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Judge orders takeover of facilities

Owner of rehab, health care centers failed to pay loan

U.S. District Judge Kim R. Gibson has issued an emergency order appointing a receiver to assume control of six health care and rehabilitation centers located in western Pennsylvania because the owner of those facilities has not been paying on a $30.5 million loan taken out in 2022.

The company that granted the loan, Revere Tactical Opportunities Reit LLC, of Dallas, Texas, filed an emergency application for appointment of a receiver on Wednesday, noting the owner of the nursing home facilities, Bonamour Health Group, failed to make debt service payments in December, January and February.

The petition stated that “the default service payments are not only Events of Default under the loan and breaches of note. The failures also raise serious concerns with defendants’ financial stability, and in turn, the value of the mortgaged property — the collateral for the loan — and, more importantly, the ability of the defendants to continue operating the facilities and providing important health care services to the facilities’ patients and residents.”

It noted, for instance, that workers at one of the facilities, Ridgeview Healthcare and Rehabilitation Center in Curwensville, experienced delayed wages. Staff members at Jefferson Hills Healthcare and Rehabilitation Center in Allegheny County recently walked off the job due to delayed paychecks, or none at all.

“The lack of financial stability is a direct result of defendants’ mismanagement of the facilities. Without the immediate appointment of a receiver, defendants are likely to render the facilities essentially valueless, meaning Revere’s security interest will be worthless, employees will continue to defect from their jobs, and residents will face dire safety conditions,” the Revere petition continued.

The plea to the federal court was filed by attorney Eugene A. Giotto of Pittsburgh.

Gibson held an emergency hearing Thursday in Johnstown and granted the request for the appointment of a temporary receiver.

He appointed attorney Michael F. Flanagan of Kansas City, Missouri, to take control of the facilities, giving him an array of powers including taking possession of all documents, books, records, papers and deposit accounts.

Flanagan’s web page indicates that among his specialties is a focus on health care and corporate bankruptcies.

Gibson in his order stated Bonamour Health Group, headquartered in Clairton, sent an email supporting the appointment of a receiver.

The judge quoted from Bonamour CEO Shaya Zidele, who commented in the email, “please proceed with putting these facilities through the receivership process.”

Gibson ruled that under both state and federal law, the decision to appoint “rests with the sound discretion of the court.”

He explained that Revere’s sworn affidavit has shown that the default in payments has gone on for months and the CEO of Bonamour consents to the appointment of a receiver.

Attempts to reach personnel at Bonamour were unsuccessful.

The Flanagan appointment is temporary.

In his order, Gibson stated that he will conduct a hearing involving all the parties in April at the federal courthouse in Johnstown. The focus of the hearing will be on the appointment of a permanent receiver.

The facilities affected by the receivership include:

— Ridgeview, Curwensville, containing 131 beds.

— Jefferson Hills, 85 beds.

— Beaver Healthcare, Aliquippa, 67 beds.

— Mulberry Healthcare, Punxsutawney, 75 beds.

— Lakeview Healthcare, Smethport, 34 beds.

— Scottdale Healthcare, Scottdale, Westmoreland County, 35 beds.

The judge’s order stated the receiver is to “take immediate possession and full control” of the facilities’ assets.

The receiver has the duty to “ensure prompt payment of debt service and to safeguard the assets of the facilities,” Gibson’s order concluded.

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