From Receivership and $16M Loan Default to $7.8M Skilled Nursing Sale

A skilled nursing facility that had been in receivership for most of the year recently found a buyer for nearly $8 million.

Eden Springs Healthcare Center in Green Springs, Ohio, will soon be sold to a subsidiary of the New Jersey-based Cedarcare Holdings, LLC, according to a report this week in the local Fremont News-Messenger.

The facility entered receivership after lender CIBC filed a lawsuit back in January, claiming that its previous owners — the Brooklyn-based Homes of Eden — defaulted on a $16 million loan it had received after buying the property for $13 million in 2016, the publication reported. At the time of the receivership action, the former owners owed more than $14 million on that loan.

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The property had also faced a $2.1 million breach-of-contract lawsuit filed by its previous CEO, as well as more than $400,000 in back taxes and bills.

Michael Flanagan, of his namesake consulting firm based out of Overland Park, Kan., told the publication that the sale will be finalized within the next two to three months, pending a court hearing in early August.

“Considering we took this over in January, this sale is much sooner than some of the other properties we’ve had in receivership,” he told the publication.

Receivership has been a common thread in the skilled nursing world over the last few years, as both operators and courts attempt to maintain continuity — and quality care — until new owners can take over struggling nursing homes. The now-defunct Skyline Healthcare, which collapsed over the course of the last two years, recently saw a slew of its SNFs enter receivership.

In South Dakota, for instance, 16 former Skyline facilities in receivership were sold to a new Illinois-based operator last month, concluding a protracted process that saw multiple creditor objections before the deal could be finalized. Skyline’s properties in Massachusetts, however, did not see the same fate, with all five in receivership closing their doors.

Most recently, a pair of facilities in Virginia — owned by affiliates of real estate investment trust (REIT) Omega Healthcare Investors (NYSE: OHI) — entered receivership after falling more than $7 million behind on rent and other expenses.

Back in Ohio, the broker assigned to the Eden Springs deal received interest from multiple potential buyers by April, according to the publication, with Cedarcare eventually emerging as the buyer for the SNF — which includes long-term care, post-acute services, and senior living rentals.

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