Planned Strike Complicates Transfer of Bankrupt Nursing Home to New Owners

The transfer of a bankrupt nursing home in New York may soon hit another snag as a union representing the facility’s workers tentatively approved a strike in response to the potential new owner’s request to reject its labor contracts.

Employees of the Bethlehem Commons Care Center in Delmar, N.Y., represented by 1199SEIU United Healthcare Workers East, filed a strike notice Monday, according to a report in The Times Union of Albany — adding another layer of complexity to a proposed takeover by Centers Health Care.

Good Samaritan Lutheran Health Care Center — which currently runs the 120-bed skilled nursing facility and the 66-bed assisted living facility Kenwood Manor — filed for Chapter 11 bankruptcy in December, with plans to sell the facility to the Bronx, N.Y. based Centers for $7.5 million.

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Good Samaritan blamed an investigation into related-party funding rules for the financial difficulties that drove the operator to bankruptcy*; the Times Union initially reported the filing on December 17.

At the time of filing for Chapter 11, the nursing home was at 84% occupancy with 154 workers, covered under collective bargaining agreements (CBAs) between the union and Good Samaritan. But Centers had asked a bankruptcy court judge to reject those CBAs as a condition for taking over, drawing the ire of the union and prompting the strike action.

The planned strike would begin on January 24 and last for three days, according to the Times-Union, with leaders at the facility required to come up with alternate care plans for the building’s residents.

The property transfer now also hangs in the balance — with the current operator’s parent company arguing that the facility is in danger of closing because the terms of the employee contract are a sticking point for completing a sale to any buyer.

“A primary reason cited by potential purchasers for refusing to move forward with their purchase of the sale assets is that the benefits afforded to workers under the (agreements) are excessive and materially inconsistent with the benefits afforded to workers at similar care facilities in the…region,” Lutheran Care Network CEO Laraine Fellegara wrote in a bankruptcy filing, according to the Times Union.

A union leader told the publication that the workers had offered $1.2 million in concessions during the most recent round of negotiations. A representative for Centers declined to comment to SNN, citing the ongoing negotiations.

*Editor’s Note: Due to an editing error, an earlier version of this story mischaracterized the related-party funding issue that the owners cited as a reason for the bankruptcy; the laws regarding such relationships in New York have not changed. SNN regrets the error.

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