State, owner object to Cedar Haven sale proposed by trustee in bankruptcy case

The Pennsylvania Attorney General’s office on behalf of the Department of Human Services filed an objection Thursday to a proposed $27 million sale of Cedar Haven’s business and real estate to MDA Capital Group LLC.

Cedar Haven Acquisition LLC is operator of the 430-bed Cedar Haven Facility at 590 S. 5th Ave. in South Lebanon Township. The building and real estate are owned by 590 South 5th Avenue LLC.

590 South 5th Avenue LLC filed a lawsuit against Cedar Haven Acquisition LLC in October claiming it was owed $1,400,000 in overdue rent. The case paused in county court when Cedar Haven Acquisition LLC filed for Chapter 11 bankruptcy in federal court on Jan. 16.

At the time of the bankruptcy, Cedar Haven Acquisition LLC said it would pursue a sale.

On March 2, Cedar Haven Acquisition LLC entered a filing to the bankruptcy case stating that the firm’s court-appointed trustee Leon P. Haller had entered into an agreement with MDA Capital Group (MDA) to purchase the facility in a $27 million deal.

The filing says the real estate has been appraised for at least $27 million, and that the deal would allocate $100,000 of the $27 million purchase price towards the “assets of the debtor,” referring to personal property.

MDA is also known as the Priority Group, according to court documents, which state that an affiliate of the Priority Group had been hired earlier in the bankruptcy process by Cedar Haven’s court-appointed receiver to assist with management of the facility.

The filing says MDA intends to form a new and separate entity to own and operate the facility. The filing also states there is no relationship between Cedar Haven Acquisition LLC and MDA except that of proposed seller and buyer, as well as the aforementioned MDA affiliate providing management services for the facility.

The filing proposes to hold a bidding process in order to make sure MDA’s offer can’t be beat by another purchaser. A proposed requirement of the bidding process is that competing bids must be for all assets. The agreement with MDA also includes a breakup fee of $900,000 in the event that a higher and better offer is received for the sale of both the real estate and other assets. As such, Cedar Haven Acquisition LLC argues in the filing, the first competing bid must be at least $27.9 million.

MDA Capital Group is the same firm that had acquired StoneRidge Towne Centre last year, as identified in a January 2025 letter to StoneRidge residents identifying the new owners as Akiva Glatzer and David Gamzeh. That deal closed last fall, said StoneRidge Retirement Living president and CEO Steven J. Reiter in a phone interview Monday with LebTown.

A 2018 article by PennLive looked in-depth at Glatzer and Gamzeh’s operations and the management agreements held by Priority Healthcare Group. Glatzer and Gamzeh also received media coverage in Vermont during an attempted purchase of five facilities there.

Glatzer’s letter of intent to Arba Group’s Ira Smedra is included as an exhibit in the March 2 filing. Arba Group also has extensive history in the nursing home industry. According to a 2014 article by the Sacremento Bee, Smedra and business partner Jacob Wintner had ownership stakes at the time in 38 facilities in California.

On Thursday, the state Attorney General filed an objection on behalf of the state’s Department of Human Services, which is a party in interest in the bankruptcy case. The filing raises four separate objections, arguing that:

(i) the transferred assets are vaguely defined and of unknown value, and there is no support for the allocation of purchase price between debtor and non-debtor assets; (ii) any potential bidders interested in purchasing only the Debtor’s Assets may be chilled from the bidding process; (iii) the allocation of professional fees are not adequately bifurcated between the Real Property Sale and the Assets Sale; and, (iv) the Agreement does not make clear that the proposed sale does not include or guarantee the transfer of license from Debtor to purchaser, potentially circumventing the requirements of state laws and regulations for the licensing and operations of long-term care nursing facilities.

The state also objected to a proposed requirement that any competing bids must include the real estate, which is not owned by Cedar Haven Acquisition LLC, and says in its filing that the sale motion doesn’t make clear that any buyer may not close on the sale and assume operations until obtaining approval for all licenses.

Also objecting to the sale is Charles Blalack, who court documents previously indicated had sole or controlling interests in Cedar Haven Acquisition LLC as well as Stone Barn Holdings LLC, its parent company, and Fremont Lake LLC, previously its main lender until a Dec. 30 agreement where the loan was sold to the Arba Group.

The objection filed by Blalack and Stone Barn says that Blalack is owed approximately $195,000 on account of loans from before the bankruptcy petition and that Stone Barn is owed over $760,000 in management fees that were held back under Blalack’s direction. The filing argues that the sale procedures are “unacceptable and appear to be designed to benefit Arba rather than the debtor’s estate and creditors.”

The filing also argues that Cedar Haven Acquisition LLC, operating under control of the trustee, has not demonstrated that the proposed sale is required or a sound exercise of business judgement.

A filing Monday identified the new entity as “Cedar Haven Healthcare Center LLC.” Pennsylvania state department records show that the LLC was organized in January by David Gamzeh.

Cedar Haven Acquisition previously spent three years in Chapter 11 bankruptcy, between 2019 and 2022. The facility was owned by Lebanon County until 2014 when county commissioners voted 2-1 to sell the home to Complete HealthCare Resources. Questions later arose about the identity of the real purchaser and whether commissioners knew at the time of the sale. 590 South 5th Avenue LLC eventually became owner of the real estate, and Cedar Haven Acquisition became the facility’s licensed operator.