Bankrupt Hixson nursing home operators paid themselves, family members $1 million in 2015

Bankrupt Hixson nursing home operators paid themselves, family members $1 million in 2015

March 30th, 2016 by Tim Omarzu in Business Around the Region

New Beginnings Care's headquarters on Hixson Pike.

Photo by Contributed Photo /Times Free Press.

Photo by Contributed Photo /Times Free Press.

Document: Arkansas suit

Court filings in New Beginnings bankruptcy case.

Document: Financial affairs

Court filings in New Beginnings bankruptcy case.

Document: Reply

Court filings in New Beginnings bankruptcy case.

Another allegation of patient maltreatment has surfaced against Hixson-based nursing home operator New Beginnings Care LLC — this time in Chattanooga's U.S. Bankruptcy Court.

The family of a 47-year-old Arkansas man alleges his Dec. 22, 2014, death was due to poor care that resulted in bedsores — including a nonhealing ulcer that ate into his lower back —and multiple hospitalizations from a clogged feeding tube and breathing tube as well as poor hygiene, infections, malnutrition and dehydration.

"Chronic understaffing" to "maximize profits" at Stoneybrook Healthcare & Rehab LLC in Benton, Ark., contributed to the death of Vernell Hawkins Jr., said a lawsuit filed on behalf of the deceased man's wife, Carol Hawkins, by Robert Francis, an attorney at Reddick Moss, a Little Rock, Ark., law firm.

The Benton, Ark., nursing home filed for chapter 7 bankruptcy, or liquidation, in March 2015. New Beginnings, which operated the facility along with 15 other nursing homes, filed a Chapter 11 bankruptcy reorganization on Jan. 22 after losing contracts for several of its nursing homes and having to absorb cuts in Medicaid payments at others.

The bankruptcy filings put a stay, or hold, on Hawkins' family ability to sue, Francis said.

"With there being a bankruptcy in place, our case is [on hold]," he said.

So Francis will come to Chattanooga for an April 21 hearing to seek to ask U.S. Bankruptcy Court Judge Nicholas Whittenberg to remove the stay, so Hawkins' family can seek up to $3 million from New Beginnings' insurance company.

New Beginnings denied all the allegations in Carol Hawkins' lawsuit in a Feb. 29 filing in Saline County, Ark., Circuit Court.

But this isn't the first time New Beginnings Care — which has had nursing homes shut down in Tennessee, Georgia and Ohio after state inspectors found deficiencies there — has been accused of poor care resulting from improper staffing.

In January, Ohio inspectors found that a New Beginnings nursing home in Youngstown, Ohio, had insufficient numbers of nurses and nurses aides on all shifts — which the nursing home's administrator and director of nursing both blamed on nonpayment of staff. Only one staffing agency would send nurses, and would only do so if payment was made up front, the director of nursing told state inspectors.

The administrator and the director of nursing — who had worked more than 24 hours straight to cover for staff shortages — both resigned in late January while state inspectors were there.

Owners, family take home $1 million in 2015

Meanwhile, New Beginnings' owners paid themselves and several family members about $1 million in 2015, according to a document filed on March 21 in Chattanooga bankruptcy court.

The two managing members for New Beginnings, Trent Tolbert and Debbie Jones, each own 50 percent of the business and paid themselves a total of $678,281 in 2015, including $60,280 in expenses claimed by Jones, according to a statement of financial affairs.

Jones' husband, Byron Jones, who was responsible for facility operations, had a salary in 2015 of $123,367. Jennifer Isaacson, who's listed as a daughter of one the two managing members, was paid $125,296 as director of rehabilitation. Tolbert's son, Thomas Tolbert, was paid $34,135 for two-and-a-half months' work "resolving environmental issues at Georgia facilities," the statement says. Tolbert's wife, Aubrey Carnathan Tolbert, a registered dietitian, was paid $35,592 for two-and-a-half months' work. Jones' daughter, Lacey Jones, made $34,135 for two-and-a-half months' work of administrative support in New Beginnings' office on Hixson Pike.

Chief Operating Officer Donna Magnuson had a salary of $158,645 in 2015, the statement says, and Chief Financial Officer David Rawiszer made $142,108.

Trent Tolbert and Donna Jones each drove company-funded Porsches. New Beginnings Care made three payments toward one of the Porsches totalling $12,114 before the business declared bankruptcy, the financial statement says, and sold the other Porsche for $101,301 to Reeder Chevrolet in Knoxville.

Sale in the works?

Tolbert declined to comment after a bankruptcy court hearing Tuesday morning, except to say that the Times Free Press' coverage of his business' bankruptcy has been "terribly unfair and horribly inaccurate." He declined to elaborate.

At a bankruptcy hearing in February, Tolbert said that New Beginnings was owed millions by Medicare and Medicaid.

"We're owed more than we owe," he said then.

New Beginnings, which leases but doesn't own nursing homes, identified in a Feb. 23 court filing seven "keeper" facilities that it hopes to keep, two "non-keeper" nursing homes that were due to close, and six "closed" facilities.

"We, at this point, I think have stabilized operations at the facilities that remain," Robert Hirsh, the New York City-based attorney who represents the unsecured creditors said Tuesday morning in bankruptcy court. Hirsh also said that New Beginnings might be sold.

Contact staff writer Tim Omarzu at tomarzu@timesfreepress.com or www.facebook.com/MeetsFor Business or twitter.com/meetfor business or 423-757-6651.


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