Haworth ordered to pay $2 million for worker benefits

Published 12:00 am Wednesday, December 27, 2000

[12/27/00] An independent trustee has been appointed by a federal court for a financially troubled, Vicksburg-based home health company.

A lawyer representing a group of employees hopes the development will help settle a lawsuit filed by some who have worked for Haworth Home Health, but have not received pay and benefits their suit says were promised.

The court ordered the agency and its president to pay more than $2.1 million into the employee benefit plans.

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Founder and president Ida J. Haworth said today the company is still operating its offices in Louisiana, Mississippi and Arkansas and serving clients and that she hopes the company’s problems will be resolved soon.

The consortium of companies operates by sending nurses and other health-care providers to homebound clients based on referrals. Payment comes from government programs, client funds or private insurance.

Money troubles facing Haworth Home Health have been recurrent, but came to light again in June when 60 of the company’s 350 employees who were angry over bouncing paychecks and other troubles walked off the job. The employees said they had not been paid on time and when they did receive checks, the checks were refused because of insufficient funds in the company accounts. Haworth blamed the problems on Medicare cutbacks.

In July, Haworth’s companies filed for bankruptcy in Louisiana under Chapter 11, which allows for reorganization.

In August, six of the employees filed a federal lawsuit against Haworth, Home Care Services and several other companies that administered the employee benefit plans. The suit charged that funds were withheld from their salaries but were not paid into the cafeteria insurance, medical insurance, retirement and pension plans and charities for which funds were withheld from paychecks. The employees originally filed six separate suits, but they have since been consolidated.

In the latest action, the U.S. District Court granted a petition from the Department of Labor against Home Care Services Inc. and Haworth asking for a civil contempt citation because the terms of orders the court entered in March 1997 and modified in April 1997 had not been complied with. They also asked that a trustee be appointed and Haworth be removed from and barred from having anything to do with the financial matters of the employee benefit plans of her companies.

The orders granted in 1997 required Haworth and her home health agency to pay more than $2.1 million into the employee benefit plans.

The petition granted Dec. 20, claimed the defendants failed to comply with the original and modified settlements by failing to make restitution according to the schedules set out in the original orders.

In response to the petition, the court appointed Larry Lefoldt of Lefoldt & Associates in Jackson as an independent, substitute trustee to take control and manage the two pension plans of Home Care Services and its subsidiaries: Haworth Home Health Agencies of Vicksburg, Winnfield and Minden in Louisiana.

Haworth said Wednesday what the Department of Labor announced Tuesday is something she and the company agreed to more than three years ago. “It’s old news,” she said.

The company provided management services for Hospice Care Foundation Inc. The foundation was also to build and operate a hospice facility off Indiana Avenue to provide services to terminally ill patients.

Haworth said the Hospice Care Foundation is operating five offices in Mississippi, providing service to patients, and she hopes to complete the financing soon for construction of the Indiana Avenue facility. “I had been in contact with a group that finds financing for you,” she said, adding around Thanksgiving she was told that loans had been located for the project and that a national foundation is interested in participating.

Sharon Morrissey, a spokesman for the Department of Labor Pension and Welfare Benefits Administration, said Lefoldt’s job will be to figure out how to pay the more than $2.1 million required by the court orders.

“His job is to work with the people responsible to see that the plans are made whole,” she said.

Morrissey also said Lefoldt is considered one of the top independent trustees in this part of the country.

Morris Richards, one of the former employees who filed suit against Haworth and her companies declined to comment on the latest development.

“Since we are involved in a lawsuit, I had better not voice any opinion,” Richards said. However, he said he hopes the latest development will move resolution of the situation along. He then referred all questions to the employees’ attorney.

“Hopefully this will be favorable to our civil suit,” said Blake Teller, the Vicksburg attorney representing the six former employees who filed suit.

Teller said he had not seen the court documents, but said the action taken may be favorable to resolving the suits. He also said he had been in discussions about a resolution.

Another employee, Lisa Childress, also declined comment and referred all questions to Teller.