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Bankruptcy judge OKs proposal on Carrington South management



Published: Fri, October 20, 2006 @ 12:00 a.m.



New management is in charge and the crisis is over, a lawyer says.

By PETER H. MILLIKEN

VINDICATOR STAFF WRITER

YOUNGSTOWN -- A U.S. Bankruptcy Court judge has given Carrington South Healthcare Center Inc. a new lease on life after the nursing home faced the prospect of closing immediately, laying off about 200 employees and having the state relocate about 100 residents.

On Thursday, Judge Kay Woods approved a proposal from 850 E. Midlothian LLC of Youngstown to manage the nursing home, which is located at that address, on an interim basis through an affiliate company.

The 850 corporation, owned by nursing home administrators Edward and Diane Reese and nursing home owner Jack DePizzo, also made an offer to buy the nursing home for 4 million, known as a stalking horse bid. Others wishing to submit bids must do so by Nov. 14, and an auction is scheduled for Nov. 20.

Diane Reese said in bankruptcy court that her corporation "absolutely" intends to keep the nursing home open without interruption. "The residents in that facility are our first concern," she added.

Carrington South Real Estate Inc., which owns the real estate at 850 E. Midlothian Blvd., and Carrington South Healthcare Center Inc., which owns the nursing home, both owned by Robert VanSickle, filed Tuesday for Chapter 11 bankruptcy.

Others interested

Carrington South Healthcare Center's lawyer, Andrew Suhar, said he knows of two other potential buyers besides the corporation owned by the Reeses and DePizzo. Only those who intend to continue the nursing home's operations will be permitted to bid, Suhar said.

"There was a crisis. It's over," Suhar said. "Everybody can rest assured that there's going to be a new owner and that there's new management in there," he said, adding that the new management took charge of the facility Thursday afternoon.

The bankruptcy filing followed the state's withholding last week of the nursing home's September Medicaid reimbursement of about 350,000 to cover the nursing home's unpaid franchise taxes. As part of the arrangement to keep Carrington open, the state agreed to release that money and not withhold future reimbursements, with the understanding that it would be first in line to collect monies owed by Carrington.

List of creditors

Carrington's creditors include General Electric Capital Corp. of Bethesda, Md., which holds a 4.2 million mortgage on the property and filed for foreclosure on it; the IRS, which is owed more than 3 million in payroll taxes; and the State of Ohio, which is owed about 2.5 million. The state says it is owed payroll taxes, Workers Compensation premiums, franchise fees and Medicaid overpayments.

"The overwhelming concern of every entity involved, regardless of their individual positions, was the welfare of the residents," Suhar concluded.

milliken@vindy.com




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