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November 26, 2002

Suicide victim saw success slip away

From: Akron Beacon Journal, OH - 26 Nov 2002

Hearing-aid business fails when makers cut out middleman
By Jim Mackinnon
Beacon Journal business writer

Bruce Baskin and his Audiology Cos. thrived for years by buying and selling hearing-aid equipment. His trouble began when related businesses ended Baskin's status as middleman.

Now the companies are out of business and Baskin has committed suicide.

Baskin's hearing-aid discount businesses apparently were being undercut by manufacturers who decided about 1 ½ years ago to begin selling directly to his prime customers, audiologists, lawyer Ronald Towne said. Baskin co-founded companies that bought hearing aids and related merchandise and services in bulk and sold them to audiologists and others around the nation.

Baskin had hired Towne to collect the accounts receivable, then start liquidation or bankruptcy proceedings and to pay off creditors, Towne said.

``It just wasn't economically viable any more,'' Towne said. ``He had very little options except to liquidate.''

Towne, citing a conflict of interest, withdrew as Baskin's lawyer last week. The two worked together for less than two weeks, he said.

Baskin retired from the businesses in July, but remained their largest shareholder. The businesses, which shared headquarters in office space off South Arlington in Akron, have closed their doors and had their physical assets auctioned off.

Baskin's death Friday morning by a self-inflicted gunshot wound in a one bedroom apartment in South Akron followed the filing of two lawsuits against him and his businesses. He was 59 and leaves behind his wife, Barbara, who is well known in Akron social and theater circles, and their son. An auction of the contents of the Baskins' large ranch home in Bath Township was postponed Saturday morning.

One suit filed in Summit County Common Pleas Court by a group of creditors claims Baskin owed them large sums of money. The other suit by brokerage Merrill Lynch alleges Baskin wanted to move business funds to his personal accounts and move to Switzerland, leaving behind his wife. The accounts held slightly more than $1 million as of mid-November, according to Merrill Lynch's suit. The brokerage's suit in U.S. District Court seeks the court's guidance in how to dispose of the funds.

Towne said that the estimated 400 ``member creditors'' of the Audiology Cos. -- audiologists and businesses that got discounted merchandise and services -- were owed about $2 million.

Because Baskin bought in bulk, he was able to get a lower unit price than audiologists with smaller purchases. Baskin added about 10 percent over his costs to pay for expenses. A small fraction of that markup was supposed to be returned to the audiologists because they were part of a co-operative arrangement, Towne said.

``I don't think there was ever escrowed funds set aside for that purpose,'' Towne said. Other vendors were also owed additional money, he said.

Baskin's death does not end the litigation, attorneys said.

Monday, creditors filed a motion in U.S. District Court to have a receiver appointed to manage Baskin's assets and try to determine claims, said their lawyer, Sallie Conley Lux. Merrill Lynch also amended its lawsuit to take into account Baskin's death and named his widow as a defendant because his assets would go to her.

In addition, FirstMerit Bank late Friday afternoon, apparently unaware of Baskin's suicide, filed suit against him in Summit County Common Pleas Court, saying he defaulted on paying more than $76,000 on a $95,000 promissory note.

Towne said he didn't have a sense that Baskin was suicidal.

``Mr. Baskin accomplished a lot,'' he said. ``He was a very generous person in this community. I feel a tremendous sadness. I just think anyone who is just that personally upset deserves our sympathy and prayers.''

© 2002 Akron Beacon Journal