By Charles Wolfe
The Associated Press

CLINTON, Ky. - The remaining handful of residents began leaving bankrupt Birchtree Healthcare, Tina Conner's former nursing home, as a new operator prepared to take over Tuesday.

"It's very sad. It's devastating to me, personally and professionally," said Ms. Conner, who claims state regulators drove Birchtree out of business as a result of her ending a two-year affair with Gov. Paul Patton.

Ms. Conner, reached in Nashville, Tenn., said she intended to contest an agreement by which EPI Corp., a Louisville-based management company, will lease Birchtree for 18 months with an option to buy.

The lease rate is $22,794 a month. Ms. Conner said she already had a verbal agreement with EPI to take Birchtree on a five-year lease at $35,000.

"EPI has come in and lowballed" in separate negotiations with Birchtree's court-appointed bankruptcy trustee, Ms. Conner said.

John Snyder, EPI's president and chief executive officer, said Ms. Conner was mistaken. Mr. Snyder acknowledged that he had discussed a lease with Ms. Conner and with Dan Dabney, a consultant hired by Conner hired last year to oversee Birchtree.

But Mr. Snyder said the lease was to be at a rate the state determines by a specific formula that takes into account debt service and other things.

All of that was irrelevant to Keron Beshears, who has lived nearly two years at Birchtree and who learned that Tuesday was moving day for her and many of the seven other remaining residents.

Ms. Beshears, 79, pondered the sudden change. "I'm kind of upset," she told Ann Turner, the nursing home's dietary manager.

Kneeling beside Beshears' armchair, Ms. Turner explained that Ms. Beshears and her roommate, Beulah McCarthy, were going to a nursing home in nearby Mayfield.

"It'll be fine. You'll be in the same room together," Ms. Turner said. "You may be able to go to Wal-Mart more." Ms. Beshears giggled.

Ms. Beshears and the others had to leave because Birchtree is being shut down for two months while EPI remakes the nursing home.

When it reopens, Birchtree will have a new name, Mr. Snyder said.

The Birchtree name has become notorious, a near synonym for the sex scandal involving Ms. Conner and Mr. Patton.

After the affair ended, state inspectors cited Birchtree for multiple health and safety violations. Birchtree then lost its certification for participation in Medicare and Medicaid, which led to its financial collapse.

The state last summer removed dozens of patients whose care was paid for by the government. Ms. Conner alleges that a regulatory crackdown on Birchtree was an act of retaliation by Mr. Patton. The governor denied the charge, though he publicly admitted to the affair.

A federal grand jury and a state ethics commission are investigating Ms. Conner's allegations. Ms. Conner has also sued Patton alleging defamation, outrageous conduct and causing emotional distress. The suit is pending Franklin County Circuit Court.

In recent months, Birchtree operated on a shoestring while Ms. Conner waged a losing campaign to regain certification. Birchtree's bankruptcy trustee, Harry Mathison, said Monday in court that Birchtree had piles of unpaid bills.

Mr. Snyder, who looked it over Monday night, said the facility was in "mediocre shape."

Besides making repairs, EPI has to prepare for state licensure and federal certification, Mr. Snyder said. The company must also install a computer system, and hire an administrator and a staff of 75 to 80. Birchtree has 106 nursing care beds and 10 personal care beds.

Mr. Snyder said employees with good records could keep their jobs, and he expects most would be retained. He also said the workers had been "exceedingly cooperative and loyal" and had stuck by Birchtree without knowing whether they would be paid.

Mr. Snyder said Ms. Conner and Mr. Dabney "will have no involvement at all" when the nursing home is reopened.