News Feature

Originally published in Castine Patriot, December 15, 2016
Northern Bay Residential Living Center to close
Court rules to end state receivership, sell all bed rights

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Northern Bay Residential Living Center to close

The Northern Bay Residential Living Center and the closed Penobscot Nursing Home, which shared its facility, will close, states a December 6 court ruling.

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by Anne Berleant

Northern Bay Residential Living Center and Penobscot Nursing Home have been legally determined to not be financially viable, and may be closed, Judge Michaela Murphy of the Business and Consumer Court in Bangor ordered in a December 5 decision. The decision ends eight years of legal maneuvering by the Department of Health and Human Services, which were named receivers of the facility in 2008.

In her order, Judge Murphy granted DHHS and the State of Maine’s motion to terminate its state-appointed receivership. The owner, ELRCare, has until January 15 to sell the facilities, before the 54 nursing home bed rights and 42 residential bed rights may be sold. The court stipulated that the residential bed rights may not be sold until the residents have been relocated, while the nursing home beds may immediately go on the market.

In 2014, DHHS successfully petitioned to close the Penobscot Nursing Home because of alleged violations, but the residential living facility remained in operation.

Penobscot Selectman Chairman Paul Bowen said the facility had been “trying to find a buyer for some time,” and is surprised the court ruling didn’t come sooner. Selectmen voted to waive the town’s 30 day period to exercise their intervener status on December 6.

However, Bowen did say the town is concerned with back taxes owed on the property, held in the name of Sifwat Real Estate LLC. The 2015 Penobscot Town Report lists a 2014 tax lien on the property for unpaid taxes in the amount $11,943, and $11,773 in unpaid 2015 taxes.

The court order stipulates that proceeds from the sale of bed rights will be used for relocation expenses for residents, and for receivership operation expenses. The remainder, if any, will be placed in a reserve account pending a court decision on its distribution.

The Penobscot Nursing Home has a long court history, beginning in 2006 when it was purchased by Sifwat Ali, owner of ELRCare, from Wendell Dennison (d/b/a Betlins Corporation) in a private sale for $1.7 million. In 2008, the facilities were placed in court-appointed receivership, along with seven other facilities owned by ELRCare, because of alleged financial mismanagement. Mortgage payments from Ali to Dennison had stopped in 2008, Dennison told Penobscot Bay Press in 2012.

A receivership is a court-ordered status, and is usually short-term, to allow an owner to resolve financial issues. DHHS tried to sell the nursing home bed rights in 2012, but the court intervened and also granted the towns of Penobscot and Blue Hill legal intervener status, allowing them to participate in future negotiations.

Like the town of Penobscot, Blue Hill has opted not to exercise its intervener status in the current court proceeding, Selectman Jim Schatz said.

“We had told our attorney that we have no plans to do it,” Schatz told Penobscot Bay Press.

In 2012, the receivership was moved from State Superior Court in Kennebec to the Business and Consumer Court in Bangor. When ELR Care’s owner Sifwat Ali died in December 2015, silent partners stepped forward, according to court documents. Settlement conferences filled the case docket for much of 2016, culminating in the December 5 court order granting the motion to immediately close the facility.

Residents have been notified of the court ruling, and the court order states they may relocate themselves at any time.