PORTLAND, Maine — The Bangor-based social service provider Getchell Agency Inc. has filed for Chapter 11 bankruptcy protection amid a legal battle with former employees and a fight with the state regarding overnight pay for in-home caregivers.
Rena Getchell, the agency’s CEO, wrote in a letter addressed to Gov. Paul LePage that she felt state officials left her no choice but to seek to reorganize her agency’s debt, which includes at least $140,000 in legal bills and $873,000 in back taxes, through bankruptcy.
“I made the decision to file for bankruptcy after long hours of deliberation and legal consultation, and I do so with a heavy heart,” Getchell wrote. “But I cannot continue to move forward shackled by mounting legal fees and under constant threat of multimillion-dollar judgments over which only the state has control.”
Two former employees sued the company for overnight pay in 2013, and another 96 since have joined the class-action lawsuit. The employees say the agency failed to pay house managers for the time they slept at the firm’s approximately 50 group homes, which house about 65 people with physical, emotional and cognitive disabilities. The company currently has 173 employees, Getchell said.
Getchell said in her letter that while the state “Department of Health and Human Services categorizes our clients as needing direct care and supervision for 24 hours a day, the state provides funding for only 16 of those hours” through MaineCare. Getchell said in the letter she met with LePage and other state officials and was told they would address the problem.
She went on to say that the state’s “refusal to seek any resolution to the issue of overnight pay for residential direct care workers” puts her agency and all similar agencies “at risk of future lawsuits for overnight pay being withheld by the state.”
Any estimated claims from the lawsuit against Getchell’s agency were not included in the initial bankruptcy filing Friday.
The lawsuit followed an investigation by the U.S. Department of Labor, which it ended after reviewing the case. The department previously sued the Getchell Agency in 2009 over similar claims, which were settled out of court.
A representative for the governor was not immediately available for comment Friday.
In the bankruptcy filing, the company claimed between $1 million and $10 million in liabilities and, at most, $50,000 in assets.
Getchell said Friday that the agency has no plans to close and said she wanted to reassure employees and clients that the only reason for filing bankruptcy was the lawsuit.
David Van Dyke, an attorney representing Getchell Agency, said Friday evening the bankruptcy filing puts a “stay” on the lawsuit until a bankruptcy judge decides if it may go forward.
Attorneys for current and former employees of the agency are seeking a $6.4 million attachment to real estate and personal property owned by the business and Getchell as part of the lawsuit pending in U.S. District Court.
A hearing on the motion for the attachment, which is similar to a lien, is set for Wednesday, March 30, in federal court in Bangor but is not expected to be decided that day.
Lawyers for the employees claim the $6.4 million would cover wages owed to a potential 500 current and former employees, including the 98 who already have opted in as plaintiffs.
“Plaintiffs seek to attach the real property of the Getchell Agency and Rena Getchell and to impose trustee process on the MaineCare payments which defendants received, as well as bank accounts belonging to defendants,” the motion for attachment said.
That process would freeze the firm’s bank account.
Attorneys for the agency and Getchell have said in court documents that the “attachment and trustee process is not warranted, and it would be detrimental to the continued operation of the Getchell Agency’s business in providing integral daily services to about 65 consumers.”
The agency has claimed in court documents that it is following state and federal wage and hour standards. In support of the position that employees are not entitled to sleep time pay is the fact that MaineCare did not reimburse Getchell for all overnight hours, attorneys for the company claim.
Getchell’s lawyers opposed the motion for attachment.
The company asked that funds needed to make payroll be excluded from any attachment order if one is granted.
To prevail on the motion for attachment, attorneys for the house managers must prove that it is more likely than not that they would prevail at a trial.
Once the attachment motion is decided, both sides intend to file motions for summary judgment in the case, according to information posted on the court’s electronic case filing system.