LEBANON — Laundry service Kleen, which earlier this month closed its dry cleaning stores, will also shut down its commercial laundry service Friday, ending more than a century in Lebanon, leaving hospitals scrambling to find a replacement to process their linens and saddling about 100 workers with an uncertain future.

Kleen co-owner Ned Hazard, part of an investor group that bought the company from longtime owners the Gosselin family in 2006, said the closing was regrettable in a statement emailed to the Valley News late Tuesday.

“Obviously, this is a very difficult situation for myself and (co-owner) Dennis (Kim), as well as for our long standing and loyal employee and customer base,” Hazard wrote. “It is a very unfortunate ending to a difficult period for the Kleen business.”

Kleen employees said they were informed Monday afternoon that the company, with roots dating back to 1897, could no longer afford to operate unless hospitals were willing to pay more for laundry service. Kleen has been struggling financially in recent years, previously filing for Chapter 11 reorganization before emerging from bankruptcy two years ago.

On Tuesday, workers at Kleen’s laundry plant on Foundry Street said that Kleen recently had ceased servicing large customers such as Elliot Hospital in Manchester and Southern New Hampshire Medical Center in Nashua and last week notified employees it was cutting back work shifts from a first and second shift to just one.

“Then yesterday they told us over the weekend they decided to close because they couldn’t get the hospitals to renegotiate the contracts,” washroom worker Jason Sheehan, of Claremont, said during a smoke break outside the Kleen plant Tuesday.

He said he was among a group of employees in recent weeks who saw their paychecks bounce when they tried to cash them.

“There are a lot of angry employees,” said Sheehan, who has worked “off and on” at Kleen for four years. About 100 people work at the Lebanon plant.

The company for a long time had a reputation as a dependable employer with health insurance and lots of overtime pay and one willing to overlook a person’s background “because it’s what you do today and not what you did in your past,” said Bill Monette, of Cornish, the chief engineer at Kleen who worked there for 32 years. “A lot of people came here with shady backgrounds and hope to get a clean slate.”

One of them, Philip Canale, of White River Junction, heavily tattooed over his face and arms, said he has spent a total of 31 years in prison and when released from Grafton County jail this past September couldn’t get work because of his appearance.

“But (Kleen) gave me a break. ... They didn’t judge you on your past,” he said.

Canale said he’s now worried that, given his criminal record, he won’t be able to find another job and pay for his apartment.

“I have bills to pay now,” he said.

Hospital impact

The sudden decision to close has left close to 20 hospitals in New Hampshire and Vermont, including Alice Peck Day in Lebanon, New London Hospital and Gifford Medical Center in Randolph talking with linen service providers as far away as New York and Canada to step in to fill the void.

“It’s a pretty serious situation,” said Doug Pfohl, vice president of support services at Gifford Medical Center, which has some 250,000 pounds of linens cleaned annually. “It’s really unfortunate Kleen provided as little notice as they did.”

Ben Cass, a second-shift supervisor who has worked at Kleen for 11 years, said Kleen at its peak was processing 14 million pounds of commercial laundry per year, but, after the most recent loss of clients that also included HealthAlliance hospitals in Massachusetts and Wentworth-Douglass Hospital in Dover, N.H., he estimated Kleen has been processing 6 million to 7 million pounds annually.

As word began to spread last week that Kleen was closing its commercial division — spokespeople at several hospitals said they began getting tipped off from other hospitals before they got any official word from Kleen — there were conference calls to investigate the possibility of banding together as a consortium since smaller, individual critical care facilities in themselves did not generate enough laundry to justify the transportation costs for an out-of-state provider.

The New Hampshire Hospital Association said 15 of its 31 members relied upon Kleen to process their laundry.

By early this week, some hospitals were able to plug into the laundry service network of their affiliated institutions.

“APD was able to join with other (Dartmouth-Hitchcock Health) system members in the existing linen contract with United Linen Services, thus ensuring continuity of linen service for our patients,” Alice Peck Day spokesman Peter Glenshaw said.

The D-HH members in the Upper Valley, besides APD, include Mt. Ascutney Hospital and Health Center in Windsor and New London Hospital.

Springfield (Vt.) Medical Care Systems is “reviewing options and vendors,” said Anna Smith, a spokeswoman for the 25-bed critical care facility in Springfield. She said the hospital “has to act quickly” but officials are “pretty confident things will work out.”

Pfohl, of Gifford, said last week’s conference call included such as hospitals as Copley Hospital in Morrisville, Vt.; Rutland Regional Medical Center in Berlin, Vt.; Springfield Medical Care Systems; Mt. Ascutney Hospital in Windsor; and Cottage Hospital in Woodsville, N.H., among others.

“All of us combined generate about 4 million pounds annually of laundry,” Pfohl said, which would be sufficient to entice a laundry provider to provide service, “as compared to a few hundred thousands pounds each. Scale is important.”

Pfohl said he didn’t know why Kleen couldn’t make it work.

“They had such a monopoly with the hospitals they served in the area that no one else was serving,” he said. “They didn’t go down swinging. They just went down.”

John Lippman can be reached at jlippman@vnews.com.

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