Proposed price for troubled Long Island nursing home: Just $10
An aerial view of Cold Spring Hills Center for Nursing & Rehabilitation in Woodbury, which court records show has a proposed sale price of $10 as the facility is embroiled in bankruptcy proceedings. Credit: Newsday/John Paraskevas
A deal to sell Long Island's second largest nursing home for just $10 will go before a judge Friday, with the owners of Cold Spring Hills Center for Nursing & Rehabilitation also planning to shift $72 million in mortgage debt to a new owner as the future of its more than 300 residents hangs in the balance.
The Woodbury facility has asked U.S. Bankruptcy Judge Sean H. Lane to approve Eliezer Jay Zelman, who owns three other nursing homes in the state, as a temporary receiver who would take over operations and payroll obligations before his purchase of the facility could be finalized months down the road.
Zelman, of Rockland County, would assume the $72 million building mortgage but pay only $10 to Bent Philipson, the facility’s primary owner, and his son, Avi Philipson, the business' managing member, for the property, a proposed agreement states.
Zelman wrote in a court filing last week he has "sufficient cash on hand to fund operating deficits at the facility."
An approval by Lane would represent only half the equation needed to ensure the 588-bed facility doesn't close its doors and relocate its residents — many elderly and disabled — to other long-term care centers.
Approvals from the New York State Health Department are also needed for the temporary receiver and sale deals to go through, attorneys for the nursing home said.
State health officials are expected to make a determination on the receivership application in the coming days, allowing Zelman to potentially take over operations, but likely will not rule on the sale for several months, according to Schuyler Carroll, an attorney for Cold Spring Hills. A health department spokeswoman declined to comment.
Last month, Cold Spring Hills announced plans to begin an "emergency evacuation" of residents days before Christmas and Hanukkah and to begin laying off its 500-person workforce.
On Dec. 20, Nassau State Supreme Court Justice Lisa Cairo issued a temporary restraining order that New York Attorney General Letitia James sought, blocking the nursing home from discharging or transferring its residents and ordering the facility to remain operational.
Days later, Cold Spring Hills, buried in more than $50 million in debt and struggling to meet its $1.4 million weekly payroll, filed for Chapter 11 bankruptcy protection from its creditors.
The nursing home told Lane in court this month it no longer was planning to move forward with the evacuation of its residents. But the company's federal bankruptcy filings leave open the possibility of the nursing home's closure if a receiver and buyer aren't approved.
Carroll said in an interview he's hopeful state health officials will green-light the receivership application before Friday's court proceeding.
"The reason we want the receivership is because they're going to bring in money, operate and start renovating, rather than losing hundreds of thousands of dollars every week," Carroll said. "We certainly believe it will put them in position to continue operating going forward."
Martin Cauz, Cold Spring Hills' chief restructuring officer, wrote in a Jan. 13 court filing the nursing home was losing an average of $350,000 every week.
"Any delay in appointment risks continued loss of value for the estate and creditors and safe care for residents of its facility," he added of a temporary receiver.
Carroll put it more bluntly in a Jan. 13 filing: "If the court declined to authorize the debtor to enter into and perform the agreement, or does not do so promptly, the debtor will have no alternative but to seek approval for the immediate closure of the facility in an orderly fashion."
James' office didn't respond to requests for comment on the receivership and sale applications.
A copy of the proposed sale agreement in court records shows Zelman's Woodbury Heights Rehabilitation Center Realty LLC would assume the property's mortgage, take over the nursing home's assets and continue paying its staff — providing employee benefits and making improvements to the facility. The records show the facility needs approximately $15 million in upgrades.
But Zelman has advised the Philipsons, Carroll wrote in a Jan. 20 court filing, that he won't buy the facility without a "modified collective bargaining agreement" with 1199SEIU United Healthcare Workers East, which represents most of its employees.
In Jan. 24 court paperwork, the union said it has discussed modifications to the bargaining agreement with Zelman but he wants "to eliminate all scheduled wage increases and drastically slash benefits," including adopting a more expensive employee-funded health insurance plan.
In addition, Zelman wants to remove positions from the bargaining unit, the union said, including registered nurses, physical therapists, physical therapy assistants, occupational therapists, certified occupational therapy assistants, respiratory therapists, respiratory technicians and dietitians.
Cold Spring Hills has been in financial peril for years, records show. In December 2022, a lawsuit from James' office charged that the nursing home neglected resident care and skirted state laws through a fraudulent business setup designed to enrich its owners.
In April, Cairo imposed a $2 million penalty as part of the lawsuit's resolution and appointed an independent health monitor for the facility.
A deal to sell Long Island's second largest nursing home for just $10 will go before a judge Friday, with the owners of Cold Spring Hills Center for Nursing & Rehabilitation also planning to shift $72 million in mortgage debt to a new owner as the future of its more than 300 residents hangs in the balance.
The Woodbury facility has asked U.S. Bankruptcy Judge Sean H. Lane to approve Eliezer Jay Zelman, who owns three other nursing homes in the state, as a temporary receiver who would take over operations and payroll obligations before his purchase of the facility could be finalized months down the road.
Zelman, of Rockland County, would assume the $72 million building mortgage but pay only $10 to Bent Philipson, the facility’s primary owner, and his son, Avi Philipson, the business' managing member, for the property, a proposed agreement states.
Zelman wrote in a court filing last week he has "sufficient cash on hand to fund operating deficits at the facility."
WHAT NEWSDAY FOUND
- Cold Spring Hills Center for Nursing & Rehabilitation wants the federal judge presiding over its bankruptcy case to approve a temporary receiver to operate the nursing home and the sale of the Woodbury property.
- Court records show Eliezer Jay Zelman, who runs several nursing homes in New York, would assume the facility's $72 million mortgage but pay only $10 for the building.
- The New York State Health Department still must approve both the receivership application and the property sale of Cold Spring Hills, Long Island's second largest nursing home.
An approval by Lane would represent only half the equation needed to ensure the 588-bed facility doesn't close its doors and relocate its residents — many elderly and disabled — to other long-term care centers.
Approvals from the New York State Health Department are also needed for the temporary receiver and sale deals to go through, attorneys for the nursing home said.
State health officials are expected to make a determination on the receivership application in the coming days, allowing Zelman to potentially take over operations, but likely will not rule on the sale for several months, according to Schuyler Carroll, an attorney for Cold Spring Hills. A health department spokeswoman declined to comment.
Last month, Cold Spring Hills announced plans to begin an "emergency evacuation" of residents days before Christmas and Hanukkah and to begin laying off its 500-person workforce.
On Dec. 20, Nassau State Supreme Court Justice Lisa Cairo issued a temporary restraining order that New York Attorney General Letitia James sought, blocking the nursing home from discharging or transferring its residents and ordering the facility to remain operational.
Days later, Cold Spring Hills, buried in more than $50 million in debt and struggling to meet its $1.4 million weekly payroll, filed for Chapter 11 bankruptcy protection from its creditors.
The nursing home told Lane in court this month it no longer was planning to move forward with the evacuation of its residents. But the company's federal bankruptcy filings leave open the possibility of the nursing home's closure if a receiver and buyer aren't approved.
Carroll said in an interview he's hopeful state health officials will green-light the receivership application before Friday's court proceeding.
"The reason we want the receivership is because they're going to bring in money, operate and start renovating, rather than losing hundreds of thousands of dollars every week," Carroll said. "We certainly believe it will put them in position to continue operating going forward."
Martin Cauz, Cold Spring Hills' chief restructuring officer, wrote in a Jan. 13 court filing the nursing home was losing an average of $350,000 every week.
"Any delay in appointment risks continued loss of value for the estate and creditors and safe care for residents of its facility," he added of a temporary receiver.
Carroll put it more bluntly in a Jan. 13 filing: "If the court declined to authorize the debtor to enter into and perform the agreement, or does not do so promptly, the debtor will have no alternative but to seek approval for the immediate closure of the facility in an orderly fashion."
James' office didn't respond to requests for comment on the receivership and sale applications.
A copy of the proposed sale agreement in court records shows Zelman's Woodbury Heights Rehabilitation Center Realty LLC would assume the property's mortgage, take over the nursing home's assets and continue paying its staff — providing employee benefits and making improvements to the facility. The records show the facility needs approximately $15 million in upgrades.
But Zelman has advised the Philipsons, Carroll wrote in a Jan. 20 court filing, that he won't buy the facility without a "modified collective bargaining agreement" with 1199SEIU United Healthcare Workers East, which represents most of its employees.
In Jan. 24 court paperwork, the union said it has discussed modifications to the bargaining agreement with Zelman but he wants "to eliminate all scheduled wage increases and drastically slash benefits," including adopting a more expensive employee-funded health insurance plan.
In addition, Zelman wants to remove positions from the bargaining unit, the union said, including registered nurses, physical therapists, physical therapy assistants, occupational therapists, certified occupational therapy assistants, respiratory therapists, respiratory technicians and dietitians.
Cold Spring Hills has been in financial peril for years, records show. In December 2022, a lawsuit from James' office charged that the nursing home neglected resident care and skirted state laws through a fraudulent business setup designed to enrich its owners.
In April, Cairo imposed a $2 million penalty as part of the lawsuit's resolution and appointed an independent health monitor for the facility.
Robert Brodsky is a breaking news reporter who has worked at Newsday since 2011. He is a Queens College and American University alum.
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