Pit5 Music News Cache

By DAVE COLLINS, Associated Press Writer Wed Nov 21, 12:45 PM ET

HARTFORD, Conn. - A nursing home company has declared bankruptcy amid a state inquiry into whether its CEO illegally used Medicaid funds to launch the label for which Travis Tritt and other country stars record.

Haven Healthcare Corporation filed for voluntary Chapter 11 on Tuesday in New Haven bankruptcy court, asking for protection from the tens of millions of dollars it owes creditors while it restructures.

State officials allege the company let bills go unpaid while using company funds to launch a Nashville, Tenn.-based record label, among other investments. That record company, Category 5 Records, does not appear in the bankruptcy filings.

Ray Termini, the record company's chief executive officer, is also the CEO of Haven Healthcare. The label signed Tritt to a four-year deal in 2006; its other artists include Sammy Kershaw, George Jones and Shauna, according to the company Web site.

Haven Healthcare has been fined more than 45 times in three years for poor patient care at its New England nursing homes. Termini said his company acted quickly to address problems, adding that its record is similar to or better than other health care companies.

Termini has denied misusing Haven Healthcare money to start the label. He said much of the company's financial problems were caused by a low Medicaid reimbursement rate for health care services.

"Haven Healthcare has taken the extraordinary step of filing for Chapter 11 protection in federal court to protect our company, our staff, and most importantly the thousands of patients and residents that we care for each day," Termini said in a statement.

Tritt's manager, Duke Cooper, has said that Tritt is prepared to protect his interests by taking legal action against Termini if needed.

Tritt has sold more than 25 million records over two decades, earning two Grammy Awards and three CMAs. He released his first album with Category 5, "The Storm," in August and plans a yearlong tour beginning in January.