A Delaware Bankruptcy Court has tentatively approved the transfer of the day-to-day operation of Cedar Haven, the former county home, along with most of its non-real estate assets, to New Jersey-based personal care home operator Allaire Health Services, LLC.
Under the agreement, Allaire will pay $1,000,000 to buy the tangible assets used to operate Cedar Haven, including furniture, equipment, supplies, vehicles, tools, phones, and computers.
The $1,000,000 payment will not go to CHALLC’s owners. Instead, it will be held by the bankruptcy trustee and used to pay CHALLC’s creditors.
Allaire will assume responsibility for contracts with suppliers, resident agreements, and government permits and licenses needed to operate.
Allaire will also take over CHALLC’s lease for the Cedar Haven building and real estate, which have been owned by 590 South 5th Avenue, LLC., since the county sold the home in 2014.
The sale and transfer of operations is subject to a number of contract conditions, approval by the Pennsylvania Department of Health, and the issuance of an operating license to Allaire. It cannot be completed (“closed”) until those conditions are satisfied.
The Asset Purchase Agreement does not state a specific or estimated closing date.
If the deal goes through, Cedar Haven would no longer be involved in the CHALLC bankruptcy proceedings.
Allaire was founded by CEO Benjamin Kurland in 2015. The company currently operates two facilities in New Jersey, a Morris County facility, Morris View Health Center, and a Monmouth County facility, now called Allaire Rehab and Nursing. It also operates Grandview Nursing and Rehabilitation in Danville, Pennsylvania.
“At the end of the day, good care is good business,” Kurlan had told the Morris County freeholders in 2017 when presenting his company’s plan for Morris View.
Morris View Healthcare has had no serious deficiencies in the time since Allaire acquired it, according to a ProPublica database of U.S. Centers for Medicare and Medicaid Services deficiency reports. The same goes for Grandview and Allaire Rehab and Nursing.
According to Medicare.gov, Allaire Rehab & Nursing and Grandview have a two of five stars, or a “below average,” health inspections rating. Morris View has a three of five stars, or an “average,” health inspections rating. For context, Cedar Haven has a four of five stars, or “above average,” rating in the same database.
Allaire also bid to acquire Berks Heim, the Berks County home, in 2018, but the county commissioners ultimately decided not to sell it.
What happens to employees?
The Asset Purchase Agreement does not guarantee that current employees will have a job with Allaire, and says that “[CHALLC] shall, as of the [transfer date,] terminate the employment of all Facility Employees.”
But, the agreement goes on to say that “[Allaire] shall offer to hire at least a number of Facility Employees sufficient not to trigger notice requirements under the WARN Laws.”
WARN, the Worker Adjustment and Retraining Notification Act, is a federal law requiring most employers with 100 or more employees to provide 60 days advance notification of “mass layoffs,” usually more than 50 employees.
Allaire would also be required to provide group health insurance to any former CHALLC employee it hires, if that employee had similar coverage through CHALLC.
UPDATE: This story was updated at 8:10 a.m. to clarify that the $1,000,000 payment will be held by the bankruptcy trustee, and will not go to CHALLC’s owners.
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Davis Shaver contributed reporting to this article.