A bankruptcy judge described the distribution of worthless paychecks to former Living Hope Psychiatric Hospital employees as reckless at a hearing Thursday in Little Rock.

U.S. District Judge James Mixon of the Western District of Arkansas also ruled that Kimbro Stephens, the hospital’s head of operations, didn’t have standing to request that the former hospital’s bankruptcy lender, Northern Healthcare Capital of New York, be forced by the court to fund the payroll.

“I don’t believe it was reckless of me to hand out checks,” Stephens said. “It was Northern’s reckless be...

Log-In to view full story or view our Registration Guide.