Advertising firm with UPMC ties goes bankrupt

The local advertising firm founded and owned by Douglas Romoff, brother of University of Pittsburgh Medical Center CEO Jeffrey Romoff, filed for bankruptcy, listing about $7,000 in assets and more than $700,000 in debts.

The Paradiso Group's major customer was UPMC, which paid the firm $2.5 million in the fiscal year ending July 1, 2009, according to recently released tax returns.

Last week's filing by Paradiso in U.S. Bankruptcy Court, Downtown, lists a half dozen unpaid bills, including $660,420 in lease payments owed to First Side Waterfront Limited Partnership. Other debts include $14,849 owed to American Express, $16,440 to Toshiba Business Solutions and $12,994 to VW Credit.

The assets include assorted office equipment and supplies and $608 in a checking account.

In an interview in May, Douglas Romoff said he had to shut down the company after UPMC abruptly canceled his contract. He said he was never given a reason for the cancellation.

He did not respond to a request for comment Tuesday. He relocated to Florida where he is running a television production company.

UPMC officials said the cancellation was part of a series of budget cuts forced by a business downturn.

The hospital system replaced Douglas Romoff's company with Sitrick and Co., a California-based advertising firm with nationwide clientele. More recently, Sitrick was replaced by Grey New York in a deal industry experts said could be worth $20 million.

UPMC's latest advertising campaign is set to kick off in the fall and will feature print, television and billboards.

The details of UPMC's dealing with Douglas Romoff were disclosed for the first time this year because of new expanded reporting requirements by the IRS. Overall, UPMC reported spending more than $10 million on companies with ties to its board members and top executives.