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CHATTANOOGA, Tenn. (AP) — The co-founders of a Hixson nursing home business paid themselves six-figure salaries and drove company-financed Porsches while failing to pay employees, utility bills, taxes and creditors, according to court documents.
The Chattanooga Times Free Press (http://bit.ly/1oOIjV4 ) reports that since December, eight nursing homes operated by New Beginnings Care have flunked inspections. Six have closed, including a nursing home in Youngstown, Ohio, where inspectors found residents in adult diapers "saturated" with urine or feces. Inspectors said the home was understaffed because workers had quit over not being paid.
New Beginnings will spend Friday in U.S. Bankruptcy Court in Chattanooga trying to hang on to seven nursing homes it still operates, including two in Tybee Island, Georgia, owned by real estate investment trust ADK Georgia.
They were part of a master lease with a third nursing home in Jeffersonville, Georgia, which is due to close in early March after state inspectors found "squalid" conditions including overflowing toilets in a locked unit for Alzheimer's patients.
ADK Georgia doesn't want to let New Beginnings walk away from the Jeffersonville nursing home — where it owes more than $400,000 in back rent — and keep the two on Tybee Island, ADK bankruptcy attorney Ted Stapleton said.
When New Beginnings filed for bankruptcy on Jan. 22, the company said it court filings it played a "vital economic role providing over 1,300 jobs and a vital role in proving quality care for over 800 nursing home residents."
New Beginnings said it had to seek bankruptcy protection because the state of Georgia was withholding $116,000 each week in Medicaid payments to recoup more than $3 million in unpaid bed taxes. Ohio also was holding back $104,000 per month in Medicaid, the filing said, to recoup back bed taxes at two homes the company operated there.
New Beginnings owes close to $7 million to unsecured creditors, including $1 million to the Bureau of TennCare, according to the records. And it owes $2.8 million to Marietta, Georgia,-based Gemino Healthcare Finance for a revolving line of credit.
Trent Tolbert and Debbie Jones founded New Beginnings in 2011. They previously held executive positions at two Chattanooga-area nursing home businesses: Grace Healthcare and Life Care Centers of America. At New Beginnings, Tolbert paid himself $36,000 a month. Jones earned another $24,000 a month.
The John M. Reed Nursing Home, in Limestone, hired New Beginnings in April 2013 as its operator.
Nursing home attorney Jim Wheeler said New Beginnings did a good job at first, but soon local vendors complained they weren't getting paid, the water and the power bills went past due, and state bed taxes weren't remitted.
In December, inspectors found staff didn't provide timely patient incontinence care, didn't prevent avoidable pressure ulcers and failed to administer antibiotics, among other problems. Medicaid and Medicare payments were cut off, and the home lost 40 of its 43 patients.
The nursing home hopes to regain certification for Medicaid in four months, Wheeler said, but he doesn't expect its reputation to bounce back so quickly.
"It'll take years to recover from this," he said.
An attorney for Tolbert declined to speak to the newspaper.
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Information from: Chattanooga Times Free Press, http://www.timesfreepress.com
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