published Saturday, February 5th, 2011

Laid-off workers want answers after pay yanked from bank accounts


by Emily Bregel

Seven months' pregnant, Stacey Knox lost her job and her health insurance at Fuller Rehabilitation when the Ringgold, Ga.-based company folded last week.

The Lexington, Ky., resident is also $200 overdrawn on her bank account after Fuller employees' final paychecks were pulled from their bank accounts Thursday without explanation.

"I'm upset and frustrated and have no answers from anybody," Knox said in a phone interview Friday.

She and other laid-off employees say there has been a lot of finger-pointing and few clear answers about who took the money and who will repay it: the payroll company, the owners of the bankrupt company or Northwest Georgia Bank, the company's lender.

Fuller Rehab's bankruptcy attorney, Tom Ray, said the employees' best bet to get their money is to file a claim with the bankruptcy court. Fuller's former employees are listed as creditors in its Chapter 7 bankruptcy case, filed on Friday, he said.

About 80 workers at the durable medical equipment company — which made power wheelchairs and other mobility equipment — lost their jobs last Friday when Fuller Rehab sold its assets to Salt Lake City-based Orbit Medical and went out of business.

According to the bankruptcy filing, Fuller Rehab owes $3.2 million to Northwest Georgia Bank and $7 million to Pride Mobility Products Corp., which is based in Pennsylvania. The company listed assets of $6.9 million and total debt of $12.5 million.

Confusing paychecks

Ray said the bank had a lien on Fuller's checking account because of the company's outstanding debt and it seized the money in the account.

When owner Mike Fuller wrote a check to his payroll company for employee paychecks, it bounced, even after it appeared checks had been deposited in employees' accounts, Ray said.

"The bank didn't bounce the employee checks; they bounced the payroll company's check," he said. "Nobody's done anything improper here, and it's unfortunate that the employees have had that situation."

Officials with Northwest Georgia Bank would not comment on specific customers' financial situations for privacy reasons. But President and Chief Operating Officer Scott Smith said he "understands how confusing the issues may be."

"We empathize with what people are going through, but what we have done is standard operating procedure for any financial institution," Smith said.

The bank has waived overdraft fees for affected employees who are its customers, Smith said.

Fuller struggling

Even last year, Fuller Rehab was on the ropes.

Mike Fuller said the company struggled to cope with cuts in Medicare payments, laying off about 20 people and closing some locations last year.

He said a federal regulation that took effect Jan. 1 was the last straw. The Medicare rule requires that the company rent, rather than sell, its equipment, which included power wheelchairs and scooters.

Fuller Rehab could not stay afloat and pay down its debt while awaiting payments for rented equipment, Fuller said.

"All of this equipment costs thousands and thousands of dollars," he said. "I could not finance the equipment because what I had to do was buy the equipment, pay all my workers, then pay $2.5 million in interest to the bank. ... It breaks my heart, but I don't know how to fix it."

Laid-off Fuller worker Tonya Keith, of Rock Spring, Ga., said she's concerned for patients who might need maintenance work on their mobility devices.

"A lot of them depend on us. We had several calls every day from people who would get broke down," she said. "There are thousands of patients that are just gonna be stranded."

ABOUT THE COMPANY

Ringgold, Ga.-based Fuller Rehabilitation Independent Living Aids, with seven locations in five states, employed about 80 people and provided power wheelchairs and other mobility equipment.

about Emily Bregel...

Health care reporter Emily Bregel has worked at the Chattanooga Times Free Press since July 2006. She previously covered banking and wrote for the Life section. Emily, a native of Baltimore, Md., earned a bachelor’s degree in American Studies from Columbia University. She received a first-place award for feature writing from the East Tennessee Society of Professional Journalists’ Golden Press Card Contest for a 2009 article about a boy with a congenital heart defect. She ...

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inquiringmind said...

Probably would not happen if the new Health Care law was fully in effect

February 5, 2011 at 1:25 p.m.
dave said...

Yeah, If the new law were in full effect they would have lost their jobs even sooner!

February 5, 2011 at 1:34 p.m.
gagirl1 said...

This is what happens when you try to live well above your means.

February 5, 2011 at 5:45 p.m.
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