A judge this week held the management company for the troubled Blue Ridge Rehab Center skilled nursing facility and Blue Ridge Manor assisted living facility in contempt of court, and ordered leaders to turn over records required by the third-party receiver operating the properties.
If they fail, the company and its leaders could face fines of $1,000 for each day they do not provide the information.
The Martinsville Bulletin reported the ruling on Wednesday in the newest development in the receivership case around the two facilities.
The properties themselves are owned by affiliates of real estate investment trust (REIT) Omega Healthcare Investors (NYSE: OHI), which made the first move to place the buildings in receivership in July.
A spokesman for Omega declined to comment to SNN beyond emphasizing that the REIT is not involved in the contempt action.
Suzanne Roski, the third-party receiver appointed by Virginia Circuit Court Judge G. Carter Greer on June 20, had claimed in a motion that she was being denied crucial information and access to records in her work to keep the facilities open, the Bulletin reported.
Attorneys representing Roski argued that she needed access to Blue Ridge’s accounting information, computer server, and e-mails, and that Sovran Management Company — the higher-level company that owns Blue Ridge’s various corporations — had not provided that access within three days, as ordered in July.
Greer agreed that Sovran is in contempt of the earlier order. He also ruled that Sovran’s managers, owners, and a legal firm representing them are subject to the court order and are in contempt of court, the Bulletin reported.
Roski’s appointment as receiver came at the request of the Omega affiliates, OHI Asset Martinsville LLC and OHI Asset Martinsville ALF LLC, in a lawsuit filed against BRVA Properties LLC, BRNURSCO LLC, and BRALFCO LLC, the Bulletin reported.
BRVA Properties was named as the tenant, while the other entities were named as “defendant operators,” according to the publication.
The operators had failed to pay more than $7 million in rent and other expenses, the paper noted, and Roski’s motion indicated that because of Sovran’s lack of cooperation, the management company she had hired did not gain access to the cash accounts until June 25.
Her attorneys raised questions in the hearing about $9 million that was transferred to Sovran out of the Blue Ridge business, with no explanation, the Bulletin reported. The transaction occurred in 2018, when BRVA Properties LLC (Blue Ridge) changed its name to Blue Ridge Properties Holdings LLC and transferred the money to Sovran, according to plaintiff’s attorney Leighton Aiken.
Michael Marshall and George Wagner are the primary officers of the defendant companies; Aiken told the Bulletin that a separate legal case in Florida revealed that Marshall and Wagner own 100% of Sovran Management.
Blue Ridge made headlines in 2018 when CEO Chris Oswald cut his own position in an effort to reduce costs amid lower reimbursements and lengths of stay.