Atrium Health Post Acute Care and Atrium Senior Living, of Chetek, will be under new ownership, pending approval of a Wood County judge and the Wisconsin Department of Health Services.
Synergy Senior Care LLC has been named as the potential owner and operator, according to a press release from attorney Michael S. Polsky, who has been working on the case to secure a buyer for 29 Atrium facilities in the Midwest.
It was anticipated Synergy would take over operations shortly after Sunday, Dec. 1, for seven facilities: two Chetek facilities, as well as the Atrium facilities in Bloomer, Black River Falls and Oconto Falls.
North Shore Healthcare has been named as the potential new owner for the other 22 facilities. The transfers depend on approval by the Wood County Circuit Court and Synergy and North Shore obtaining the appropriate licenses from the state of Wisconsin, Polsky said.
Atrium Post Acute Care of Chetek would be renamed Meadowbrook at Chetek, according to staff who met with Synergy officials when they visited on Thursday, Nov. 7. Synergy’s chief executive officer, Slava Pukshansky, and chief operating officer, Mitul Lindemann.
“Synergy Senior Care LLC is excited to begin its operation of seven Atrium-Midwest care centers,” Lindemann said. “Synergy, based in Skokie, Ill., is a growing senior care operating group founded with the core belief that care comes first. Synergy is excited to have the opportunity to elevate the level of care provided in these seven Atrium-Midwest care centers and develop these locations as partners to both residents and local communities.”
Throughout the receivership case, Health Dimensions Group provided management services, oversight and financial and operational consultation to Polsky.
“I am delighted that we have secured a sound owner and operator for the remaining seven Atrium-Midwest care centers,” Polsky said in a press release. “Health Dimensions Group and the care center staff have done an excellent job in improving care and services to residents and stabilizing operations during the receivership. All entities are working collaboratively to ensure a successful transition of the remaining seven Atrium-Midwest operations to Synergy.”
Details about the transfer—such as the purchase price or any commitments by Synergy to current employees—were not immediately known.
Complicated court case
The process to find a new owner started when a receivership case was filed in Wood County Circuit Court on Sept. 7, 2018. A receivership is a form of bankruptcy lawsuit that allows a business to operate under a third party—a receiver—while debts are settled and often, the business is sold.
Polsky, of Beck, Chaet, Bamberger & Polsky, S.C., in Milwaukee, was appointed by Judge Nicholas Brazeau Jr. as the receiver. Polsky appointed Health Dimensions Group to oversee the day-to-day operations of 33 Atrium facilities.
At the start of the lawsuit in September 2018, the Atrium entities owed its major lenders, MidCap Funding IV Trust and MidCap Funding VII Trust more than $13.5 million.
According to federal court documents, Kevin Breslin purchased 22 Atrium companies from the former owner, Larry Rice and his family, in 2014. MidCap financed the transaction and provided a line of operating credit. The former city-owned Knapp Haven nursing home and Pelican Place assisted living were sold to Atrium in April 2016.
Also according to court documents, between 2015 and 2018, Breslin siphoned off $11.8 million from the companies for his own benefit.
“As a result of Breslin’s conduct, the operations of several facilities fell into severe financial distress,” where utilities were under threat of being shut off, food deliveries were in jeopardy and there was no health coverage for employees, court records stated.
Polsky, an experienced corporate bankruptcy attorney, stated that the Atrium companies were the most at-risk companies he’d ever seen. His receivership was losing about $1 million per month in operating costs, not including rent. He said Atrium leaders were subject of state and federal criminal investigations.
Other cases, involving state-level appeals and civil cases in federal court were filed throughout 2019.
In January 2019, four nursing homes were abruptly closed in Appleton, Weston, Chilton and Neenah, according to published reports from the Wausau Daily Herald. Polsky said this was due to MidCap cutting of funding for these facilities. The Department of Health Services said the closures did not give the proper advance notice, put residents at risk and violated state law. Those four remain for sale.
The other 22 Atrium facilities will be transferred to Northshore Healthcare, based in Glendale.