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Bankruptcy stalls suits against group homes


– Lawsuits against a former local group home company will not move forward, at least for now, since the now-convicted felon at the head of the company has filed for bankruptcy.

According to U.S. District Court records, Ernest Beal filed for bankruptcy protection earlier this month. The bankruptcy delayed lawsuits filed against the group homes by their former employees and an insurance company.

Beal was the chief executive operator of the group homes, which operated under the name Your Friends and Neighbors, and were owned by Pejus Inc. and Rosewater Inc. The companies had group homes for adults with developmental disabilities in Indiana and Georgia.

The group homes were shut down in late 2010 after Indiana removed the company from its Medicaid provider list.

In May 2010, Beal, a lawyer and licensed minister, was sentenced to two years in prison for theft after he was convicted by an Allen Superior Court jury.

He was charged in 2009, accused of ordering company officials to take money from the clients’ trust funds to make payroll and other operating expenses.

The trust fund holds money from clients’ Social Security benefit checks, paychecks and other income and is meant to pay for the expenses and care of the residents, according to court documents.

Since the closure of the group homes, former employees sued Beal and the companies for back wages and benefits.

In April 2011, Allen County Circuit Judge Thomas Felts granted a default judgment against Your Friends and Neighbors of $1.26 million – plus interest, at a rate of $210.45 a day, according to court documents.

But two federal lawsuits remain – one filed by the employees accusing the company of not submitting payments to medical providers through their self-funded health insurance plan. The other is by the company’s insurance provider, seeking not to pay the claims arising from Beal’s wrongdoing.

Beal has since been released from prison, and according to the federal bankruptcy filing has between 100 to 200 creditors – including a number of the former employees suing him.

In his personal property listing on the bankruptcy filing, Beal said he has $100,000 in accounts receivable because of personal loans he made the now-insolvent Your Friends and Neighbors. He also claims $350,000 against Grabill Bank, which seized certificates of deposit he had in order to pay off business debts, according to court documents.