Several former Skyline Healthcare properties in South Dakota could soon be transferred from a court-appointed receiver to a new permanent operator, but one lender involved in the case is arguing that it won’t get paid if the deal happens.
The Aberdeen News first reported the news late last week.
Skyline fell apart financially in South Dakota roughly a year ago, when 19 facilities in the state came to the brink of running out of food and medical supplies. That collapse came after the Wood Ridge, N.J.-based company’s facilities in Nebraska and Kansas had to be placed in receivership; Skyline’s properties in Pennsylvania and New Jersey also had to be transferred from the troubled operator shortly after South Dakota took action.
Golden Living, which owns the facilities in South Dakota, formed Black Hills Receiver to take over the management of the properties. South Dakota approved the closure of two SNFs in Mobridge and Madison last year.
Black Hills Receiver requested that the operations of the remaining 17 SNFs be transferred to the Skokie, Ill.-based Cascade Capital Group, which recently acquired properties from an operator with a presence in Minnesota and South Dakota. That’s according to court documents filed April 19, cited by the Aberdeen News.
Black Hills Receiver requested the transfer of operations take place on June 1. If the transaction occurs, all subsequent revenue and liabilities would go to Cascade, according to the request cited by the publication.
“Debt owed before the transition would fall to Skyline, which Black Hills Receiver has been court-appointed to oversee,” the Aberdeen News noted.
But lender MidCap argued that it would not be paid back if the operations are sold and asked the court to require Black Hills Receiver — the plaintiff in the case — to change the motion to include the money owed to MidCap.
The money owed to MidCap, which is part of Apollo Global Management and is headquartered in Bethesda, Md., has been used to fund operations for the past year, MidCap argued in the court filings cited by Aberdeen News.
“Twelve months ago, plaintiffs told the Court that if MidCap would simply show some ‘patience for the patients,’ plaintiffs’ use of MidCap’s collateral to fund the operations of the nursing homes would end, and MidCap would be made whole,” the documents said, as quoted by the publication. “Instead, money owed to MidCap has continued to be used to fund failing operations for the sole purpose of preserving the value of plaintiffs’ real property.”
A hearing for the case is scheduled for June 3 in Pierre, S.D.
A spokesman for Cascade declined additional comment to SNN, citing the transaction process; MidCap was unable to provide a comment by press time.