Severna Park company Dynasplint Systems Inc. laid off 500 employees, including about 250 in Maryland, on Tuesday after its lender moved to foreclose on its property, including cash that was to cover payroll.
In a letter to laid-off employees obtained by The Baltimore Sun, company President George Hepburn wrote that a local bank put about $1 million that the company had deposited since Aug. 1 toward a $9 million line of credit owed, instead of employee paychecks. Hepburn said he had to cut the company’s work force by 70 percent as a result.
“It was a shock,” Hepburn said in an interview.
Dynasplint sells devices used in physical therapy rehabilitation to help patients regain range of motion. The company is based in Severna Park and has a manufacturing center in Stevensville, as well as offices in New Jersey, California, Ohio, Louisiana, Canada, Germany and the Netherlands.
The company had 661 employees before the layoffs, Hepburn said. He said he plans to recall most of the laid-off workers after repaying the company’s debts, possibly by mid-November.
Hepburn had been working to line up a different lender, at its lender’s urging. But that process was complicated, Hepburn said, because of a federal lawsuit in which a former employee accused the company of making false Medicare claims, an allegation the company denies.
Hepburn founded the company out of his physical therapy practice in 1981, growing it to a peak of 700 employees, $75 million in annual sales and profitability, he said.
Anne Arundel County Workforce Development Corp. officials were expected to reach out to the workers and offer assistance. The layoffs include 180 people from Severna Park, 60 from Stevensville and fifty-six Maryland salespeople.
Hepburn also offered them help in his letter.
“Please know that I did not make this decision without exhausting every possible alternative,” Hepburn wrote. “I will do everything in my power to help you in your transition using every resource available to me.”