the state more than $780,000 in unpaid taxes since 2005, said State Tax Commission spokeswoman Kathy Waterbury.

Debts aside, a main reason paychecks are bouncing is because the company has not received at least $182,000 worth of Medicare insurance payments due to Emergystat, Lunan said. Another $300,000 is tied up with the bankruptcy case, he said.

“We’ve been calling our insurance people every day,” Lunan said.

The insurance payments were supposed to have been cut Wednesday, but the insurance checks still have not been processed, Lunan said.

“We’ve got two priorities,” Lunan said. “First, the reinstatement of the insurance payments. Then we can fix the payroll checks.”

With these larger financial issues looming, the taxes owed Mississippi are a low priority, Lunan said.

At least one owner of a competing emergency service provider has been impressed by how Mississippi Emergystat employees have reacted to the situation.

“The Emergystat employees are heroes,” said Kevin Smith, owner of a small ambulance service provider called ASAP Ambulance, which operates in some of the same rural counties Emergystat served.

ASAP is providing assistance under temporary contracts with Newton, Kemper and Smith counties.

“They never left their ambulances even though they weren’t sure about what was going to happen,” Smith said of the former Emergystat employees. “Residents were never left without coverage. They never left the citizens in jeopardy.”