Epic Rehabilitation and Nursing in White Plains filed for bankruptcy citing “predatory actions” by its owner as the nursing home’s inducement to seek Chapter 11 protection.
Epic declared $ 8.7 million in assets and 18.2 million in debt in a November 1 petition filed in U.S. bankruptcy court, White Plains. Over $ 16.4 million in liabilities are unsecured loans from affiliates and owners.
Epic says it was forced to file a lawsuit because of the excessive damages claimed by its landlord in an ongoing lawsuit, “and in order to avoid the threat of abrupt termination of its lease and its ability to provide care and services to its patients “.
The 160-bed nursing home at Church Street and Barker Avenue in downtown White Plains opened in 2019, more than two years late and $ 5 million over budget, according to Epic. It employs around 250 people and has around 120 patients.
It was funded and built by White Plains Healthcare Properties I, a subsidiary of The Congress Companies, of Peabody, Massachusetts. The affiliate owns and owns the building.
Last year, the owner sued Epic in Westchester Supreme Court for $ 84 million, claiming the nursing home had broken the lease.
Epic CEO Lizer Jozefovic called the charges frivolous, in an affidavit filed with the Wisconsin Bankruptcy petition. Epic, he said, made all the rent payments, totaling $ 10.5 million.
The problem, according to Jozefovic, is that the homeowner defaulted on a $ 38.5 million loan from Security Benefit Life Insurance Co. which was used to refinance the mortgage, pay for the construction and equip the retirement home.
Last May, Security Benefit filed a foreclosure action against the homeowner for alleged default on loan payments. Epic has not been named as the accused.
Now, says Jozefovic, the owner owes around $ 42 million to the security delivery.
The owner “is seeking to pull out of the deal because it is now in default with its creditors,” Epic said in a Nov. 1 press release. “To avoid their problems, this landlord uses predatory legal tactics against us. ”
William A. Nicholson, CEO of The Congress Companies, did not respond to an email asking for his side of the story.
By filing for bankruptcy, the owner’s pending lawsuit against Epic was automatically suspended.
Jozefovic has said he wants to exercise a lease option to buy the property for $ 65.1 million, use bankruptcy to resolve disputes and secure financing to pay bills as they fall due.
The White Plains retirement home is part of Epic Healthcare Management, based in Croton-on-Hudson. The company operates retirement homes from New York to Florida, including six in the Hudson Valley that are owned directly or indirectly by Jozefovic and Mark Neuman, the chief financial officer.
Manhattan attorney Tracy L. Klestadt represents Epic in the bankruptcy case.