Quapaw House Officially Declared Insolvent


Quapaw House Officially Declared Insolvent
Quapaw House Inc. of Hot Springs is insolvent and a second receiver has been appointed. (Google Maps)

Well, you might have seen that Quapaw House Inc., the troubled Hot Springs drug and alcohol treatment provider, is officially insolvent.

Quapaw House’s liabilities “exceed its assets and it is unable to pay its debts as they come due,” Quapaw’s attorney, G. Spence Fricke of the Barber Law Firm of Little Rock, wrote in a court filing earlier this month in Garland County Circuit Court. “Its creditors face the risk of irreparable harm unless its assets are liquidated and its affairs are wound up.”

Quapaw House also said it has defaulted on a number of its financial obligations and has been named in several lawsuits seeking to recover “large sums of money.”

If you recall, in June, the Levi Hospital System of Hot Springs asked the Garland County Circuit Court to relieve the hospital system of its duties as receiver because Quapaw House was insolvent and had no employees and no open locations. In addition, Quapaw House’s debts were more than $13 million, Levi said. Levi was released from its duties as receiver (after paying some of the Quapaw House employees since they would otherwise have missed a paycheck).

On Sept. 4, Circuit Court Judge Lynn Williams appointed David S. Mitchell Jr. of the Rose Law Firm in Little Rock as the receiver.

Mitchell’s duties will include distributing Quapaw’s property to its creditors.

The problems at Quapaw House, founded in 1980, appear to have started after it acquired the Arkansas assets of scandal-plagued Preferred Family Healthcare in October 2018, after multiple PFH executives — including Rusty Cranford of Rogers — were convicted of embezzlement and corruption.

The PFH acquisition was a big revenue boost for Quapaw House but didn’t help the bottom line.