Disclaimer:- The material is selective and not all inclusive.
The extracts do not necessarily reflect the perspective of the
original. Corporate denials and explanations have not been included.
No claim is made that all of the matters referred to are true. The
intention is to give the flavour of the material and an idea of the
extent of the allegations. Can there be so much smoke without a large
fire? This is a matter of public welfare and the interests of the
pubic must be placed before those of the corporations.
I have argued that most of the charismatic entrepreneurs who founded the corporate health and aged care chains show personality features which I have called extreme closed minded or even successful sociopaths. I have described these on a separate web page and have suggested that because of the nature of health and aged care, the market system in health and aged care selects for people like this. These are the least suitable people one could possibly find to look after citizens who are trusting, vulnerable and dependent on the Samaritanism of their fellows. Examine the material about IHS and Elkins on the IHS pages and try to imagine the sort of person Elkins is. Here is my view but decide for yourself.
Dr. Robert Elkins is a psychiatrist who kept a low public profile but cultivated politicians. There is little information about his early life except that he qualified in medicine and then did his residency at Harvard. He practiced briefly, as a psychiatrist then was a cofounder and vice president of another long-term company. I do not know the fate of this company. It is clear that he was involved in a number of other companies and used them in arrangements profitable to himself. IHS for instance leased a private jet from a company owned by Elkins for his private use.
Elkins was a prime believer in the market, in corporate growth, in diversification and as the company name suggests in corporate integration. He saw the financial opportunities in subacute, post acute and step down care. He believed that this was the way of the future. He was clearly totally committed to these beliefs. He had no doubts. In the face of mounting evidence that this was not working he drove the company into a wild spending spree and massive debt - persuading the market, and presumably the moneylenders that this was good business. He put all of his eggs into the Medicare basket at a time when it was clear that chains including IHS were misusing the Medicare system and that government would be forced to curtail Medicare spending.
IHS and Elkins are prime example of the way the corporate health care marketplace and its leaders create an abstract world of words which is not based on the way the rest of us see and experience the world. Anything not congruent with these beliefs was ignored. The manner of IHS collapse illustrates the inapplicability of these beliefs in the real world. The way in which Elkins, Turner, Lunsford and their supporters continue to blame government rather than themselves for their downfall is a reflection of their inability to confront their beliefs. While they acknowledge mistakes, none accept that the basic premises on which their policies were based were fundamentally and fatally flawed.
That Elkins was charismatic and very persuasive is illustrated by the way the business community and the political establishment accepted his views and blindly supported his strategies. Admittedly this was fertile soil for his ideas. The costs of health care were soaring and the ideas promoted by Elkins were congruent with the marketplace philosophy of the times. Those under pressure for quick fix solutions grabbed them enthusiastically.
Elkins persuaded politicians and the market that by simply moving patients from an acute care facility to a nursing home you could provide the same care at a fraction of the cost. That these patients would require the same equipment, the same nursing skill and the same number of nurses but under a different roof was ignored. There was no reason to believe that it would cost less. They argued simplistically that because the care provided in nursing homes (to a very different set of patients) was much cheaper this more sophisticated care could be given at a similar cost. There is no reason to doubt that Elkins believed this himself. One of the characteristics of most of these health care entrepreneurs is their ability to look past fact and reason when it conflicts with their convictions.
The financial opportunities for corporate chains seemed enormous. Care was no longer covered by the financially restrictive DRG system. The main difference was that patients would be removed from the protection offered by the more sophisticated quality assurance processes in acute hospitals to the much less rigorous nursing homes. The continuity of care provided by their specialist physicians would be broken. They could be more readily exploited and deficiencies in care would be less readily detected.
Not surprisingly there were few cost savings, that did not compromise care. Medicare was ruthlessly ripped apart and the costs of care spiraled without benefit to the patients. They were overserviced when it was profitable and neglected when it was not. The ideas on which these policies were based were rooted in a theory that was not based on the real world.
Elkins, Turner and other charismatic entrepreneurs were so persuasive that this nonsense was accepted as unchallengeable truth both by the market and by the political establishment. Australia embraced this nonsense and in 1997 Australia's Dr. Wooldridge spoke of his plan to revolutionise our health system in this way. He had only recently brought Sun Healthcare, that other proponent of this model of care into Australia. Andrew Turner was equally persuasive.
Elkins was enormously successful and his energies were responsible for the meteoric growth of IHS. This growth is described in references on a separate page.
It is clear that Elkins had total faith in his own judgment and had no doubts. Success was proof in itself. The information we have suggests that he was able to look past and condone practices which exploited the vulnerability of senior citizens to boost profits even when their care was compromised. Practices which were plainly fraudulent were encouraged in the company.
He fostered a culture which saw profit, growth and integration as primary. It is likely that like Sun's Andrew Turner he believed implicitly that all this was in the interests of patients and of the health system - that his chain was as they claimed providing superior care. Evidence to the contrary was biased or a misrepresentation.
Elkins clearly had grandiose ideas. Like Sun and Vencor, IHS set out to build palatial headquarters in Maryland and negotiated a favourable deal with government to do so. Elkins' program of growth, diversification and integration led the company into a spiral of acquisitions and massive debt at a time when it was quite clear that the income to support this could not be maintained. It is clear that he did not examine the situation objectively. It seems that the interests of his shareholder was not a major consideration as he gambled all on his belief in his model of care and his own infallibility.
He had an inflated opinion of his own worth. While he was cutting nursing home costs by underpaying nurses he rewarded himself with a massive salary, enormous bonuses, large stock options and multimillion dollar pension schemes. The company hired a personal jet for him. He clearly led a lavish life style.
Even when his policies were in tatters and his company bankrupt he felt that he was entitled to massive compensation and termination benefits -- US $50 million.
I have no information describing what happened in IHS boardrooms. It is likely that Elkins, like Turner, Lunsford and Scrushy surrounded himself with Yes men who worshipped him and believed in his abilities. They would have been persuaded by his thinking and his success. They supported him in the wild buying spree and in accumulating massive loans when it should have been clear to them that this was most unwise.
Both the board and presumably shareholders were compliant in the lucrative payments and strategies which made Elkins so wealthy. In July 1998 when the first signs of an economic downturn was appearing they agreed to pay IHS former president, Lawrence P. Cirka, $ 11.3 million in severance plus $ 2.7 million in retirement benefits.
When Elkins' policies collapsed and the company was on the slippery slope they added inducements to make him stay. They lent him US $11.5 million which he would not have to pay back if he stayed.
When the creditors' committee called for Elkins to be replaced the company resisted. This is the man whose "vision" had, from all accounts lost shareholders including the directors their entire investment, been responsible for misusing patients for profit and permitted fraudulent practices. The blind belief in growth, in size, in diversification, in integration and in post acute care lay in tatters. Everything he believed in had failed but still his supporters believed in him. There could be no doubt - such a man was he!
When creditors finally forced him to step down the company went to the bankruptcy court with a proposal to provide him with a massive termination payout - US $50 million. As one critic put it "The board of directors of this firm has not been known for its wisdom, but you would not normally expect a board to do something like that." But then the critics were not meeting with this man on a day to day basis. They were not members of the Elkins cult.
One creditor wisely summed up the problem with Elkins and his board when he commented "A turnaround guy brings total objectivity"
Integrated Health, U.S. spar on Elkins
accord; Bankruptcy Court is told $50 million is, isn't reasonable
The Baltimore Sun December 9, 2000 Saturday
Elkins founded IHS in 1986 and built it into a Fortune 500 company.
Health chain turns pale; IHS has suffered
82% stock plunge, cut 1,000 jobs; Medical services
THE BALTIMORE SUN February 21, 1999
M. William Salganik
Through the purchase of nursing homes and related businesses, IHS' revenue increased from less than $150 million in 1991 to more than $3 billion in 1998
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At times, the company used the slogan: "Hospital care without hospital costs."
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That concept caught the attention of Medicare, the federal government's insurance program for the elderly, which was seeking ways to lower its spiraling payments for post-hospital care.
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Medicare spending for skilled nursing facilities zoomed from $2.8 billion in 1989, or 4.7 percent of all Medicare spending, to $10.6 billion in 1996, 9 percent of all Medicare spending.As IHS grew and developed a business dependent on federal reimbursement, Elkins became one of the country's largest political contributors.
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Elkins, in the 1993 IHS annual report, said the company was looking to provide "a full continuum of care" in each market. That would include, he wrote, "subacute care, outpatient care, home care, rehabilitation care and pharmacy services.
Golden years fade for nursing home chains;
An industry booming only a few years ago struggles to survive
THE BALTIMORE SUN March 5, 2000, Sunday
The current crunch in the industry has its roots in the mid-1980s, when companies like Genesis and Integrated Health were getting started. They took nursing homes in a new direction -- a direction that made the term "long-term care" somewhat misleading.Dr. Robert Elkins, who founded IHS in 1986, anticipated a demand for "subacute" services -- care that is less intense (and less expensive) than what hospitals provide.
Integrated Health Services and other nursing-home chains began shifting their business away from traditional, long-term care for frail elderly clients, and began providing shorter-term care for patients leaving the hospital -- at higher rates than those usually charged by nursing homes
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Integrated Health Services was one of the most aggressively acquisitive. The Sparks company's revenue increased from less than $150 million in 1991 to more than $3 billion in 1998, making it one of Maryland's largest publicly-owned companies.
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"Egos get involved. You grow by acquisition, and you've got to get the deal done. There were some bad business decisions."
COMMENT:- Elkins success in persuading people to believe in him and in securing political patronage in Florida and Maryland may have led to an inflated belief in his abilities to bend politicians to his point of view. The following suggests that he may not have had his feet on the ground.
REQUEST DENIED? INTEGRATED HEALTH UNLIKELY
TO WIN HOME HEALTH WAIVER
Modern Healthcare Aug. 10, 1998 Page 6 News
Eric Weissenstein
Integrated's chairman is Robert Elkins, M.D, a politically connected businessman who has lavished money on both Republicans and Democrats. He gave nearly $600,000 to the Democratic Party during the 1996 presidential election.
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Elkins argues that Integrated deserves the break because it rescued the scandal-plagued First American Health Care, then the nation's largest privately held home health company, in October 1996. The company, previously known as ABC Home Health Services, and its founders had been convicted of Medicare fraud.The corporation had fallen into Chapter 11 bankruptcy proceedings when Integrated agreed to buy it from the federal government in a transaction valued at $313 million. The purchase contract contained provisions protecting Integrated from losses, Elkins told Wall Street analysts during a conference call late last month. He said Integrated should be shielded - - - -
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Wall Street is also discounting the possibility. "They (Integrated) view themselves as white knights, bailing out the government and helping to provide access," said one of the analysts who was part of the Elkins conference call. "I would be surprised if they got this. I mean, how do you cut a deal for one guy?"
Integrated Health chief took a cut in '98;
No bonus for Elkins as earnings disappoint; Executive pay
THE BALTIMORE SUN May 8, 1999
He did collect $809,935 in salary. In 1997, Elkins picked up $752,277 in pay and $3.25 million in bonuses.The company, which is based in Owings Mills and operates nursing homes and other health businesses, agreed to pay $14 million in severance and other payments to its departing president, Lawrence P. Cirka.
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Elkins, who founded the company in 1986, receives a bonus equal to his annual salary if the company meets earnings goals set by the board of directors, according to the proxy statement.
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He also received bonuses over the past few years tied to the sale of IHS' pharmacy division, the spinoff of a subsidiary and the acquisition of a home health company that has since been sold.
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Integrated stock, which traded at nearly $40 a share a year ago, fell 25 cents in trading yesterday to close at $4.50 a share.
Integrated Chief Prospered Troubled Times
in Nursing Homes
Albuquerque Journal August 1, 1999, Sunday
The head of the biggest operator of nursing homes in New Mexico earned about $8 million in salary and bonuses in three years, according to a company document.Robert Elkins, chairman and chief executive officer of Integrated Health Services of Owings Mills, Md., earned $2.3 million in salary for years 1996 through 1998, says the document filed with the Securities and Exchange Commission.
He earned nearly $5.8 million in bonuses for years 1996 and 1997, the document says.
Integrated also is making irrevocable contributions to a retirement trust for Elkins that is to hold $23.9 million by 2001, according to the document filed with the SEC.
Integrated also leases at a cost of nearly $1.1 million a year an aircraft from a company wholly owned by Elkins, the document says. Elkins has exclusive first use of the airplane but must reimburse Integrated for its out-of-pocket costs if he uses the aircraft for personal reasons.
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Elkins, a psychiatrist in his mid-50s, co-founded the company in 1986."Integrated looks like a company out of control," a compensation expert told Business Week magazine. "The company's financial problems, he (Elkins) helped create. It seemed like he tried to find every conceivable way to figure out how to pay himself."
The Baltimore Sun reported that Elkins and Integrated in combination gave $572,500 to President Clinton's re-election effort and the Democratic Party in the 1996 election cycle. Elkins was invited to three White House coffees, the newspaper said.
Integrated agreed to pay $14 million in severance and other payments to its former president, Lawrence Cirka, according to the company document filed with the SEC. Deducted from the payments was $4.85 million Cirka paid for a house in Florida. He had been leasing the home from Integrated.
Dr. Robert Elkins
* Co-founder, chairman and chief executive officer of Integrated Health Services of Owings Mills, Md.
* Earned about $8 million in salary and bonuses for years 1996 through 1998.
* Elkins' retirement trust is to hold $23.9 million by 2001.
* Received M.D. degree from the Upstate Medical Center, State University of New York, and completed residency at Harvard University Medical Center.
Health Firm in Survival Struggle;
Executive Compensation Questioned in Wake of $1.8 Billion Loss
The Washington Post November 19, 1999, Friday
Integrated Health Services Inc., once a powerhouse in the health-care industry, is clinging to the critical list with its vital signs fading.After growing fast and paying its CEO millions during the 1990s, Integrated has been in a downward spiral in 1999. The company reported this week that it lost $ 1.8 billion in the third quarter as it wrote down the value of assets.
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Though shareholders' investments in Integrated Health nearly evaporated,the company cushioned the blow for chief executive Robert N. Elkins.
In March, the company loaned Elkins $ 11.5 million "to assist the company in retaining Dr. Elkins on a long-term basis in light of the significantly reduced stock price and the loss of equity incentives," according to Integrated Health's April 30 proxy statement filed with the Securities and Exchange Commission.
The loan was part of a program the company adopted to enable senior executives to buy and hold Integrated stock after the value of their stock options declined. The proxy said those loans would be forgiven over a five-year period if the borrower was still working for Integrated Health.
"This is what gives executive pay a bad name," said Graef Crystal, who edits a report on executive compensation.
"Why do they want to assist to retain him with that sort of performance?" Crystal asked. "I would loan him the money if he would go work for a competitor."
As of March 31, the company had outstanding loans to Elkins totaling $ 37.3 million, according to the proxy statement. One loan for $ 8.75 million, made in November 1998 and due to be repaid in September 1999, was used to pay taxes that resulted from the exercise of stock options, the proxy statement said.
In January, the company forgave $ 4,158,065 of principal and interest on another loan to Elkins, the proxy said.
The company had contributed $ 18.8 million to a trust for Elkins as of Dec. 31, 1998, and it had committed to make sure there would be $ 23.9 million in the trust by Jan. 2, 2001, the proxy said. But in the event of the company's insolvency, that money could be claimed by Integrated Health's creditors, the proxy said.
In 1997, Integrated Health agreed to pay another company wholly owned by Elkins a minimum of about $ 1.1 million a year for seven years to lease an aircraft, the proxy said. The lease provided that Elkins "shall have exclusive first use of the aircraft . . . even if Dr. Elkins is terminated as an employee of the Company for any reason," the proxy said.
Under the lease, the company was obligated to pay maintenance and operating costs, but Elkins was responsible for the company's "out of pocket" expenses when flying for personal reasons, the proxy said.
"There's a tremendous gap between the value that the shareholders are seeing and the value of the compensation package, and it doesn't make any sense," said Laurence Stybel, a consultant to corporate boards.
In July 1998, Integrated agreed to pay its former president, Lawrence P. Cirka, $ 11.3 million in severance plus $ 2.7 million in retirement benefits and deferred compensation.
This April, with Elkins's consent, the company took back 282,353 shares that it had contributed to an executive retirement plan for Elkins.
The company said it took that action "due to the Company's financial performance in 1998," when Integrated lost $ 68 million.
Elkins's 1998 cash compensation--salary and life insurance premiums--totaled $ 821,533.
But he isn't immune to the shareholders' pain: As of March 1, he and his wife held 2.8 million shares and options, 5.1 percent of Integrated Health's common stock.
Monday Morning
The Washington Post November 22, 1999, Monday, Final
Edition
$ 8,062,212That is the amount Integrated Health Services Inc. has paid in direct cash compensation -- salary and bonuses -- to CEO Robert N. Elkins in the three years ended Dec. 31. During those three years, Integrated Health had a combined net loss of $ 55.1 million.
Elkins's direct pay, of course, doesn't include the $ 14 million the company contributed in 1998 to a trust for the benefit of his retirement, as well as the more than $ 1 million Integrated paid him in 1998 to lease a Gulfstream jet that he owns and has sole use of.
IHS expansion leads to Chapter 11
Modern Healthcare February 7, 2000, Monday
Despite its downward spiral, the company apparently went to great lengths to entice its chairman, chief executive officer and president, Robert Elkins, M.D., to stay at its helm. As recently as March 1999 the company lent him $11.5 million to "assist the company in retaining Dr. Elkins on a long-term basis in light of the significantly reduced stock price and loss of equity incentives," according to company filings. That sum brought loans outstanding to Elkins to $37.3 million.As of the end of 1998 the company also had contributed a total of $18.1 million to Elkins' retirement trust.
Elkins co-founded the company in 1986, after spending four years as a practicing physician and six years as vice president and co-founder of another long-term-care company.
In a written statement, Elkins cast the bankruptcy as a positive move in light of dire circumstances. "The dramatic impact of the implementation of the 1997 Balanced Budget Act on our revenue and cash flow severely impacted the company's ability to service our current capital structure," he said. "We believe we are taking the appropriate steps to assure that we emerge from the reorganization process with a sound capital structure."
Golden years fade for nursing home chains;
An industry booming only a few years ago struggles to survive
THE BALTIMORE SUN March 5, 2000, Sunday ,FINAL
"Egos get involved. You grow by acquisition, and you've got to get the deal done. There were some bad business decisions."Arvid Muller, a senior research analyst for the Service Employees International Union, which represents thousands of nursing-home workers, said that while Medicare cuts were a factor in the bankruptcies, "some of the companies went into a huge buying spree. But they overpaid for the homes, and now they can't get enough revenue to pay their debts."
Most nursing homes, he said, make money on an operating basis, but can't necessarily cover debt service.
IHS founder to step down as chain CEO
Balto. Co. company filed in February for reorganization Medicare cuts
cause losses New York consultant to take over as 'chief restructuring
officer'
THE BALTIMORE SUN July 28, 2000, Friday ,FINAL
Dr. Robert H. Elkins, who founded Integrated Health Services and built the Baltimore County company into a Fortune 500 company, will step down as IHS' boss, the company said yesterday.
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IHS, founded in 1986, grew rapidly by acquisition, but piled up $3 billion in debts in the process, then couldn't keep up the payments when the federal government cut Medicare reimbursements.As the company grew, Elkins received multimillion-dollar bonuses and perks such as an executive jet - leased from a company he owned.
He also became one of the country's biggest political contributors. He and IHS gave more than a half-million dollars to the Democratic Party in the 1996 election. That got Elkins invited to three White House coffees - but didn't deter the 1997 Balanced Budget Act that was a major factor in bringing down his company.
The company said it will continue normal operations. "Joe Bondi, the creditors and IHS realize that their first commitment is to the continued maintenance of high-quality patient care," Dr. Elkins said in a statement released by the company yesterday.
IHS had about 1,500 employees at its Sparks headquarters when it began reorganization. It does not operate nursing homes in Maryland. Elkins, other company officials, representatives of creditors and Bondi could not be reached last night for comment.
Elkins, a psychiatrist, and IHS were pioneers in "subacute" services - care that is less intense, and less expensive, than in a hospital.
He began buying nursing homes, converting some of the rooms to the higher subacute level. He also snapped up businesses in such related fields as contract therapy, home care and pharmacy. By 1998, IHS pulled in slightly less than $3 billion in revenue - double the revenue of two years earlier. It operated at 1,500 locations in 47 states.
Elkins held stock worth more than $60 million at the peak share price of $42.25 in 1995. He received a $3.25 million bonus in 1997, on top of his $752,277 salary. As performance began to weaken, he received no bonus in 1998 - the most recent year for which IHS filed a proxy form - but did get $800,000 in salary and forgiveness of $4 million in loans. IHS set aside $18 million to finance his retirement, as part of a "key employee" plan. He was the only member.
As the impact of Medicare cuts hit, IHS lost $2.2 billion last year, including all one-time charges. It filed for bankruptcy in February, joining other nursing home chains.
$50 million package for IHS founder --
Departure deal subject to approval of Bankruptcy Court --- Loans
would be forgiven --- 'He should be suffused with guilt,' one critic
comments
THE BALTIMORE SUN July 29, 2000, Saturday
Integrated Health Services founder Dr. Robert N. Elkins will get a package worth more than $50 million for resigning as chief executive, if his separation agreement is approved by U.S. Bankruptcy Court in Wilmington, Del.Most of the amount would come in forgiveness of loans from IHS to buy company stock - which is now nearly worthless - and the taxes due on that amount, according to a motion filed by IHS late Thursday with the bankruptcy court. Elkins also would receive a $1,494,000 payment and would get to keep three oil paintings valued at about $1.1 million.
"The amounts seem large, they seem excessive, they seem like you're rewarding somebody for dismal failure - but they don't seem unusual," said Kevin J. Murphy, an executive compensation specialist who is a professor at the University of Southern California.
Another compensation expert, Graef Crystal, a columnist for Bloomberg News who has written critically in the past of Elkins' compensation, said of the termination agreement, "The board of directors of this firm has not been known for its wisdom, but you would not normally expect a board to do something like that."
Crystal said Elkins had received lavish salary, bonuses and perks while running IHS. "As a psychiatrist," Crystal said, "he should be suffused with guilt."
Elkins founded IHS in 1986 and built it from scratch into a Fortune 500 company, but along the way the company amassed $3 billion in debt through its aggressive acquisitions. Then the federal government cut Medicare payments and IHS, along with other nursing home chains, filed for bankruptcy protection.
If the court approves the agreement, Elkins would immediately step down as president, chief executive officer and chairman. Joseph A. Bondi, a turnaround consultant from the New York firm Alvarez & Marsal, Inc., who has joined IHS as "chief restructuring officer," would become CEO when Elkins departs, according to the IHS motion.
The company said it had initially resisted a call by the creditors' committee to replace Elkins "with a new manager more familiar with the restructuring and reorganization process." Eventually, IHS continued in the filing, "it was ultimately recognized by all parties that a consensual negotiated resolution of the matter would best serve the interests" of the creditors and the company.
A negotiated agreement, IHS argued, avoids litigation with Elkins and related companies he controls, which "would be counterproductive to the reorganization effort and demoralizing to employees. Moreover, it would constitute an unnecessary distraction and divert the time and energies of management at a time when the Debtors' businesses demand management's full attention."
In a letter submitted with the IHS motion, the official creditors' committee said, "The committee believe that consummation of the transactions provided for in the agreement is in the best interests of the debtors, their estates and their creditors."
Other creditors have a chance to file objections with the court; if there are any, the court will hold a hearing on the agreement.
Elkins, Bondi, representatives of IHS and lawyers for IHS and the creditors' committee all declined comment or did not return telephone calls.
One creditor, not on the committee, who did not want to be quoted by name, said he was unfamiliar with the terms of the Elkins agreement, but thought that it was important to bring new leadership to the company. "A turnaround guy brings total objectivity and lack of any connection to the past," he said.
" It makes a lot of sense you would have someone new come in," said Premila Peters, a high-yield bond analyst at KDP Investment Advisors in Vermont.
Key elements of the package, according to the IHS motion, are:
Forgiving $33.5 million in loans that were used to buy stock or pay taxes related to exercise of stock options.
James P. McElligott Jr., a compensation specialist with the Richmond law firm McGuire Woods, said many companies lend executives money to buy stock. "If the corporation later lands in bankruptcy, it's not unusual for the executive to seek forgiveness for these stock purchase loans," he added.
Murphy, who read Elkins' compensation agreement, said the amount of stock he owned - 5 percent of the company in shares and options - "puts him on the high side for executives."
Crystal said that, while some of Elkins' loan agreements called for his loans to be forgiven if he left or was fired, others did not. "I'm deeply suspicious of loaning anybody money and then forgiving it," he said. "It's hard to think of where it hasn't led to some debacle."
Since the loan forgiveness would be taxed, IHS would pay $18.5 million in federal, state and local taxes.
McElligott said this, too, was not an unusual request for departing executives. He noted that he was not familiar with the Elkins agreements, and was speaking about compensation in general.
But Crystal said, "No, no, no, no, no! Why would the creditors want to do that?"
IHS and Elkins agree in various ways not to sue each other, including over deals in which Elkins sold some nursing homes to a company of which he is an executive and a contract in which IHS leased an executive jet from a company that Elkins owns. With Elkins' departure, the jet lease will be terminated.
The agreement also includes a $35,000 payment for Elkins' "personal assistant" if she decides to leave the company.
Of the Elkins package, Murphy said, "I'd quit for that. Wouldn't you?"
180 IHS nursing homes would be taken over
by Trans Healthcare Inc.
The Baltimore Sun December 4, 2002
Along the way, Elkins also became known for pocketing lavish bonuses -$3.25 million in 1997 - flying in an executive jet (leased by IHS from a company owned by Elkins), and gazing at millions of dollars' worth of company-purchased Italian Renaissance and baroque art.
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After the bankruptcy, Elkins left with a "golden parachute" worth $55 million, most of it in forgiveness of loans he had used to buy company stock, which had become nearly worthless. (Three paintings, valued at $1.1 million, were pulled out of the severance package when the bankruptcy court reviewed it.)
