1. Eastman, Ga., Health and Rehab2. Edwards Redeemer, Oklahoma City, Okla.3. Mt. Pleasant Health Care and Rehab, Mt. Pleasant, Tenn.4. Oceanside, Tybee Island, Ga.5. Pinewood Nursing Center, Whigham, Ga.6. Savannah Beach Nursing and Rehab, Tybee Island, Ga.7. Midway, Ga., Woodlands Health Care‘Non-keeper’ facilities:1. Abbeville, Ga., Health and Rehab. Due to close March 312. Jeffersonville, Ga. - Jeffersonville Health & Rehab Due to close early MarchClosed, new operator and/or lost Medicaid and Medicare payments3. Warren, Ohio - Cedarcreek Health Care. Closed Feb. 20, 20164. Youngstown, Ohio - Campus Health Care Closed Jan. 29, 20165. Limestone, Tenn. - John Reed Healthcare and Rehab; lost 40 of 43 residents6. Macon, Ga. - Goodwill Health and Rehab Closed Jan. 20, 20167. Rockmart, Ga. — Rockmart Nursing and Rehab Closed Jan. 20, 20168. Lonoke, Ark. - Red Oak Nursing and Rehabilitation Closed Dec. 28, 2015Source: New Beginnings’ bankruptcy court filings
But it was New Beginnings' reputation that impressed the board at John M. Reed Nursing Home in Limestone, Tenn., near Johnson City, a 52-year-old nonprofit founded by the Church of the Brethren.
"They were highly recommended," said Jim Wheeler, the attorney for John M. Reed Nursing Home, which hired New Beginnings in April 2013 as its operator. "They stressed quality of care in the vetting process that we did. At that point, they appeared to be financially very sound. Initially they were doing a good job."
Soon, though, local vendors complained they weren't getting paid, Wheeler said. The water and the power bills went past due, he said, and state bed taxes weren't remitted.
Then in December 2015, state inspectors found numerous "deficiencies" in patient care. Among other findings, inspectors said staff didn't provide timely patient incontinence care, didn't prevent avoidable pressure ulcers and failed to administer antibiotics.
Medicaid and Medicare payments were cut off, which meant John M. Reed lost 40 of its 43 patients. Only three private-pay patients remained. The nursing home hopes to regain certification for Medicaid in four months, Wheeler said, but its reputation is damaged.
"It'll take years to recover from this," he said.
John M. Reed was the first of eight nursing homes operated by New Beginnings that have closed or will close by the end of March.
A home in Youngstown, Ohio, closed Jan. 29 after state inspectors found it was understaffed because workers quit over not being paid. At least seven of the 44 residents wore two layers of adult diapers "saturated" with urine or feces, the inspection found, and residents weren't being repositioned in bed to prevent skin breakdown, including one who had ulcers on both heels.
New Beginnings' legal team will spend Friday in U.S. Bankruptcy Court in Chattanooga to try to hang on to the seven nursing homes the business still operates. It calls them "keepers" in court filings, in contrast to two "non-keeper" facilities still due to close and six "closed" facilities.
Hurdles that New Beginnings has to clear Friday include dealing with past-due utility bills totaling $253,474 at 13 facilities, including its Hixson headquarters, as of Jan. 22, court filings show.
Also to be considered is the $2.8 million New Beginnings owes Marietta, Ga.-based Gemino Healthcare Finance for a revolving line of credit.
And New Beginnings hopes to hang on to two Tybee Island, Ga., nursing homes owned by a real estate investment trust, ADK Georgia LLC.
They were part of a "master lease" with a third, 131-bed nursing home in Jeffersonville, Ga., 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 didn't want to let New Beginnings walk away from the Jeffersonville nursing home - where it owes four months of back rent at $109,000 per month - and keep the two on Tybee Island, said ADK's Atlanta-based bankruptcy court attorney, Ted Stapleton.
"They've got to assume the whole thing; they can't just cherry pick it," Stapleton said Tuesday. However, ADK and New Beginnings are in negotiations.
Tolbert didn't return calls seeking comment, and his Chattanooga attorney, David Fulton, declined to talk Thursday outside bankruptcy court after a hearing.
Tolbert and New Beginnings' co-founder, Debbie Jones - who made $24,000 a month and also drove a company-leased Porsche - filed for Chapter 11 bankruptcy Jan. 22. The duo previously held executive positions at two Chattanooga-area nursing home businesses: Grace Healthcare and Life Care Centers of America.
In the court filings, 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 held back $104,000 per month in Medicaid, the filing said, to recoup back bed taxes at two homes New Beginnings operated there.
New Beginnings owes close to $7 million to unsecured creditors, or those without collateral, according to court filings, with the highest amount being $1 million owed to the Bureau of TennCare.
New Beginnings operates, but doesn't own, nursing homes in low-income rural areas.
It had $63 million in revenue in 2015, court filings say. But it listed its assets as less than $50,000.
When New Beginnings sought bankruptcy, it said in a legal filing that 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."