Hartford, Conn. Citing continuing defaults on secured indebtedness, Chase Manhattan Bank officials foreclosed on U.S. HomeCare Corp. in mid-April. Simultaneous with the foreclosure, the company ceased to operate, and its board of directors and its chief executive officer, Sophia V. Bilinsky, resigned, officials said.

"The company has explored many other alternatives to its cash-flow problems," Bilinsky and chairman Jay C. Huffard said in a joint statement. "In the bank's judgment, this was the only alternative given the depressed nature of the home health care industry and the bank's level of interest in continuing its support of the company's cash-flow shortfalls."

The bank has already sold portions of the company, which provided home health care services (including home medical equipment, respiratory and infusion) to patients in New York, Connecticut and Pennsylvania.

National Home Health Care Corp., a Scarsdale, N.Y.-based nursing and paraprofessional home health care company, purchased certain assets of the Connecticut operations to expand its presence in the state, said Steven Fialkow, president and CEO.

The Pennsylvania operations were acquired by Star Multi Care Services, a Huntington Station, N.Y., provider of high-tech home health care and long-term care services. Under the agreement, Star assumes U.S. HomeCare's business in Philadelphia, Lancaster and Pittsburgh, which complements its existing operations in Allentown, Star officials said.

The bank sold the company's New York operations to Premier Home Health Care, officials said.

"U.S. HomeCare has a long history of excellence in serving the many patients in its communities, which we hope will be continued," Bilinsky and Huffard said in their joint statement.

The sales and the foreclosure signal the final chapter in the history of U.S. HomeCare, which went public in 1991 and for the last few years has been plagued by financial losses, failure to meet debt obligations and stock prices that could be counted in pennies. Officials attributed the company's troubles to the interim payment system and the resulting repayments to the Medicare program, repayments related to liabilities incurred in the early 1990s, the burden of repaying a 1998 New York attorney general's settlement and Y2K-related cash-flow problems.

While Huffard in an interview acknowledged that some of U.S. HomeCare's problems were of its own making, he noted that the government has made it very difficult for home health companies to operate. "It's a tough time for home care, as you can see from companies who have filed for Chapter 11 bankruptcy protection," he said. "I think the whole structure of Medicare and Medicaid is almost impossible to operate under. I don't think doctors find it appropriate, and most health care institutions don't.

"One's hope," he added, "is that [the system] works better for the successor companies than it did for U.S. HomeCare." -S.H.

Clearwater, Fla James T. Kelly, chairman of the board for Lincare Holdings, retired effective May 8, officials said. He was succeeded as chairman by John P. Byrnes, president and CEO. His board seat will not be immediately filled, officials said.

Kelly has been involved with Lincare since the company's founding in 1985, when he came aboard as a director. He served as CEO from 1986 through 1996, becoming chairman in 1994.

"When Jim Kelly joined Lincare, the company was a $40 million business struggling to achieve profitability," Byrnes said. The company now racks up annual revenues of nearly $600 million, he said. "Jim has clearly been the driving force behind this remarkable turnaround and success."