Florida Brain-Injury Facility Files for Bankruptcy

A U.S. brain-injury treatment center has filed for bankruptcy following reports of abuse and neglect of patients by their caregivers.

The Florida Institute for Neurologic Rehabilitation Inc. and three affiliated corporations filed Chapter 11 petitions in U.S. Bankruptcy Court in in Tampa yesterday. They said in court filings that they estimated they owe between $3 million and $30 million to 103 to 346 creditors and that their assets total $150,000 or less.

The bankruptcy action came on the same day that a unit of Regions Financial Corp. (RF) sued the institute, known as FINR, claiming it defaulted on $31 million in real-estate loans. Birmingham, Alabama-based Regions Bank said in its lawsuit that patients welfare is at risk because of financial problems and mismanagement at the rehabilitation center in Wauchula, about 50 miles southeast of Tampa.

Florida officials in August ordered FINR to move about 50 patients to other facilities. The center has been fighting the directive, issued after a Bloomberg News story revealed a history of violence there. Caregivers beat patients and goaded them to fight each other and fondle female employees, according to reports by state officials released to Bloomberg.

The list of creditors in the bankruptcy filings includes insurance companies, law firms, medical supply companies, water and electric utilities, the county tax collector and a public relations firm. FINR officials couldnt be reached for comment.

In its suit, Regions Bank asked that a court-appointed receiver take control of the center pending the foreclosure or other disposition of the collateral for the loans.

FINR stopped making payments to the bank in August, has failed to give the government the payroll taxes withheld from employees and hasnt paid real estate taxes and routine operating expenses, according to the lawsuit.

The case is Florida Institute for Neurologic Rehabilitation, 8:13-bk-00102, U.S. Bankruptcy Court, Middle District of Florida (Tampa).

To contact the reporter responsible for this story: David Armstrong in Boston at darmstrong16@bloomberg.net

To contact the editor responsible for this story: Gary Putka at gputka@bloomberg.net

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Florida Brain-Injury Facility Files for Bankruptcy