By Zahida Siddiqi
The sale of 15 bankrupt nursing homes in Pennsylvania might be under jeopardy, putting more residents in the state at risk of being displaced.
The sale is part of a financial reorganization plan of the nursing homes’ former owner South Hills Operations, a New York-based nursing home operator currently undergoing Chapter 11 bankruptcy. South Hills filed for voluntary protection from creditors May 17 under Chapter 11 of the U.S. Bankruptcy Code.
On Wednesday, the U.S. Department of Justice (DOJ) entered a $35.8 million judgment against South Hills Operations in Pittsburgh’s bankruptcy court, emphasizing South Hills was “jointly and severally liable” for underpaying its workers. A judge ruled earlier that South Hills Operations had “acted with malicious self-interest” in underpaying wages for 5,595 nursing home employees over a period of many years.
The nursing homes that could be impacted are located across seven counties in Western Pennsylvania. Together, these 15 for-profit nursing homes have a combined capacity of 2,046 patients.
The latest judgment follows a court ruling in July, in which four nursing homes in the Pittsburgh area that were part of the South Hills restructuring plan, succeeded in avoiding closure after an agreement was reached to sell the properties to New York-based WeCare Center.
The court eventually approved the sale of the four nursing homes to WeCare, which operates 10 facilities between the two states, with the condition that these facilities be sold “free and clear of all liens, claims, encumbrances, and interests.” The sale, initially slated for completion on July 15, faced potential collapse if not finalized. The bankruptcy court is scheduled to hold a hearing next week to address the sale of the nursing homes, according to an article in the Pittsburgh Post Gazette.
If the government’s claim is upheld, the other facilities will also be impacted.
This news comes amid a spate of closures and bankruptcies in Pennsylvania. Residents at Mountain View Care and Rehabilitation Center were relocated after its closure. Also, LaVie Care Centers, which has 9 facilities in the state, filed for Chap. 11 in spring. And last month, Guardian Healthcare, another long-term care provider based in the state, also sought Chapter 11 protection, affecting 19 nursing homes, pharmacies, and related businesses in Pennsylvania and West Virginia.
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Sale of 15 Bankrupt Nursing Homes in Pennsylvania in Jeopardy Amid Rising Closures
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