A federal bankruptcy court judge on Thursday approved a motion to proceed with the sale of Cedar Haven Healthcare Center in Lebanon, with a major change in the originally proposed sale procedure now allowing the business and real estate to be sold separately.
Middle District Court Judge Henry W. Van Eck agreed to the 68-page document that sets the terms for the proposed sale to move forward during a hearing in his Harrisburg-based bankruptcy courtroom.
Van Eck set a final bid submission date of April 29 from prospective buyers seeking to purchase the personal property of Cedar Haven Acquisition LLC, the debtor, an auction date of May 1, and a court date of Tuesday, May 5, at 1 p.m. to review and approve or reject the proposed sale.
He said all information and answers to questions posed by any prospective buyer will be posted to an online portal to ensure fair and equal access to data concerning the sale, and is concerned that the transaction involves the fair market value of the entity to be sold.
Item No. 2 as expressed by the court in the order notes that “The Sale Procedures are reasonably designed to maximize the value to be achieved for the Debtor’s Assets.”
Attorney Bob Chernicoff, special counsel for the bankruptcy trustee, said there were about a dozen prospective buyers, with nine still showing interest. But whether the sale will proceed without objections being filed is still uncertain.
A bankruptcy trustee is appointed by the court to ensure that there’s an accounting of all assets of the debtor.
The latest filing differs from the originally proposed sale procedures by permitting the business and real estate to be sold separately, while still valuing the business at $100,000.
A draft of the operations transfer agreement to be used in a sale of the business states that the existing lease of the facility would be terminated upon closing of a purchase agreement, meaning that any new buyer would need to immediately renegotiate lease of the property which the bankruptcy trustee previously valued at just shy of $27 million.
Earlier this month, LebTown reported 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. MDA is also known as the Priority Group, according to court documents. 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.
As reported by PennLive in 2018, some private equity nursing home operators have transitioned into being landlords instead. An editor at Senior Care investor was quoted by PennLive as saying that this model means that a firm “could still profit from its homes while insulating itself from lawsuits and other headaches involved in day-to-day operation.” Critics say that the leases can sometimes require unusual clauses like buying certain amounts of goods and services from its subsidiaries.
Attorney Mark Felger, representing Cedar Haven Acquisition and owner Charles Blalack, said the $100,000 sales price, as set by the bankruptcy trustee, would cause him to file an objection on behalf of his client if the bids fail to achieve fair market value.
Chernicoff responded, saying there isn’t “a whole lot of value in the nursing home business, especially in one that’s lost $6 million in four years” and that many within that industry are unhealthy financially.
He also noted that he believed both the business and real estate should be sold together, adding “we’ll see what the market has to say.”
The order is the latest in an effort, following the filing for bankruptcy in January, to sell the healthcare center.
The bankruptcy filing on Friday, Jan. 16, had been anticipated since a hearing earlier in January when attorneys for Cedar Haven Acquisition LLC reached an agreement with attorneys for 590 South 5th Avenue LLC, owner of the building and real estate, and the Pennsylvania Department of Human Services (DHS), the skilled nursing home’s largest creditor, to keep Cedar Haven open past Jan. 31 and preserve DHS’s rights, but allow for a sale coupled with a Chapter 11 bankruptcy that would keep the facility open.
590 South 5th Avenue LLC had filed a lawsuit against Cedar Haven Acquisition LLC in October claiming it was owed $1.4 million in overdue rent.
As allowed by the lease agreement, a receiver was appointed by Lebanon County Judge Charles Jones on Oct. 30. Receivership allows an outside party to take over a company’s operations, including dealing with creditors and, if justified, looking for a buyer and filing for bankruptcy.
LebTown previously reported in January at the time of the bankruptcy filing that Cedar Haven has 320 employees.
Questions about this story? Suggestions for a future LebTown article? Reach our newsroom using this contact form and we’ll do our best to get back to you.
Be part of Lebanon County’s story.
Cancel anytime.
Monthly Subscription
🌟 Annual Subscription
- Still no paywall!
- Fewer ads
- Exclusive events and emails
- All monthly benefits
- Most popular option
- Make a bigger impact
Already a member? Log in here to hide these messages
You know us because we live here too. LebTown’s credibility comes from showing up, listening, and reporting on Lebanon County with care and accuracy. Support your neighbors in the newsroom with a monthly or annual membership, or make a one-time contribution. Cancel anytime.
