NewCare Health Corp. files Chapter 11.Atlanta-based nursing home operator NewCare Health Corp. has filed for Chapter 11 bankruptcy protection. The petition was filed in Worcester, Massachusetts, by Lenox Healthcare, a management company which has been responsible for NewCare's operations since June 1. "The petition was necessary in order to provide NewCare with an adequate period of time to restructure its obligations and implement the financial plan under Lenox management," Lenox President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Thomas Clarke, said in a prepared statement. NewCare has obtained debtor-in-possession financing Debtor-in-possession financing New debt obtained by a firm during the Chapter 11 bankruptcy process, Federal Bankruptcy Rule 4001 (c)(1). This financing is unique because it is secured, that is, it has priority over existing debt, equity and other claims. , which Lenox believes is sufficient to meet NewCare's payroll and vendor obligations. In May, NewCare, which operates 25 nursing homes, announced a restructuring to save $5 million per year in corporate overhead. The company also recently sold five facilities that had lost more than $2 million in 1998. Proceeds from the sale reduced debt by about $21.5 million. In February, several NewCare executives were charged with Medicaid fraud Medicaid fraud The fraudulent billing of Medicaid by physicians or other health care providers, especially international medical graduates and psychiatrists. See Medicaid. , racketeering Traditionally, obtaining or extorting money illegally or carrying on illegal business activities, usually by Organized Crime . A pattern of illegal activity carried out as part of an enterprise that is owned or controlled by those who are engaged in the illegal activity. , grand theft; and abusing the elderly in connection with the running of a Gainesville, Florida Gainesville is the largest city and county seat of Alachua County, Florida.GR6 Gainesville is home to the University of Florida, the largest university of the State University System of Florida and the third-largest university in the United States. , nursing home. And Sun Healthcare Group Inc. recently sued NewCare Chairman and CEO Chris Brogdon and President Darrell Tucker, in connection with Sun's acquisition of Retirement Care Associates Inc. The suit alleges that Brogdon and Tucker, formerly chairman and treasurer, respectively, of RCA See RCA connector and video/TV history. , transferred funds out of the company into NewCare before selling it to Sun. |
|
||||||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion