A federal bankruptcy judge has approved the $53 million sale of nine Pennsylvania nursing homes to Kadima Healthcare Group, with some strings attached.
Under the terms of the sale approved Monday in the US Bankruptcy Court for the Western District of Pennsylvania, the former owners or officers of the bankrupt company, Comprehensive Healthcare Management Services, will not be allowed to have an ownership stake in the new company.
“The transaction documents do not provide for the transfer, or the promise to transfer, any of the purchased assets or other assets, or other assets of the debtors’ bankruptcy estates to any insiders, affiliates, officers or members of the debtors, including but not limited to Ephram ‘Mordy’ Lahasky,” US Bankruptcy Judge Calota M. Bohm, wrote in her ruling approving the sale.
The US Department of Labor had attempted to block the sale because Lahasky has a partial ownership stake in Kadima. As part of his sale, he would be required to sell his ownership stake in the new company.
Lahasky-owned companies have faced other allegations of misconduct in other jurisdictions, including a civil lawsuit by the New York Attorney General’s Office for alleged misuse of $18.6 million in Medicare and Medicare funds at a New York nursing home.
The owners of Comprehensive Healthcare Management Services are facing a $36 million judgment for allegedly failing to pay overtime and other payroll violations to company employees. The Department of Labor brought the action against the defendants under the Fair Labor Standards Act.
Under the sale to Kadima, the new owners will not be required to pay the judgment for the alleged payroll violations. The judge wrote in her ruling that the buyers and new operators shall have no liability or obligation for any defaults, acts of omission, breeches or claims that occurred prior to the closing date.
The Department of Labor has indicated it would continue to pursue other action to recover the $36 million judgment against the former owners.
