Boston city councilors on Thursday blasted Radius Specialty Hospital for shutting down its Roxbury and Quincy rehabilitation facilities, transferring its patients, and laying off nearly 350 workers with little notice.
Radius workers found themselves out of jobs just about two weeks after the company publicly acknowledged on Sept. 23 that it would stop operating. At a City Council hearing on the shutdown, Radius's lawyer said the company had no choice because it was rapidly running out of cash. But councilors did not buy the explanation.
"This is a disgrace," Councilor Ayanna Pressley told laid-off workers who attended the hearing. "This is no way to repay people who have been as committed and dedicated as you have been."
The criticisms from the City Council were just the latest of recent troubles for Radius. Steward Health Care, which was leasing space to Radius at the Steward-owned Quincy Medical Center, last week sued to collect more than $1 million it says Radius owes in back rent.
In the lawsuit, Steward said Radius has not paid its full rent for more than a year. Radius disputes the claim.
Two labor unions, the Massachusetts Nurses Association and Local 1199 of the Service Employees International Union, have also sued Radius, alleging the company failed to give proper notice before shutting its doors. Both unions had members who were laid off by Radius.
Radius ran a 38-bed facility in Quincy and an 84-bed facility in Roxbury. The Quincy operations, though smaller than Roxbury's, generated enough money to subsidize the struggling Roxbury site, according to Radius's lawyer, Stewart F. Grossman.
Grossman told city councilors that the events that forced the company to shut down were largely out of Radius's control. He said the problems began Aug. 11 when South Shore Hospital in Weymouth stopped referring patients to the Quincy facility.
Then, when Radius's bank, Santander, learned of its struggles, the bank recalled Radius's loans of $16 million and froze an account holding $2.4 million.
City councilors said that in addition to Santander and South Shore Hospital, Partners HealthCare also shares the blame for Radius's closing. Partners, which is seeking to acquire South Shore Hospital, operates its own rehabilitation facilities.
Representatives from South Shore and Partners were invited to testify at the hearing but did not attend. Councilors said they would ask them to testify at a continued hearing next week. They said they would also ask Santander to testify.
South Shore Hospital's spokeswoman, Sarah Darcy, said the hospital never stopped referring patients to Radius.
"Referrals are based on a patient's medical need and preference," she said in an e-mail. "Statements that allege that our referral patterns are influenced by our proposed merger are false. South Shore Hospital is not a part of Partners HealthCare."
Partners spokesman Rich Copp said this is "not a Partners HealthCare matter," but "if the city council wants us to appear next week, we'll be happy to appear."
Santander declined to comment on Radius, citing privacy rules, but said in a statement: "We are a responsible lender and endeavor to work with customers in the event they have difficulty meeting their obligations to the bank."
Radius's sudden closing has thrown the lives of its former workers into disarray, the workers told city councilors.
"The way everything happened was so abrupt," said Agatha Layne, who worked as a nurse in Roxbury. "We didn't have time to even think. What about all the workers who have children in college? What are we going to do?"
Hillie Sampson, a cook, said he is struggling to find work after 37 years with Radius.
"I'm playing catch-up," he said. "It doesn't make life easy for you, especially when you're middle-aged and you have to go out and find a job, and you're competing with all these young people."
Grossman apologized to the laid-off workers.
"I really feel terrible for this situation," he said. "My clients had every intention in the world to continue operating those hospitals."
Priyanka Dayal McCluskey can be reached at priyanka.mccluskey@globe.com. Follow her on Twitter @priyanka_dayal.