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Hartline Hospice closes its doors

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by Karen E. Culp

SBJ Staff

Hartline Hospice has closed its doors. As of March 20, the locally owned hospice organization is no more, which has resulted in a motion to dismiss the Chapter 11 bankruptcy case it filed Dec. 12, 1997.

"As of Friday evening, they've transferred all of their patients to other offices, and Hartline is officially closed," said Mark Fitzsimmons, attorney for the hospice.

Hartline Hospice was owned by Richard and Dottie Hart. Dottie Hart is a registered nurse, and she and her husband started the company as part of their lifetime dream, Fitzsimmons said.

Hartline Hospice had been subject to a focused medical review by Medicare since April, which ultimately forced the company into bankruptcy, Fitzsimmons said. During the review, payments from Medicare were suspended, resulting in a suspension of about half of the company's cash flow. Medicare accounts for 92 percent of the company's income.

The company owes a total of $194,580 to Metropolitan National Bank for a Small Business Administration loan secured by a "blanket lien on all the business' tangible and intangible assets," Fitzsimmons said. The company owes $336,946 for state and federal taxes. The corporation also owes $632,504 in unsecured nonpriority debts.

The company's total assets are valued at $183,573, and its total liabilities are more than $1.16 million, according to the bankruptcy filing.

Fitzsimmons said the bank would take the assets of the company, which include its furniture and equipment, and that will be used to satisfy what the bank is owed.

"The Harts are very willing to cooperate at this point, and the bank will be able to recover a good chunk of what it is owed," Fitzsimmons said.

As for the federal and state tax claim, Fitzsimmons said he does not anticipate that there will be any assets left to satisfy that claim.

Fitzsimmons said this is a case that has tugged at his heartstrings.

"These are good people. They watched their lifetime dream come tumbling down, and it was through a lot of stuff that was unnecessary," Fitzsimmons said.

Fitzsimmons has filed a motion to dismiss the Chapter 11 case; he said that the case could be dismissed without a hearing, or an effort may be made to convert the case to a Chapter 7.

In order to get the business out of the situation it was in after the focused medical review, Hartline Hospice had to focus on increasing its patient census. That was difficult, Fitzsimmons said, because the hospice relied on referrals from organizations that were creditors.

"It's hard to get people to refer cases to you when you owe them money," Fitzsimmons said.

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