Owner says California Palms will stay open

YOUNGSTOWN — Sebastian Rucci says his California Palms Addiction Recovery Campus in Austintown has secured new financing and will remain open.

He says this despite an agreed-upon court entry with the facility’s creditor that requires the rehab to vacate the premises by Dec. 4.

The company is “to take immediate and concrete steps to relocate all existing patients as soon as practicable and not later than Dec. 4, 2019, in conjunction with a plan acceptable to the appropriate Ohio regulatory authority,” the entry, filed Wednesday in Mahoning County Common Pleas Court, states.

But in an email Wednesday, Rucci said he “agreed to the consent order because we have secured refinancing and are confident we will (complete the financing) in November without having to close the facility.”

He said the agreed-upon entry “provides for continued refinancing efforts,” adding, “The need for inpatient beds during this severe opioid epidemic far outstrips supply and it is in everyone’s interest for us to continue operations.”

The creditor, Pender Capital Asset Based Lending Fund, asked the court to find Rucci’s company in contempt of court for violating an earlier settlement signed by Judge Jack Durkin between Rucci and Pender, requiring Rucci’s company to vacate the premises off of state Route 46 by Oct. 14.

The entry says Rucci and his company must contact the Ohio Department of Mental Health and Addiction Services with its plan to relocate the patients and must provide the agency with a plan for the relocation by Nov. 12. The plan also has to be filed with the court and delivered to Pender’s legal counsel by by Nov. 12.

The entry committed Rucci and his company to paying property taxes and other amounts totaling $30,000 by Tuesday, which he did, and to provide financial information to a receiver Judge Durkin appointed in the case Aug. 22. The receiver was appointed to “take possession and full control” over California Palms, according to court documents.

Rucci and his company also agree to pay costs and expenses incurred by Pender of $77,776 since Aug. 14, though a “discounted payment amount” will be considered.

Wednesday’s entry orders Rucci and his company not to increase the number of patients beyond the number there now, and it bans the company from “seeking to admit, recruit, treat, or agree to treat any new patients.”

The order says Rucci and his company agree that he failed to fully cooperate in providing complete and accurate financial information and other information regarding the property to the receiver.

And, it says Rucci and his company continued to operate the business and continued to admit patients following default of an earlier order.

Wednesday’s order says Rucci and his company admit that they accepted patients on or after Aug. 15, “knowing he could only provide treatment for 60 days or less and with significant uncertainty regarding resources that would be available to continue treatment,” such as “cash and presumably hired employees without a clear ability to pay obligations to those employees.”

The order says all revenue from California Palms’ operations shall be applied to carry out the order to vacate “and used strictly to protect the patients and relocate them.”

Rucci and his company are required to provide financial and other information to the receiver regarding income and expenses of California Palms to “independently confirm such income and expenses and the appropriateness of payment of any expenses.”

California Palms also agreed to pay $70,000 by Nov. 8 for the remainder of the facility’s rent for September and October, though an extension to Nov. 20 is possible, the entry says.



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