Five Connecticut Nursing Homes File for Bankruptcy Protection
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Five Connecticut Nursing Homes File for Bankruptcy Protection

March 8, 2013


Five nursing homes in Connecticut that operate under the supervision of HealthBridge Management are filing for bankruptcy help, according to a recent report from the Hartford Courant.

Sources say HealthBridge’s primary motivation in heading to bankruptcy court is to be able to reduce its labor costs without having to tangle with its employees’ union.

The employees of the nursing homes in bankruptcy are mostly represented by the Service Employees International Union (SEIU), which would effectively have its influence neutered in bankruptcy court.

Before contacting a bankruptcy attorney, HealthBridge tried to convince the union to either reduce its pension plans or to contribute more to employees’ health insurance plans.

Despite the union’s refusal to accept the deal, HealthBridge officials reportedly modified its workers’ benefits packages anyways, which led to a strike featuring roughly 600 employees, according to sources.

To add further intrigue to the pending bankruptcy case, the National Labor Relations Board has reportedly filed a claim against HealthBridge alleging that the company broke federal laws when it modified the benefits packages without the union’s consent.

This claim was successful, and a federal judge has ordered the company to allow the striking workers to return to their jobs with their previous benefits intact. The workers returned to their jobs earlier this week, sources say.

But the company claims that the five nursing homes in bankruptcy protection will have to close their doors, resulting in the loss of 1,140 jobs, if it is unable to reduce its pension and health insurance costs.

Without the modifications, company officials claim they will lose $1.3 million per month. According to company spokeswoman Lisa Crutchfield, HealthBridge “will not survive unless we have relief from the crushing burden of unsustainable labor costs, especially the spiraling costs of pension and healthcare obligations.”

In response, David Pickus, a union leader, said the company is simply “trying to use bankruptcy to avoid its legal obligations to employees.” So the bankruptcy court will have a difficult task ahead as it tries to appease both the union and the company.

Sources note, however, that bankruptcy judges are usually reluctant to modify union contracts unless the company shows such action is absolutely necessary to keep the business open.

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