The Philly Inquirer reported that three unsecured creditors (Healthcare Services Group Inc., McKesson Medical-Surgical Minnesota Supply Inc., and Medline Industries) have filed an involuntary bankruptcy petition against New Castle Health and Rehabilitation Center nursing home that is part of a chain of 22 facilities, mostly in Pennsylvania, that were put into receivership in September by their landlord.

The creditors said in their Jan. 12 petition that New Castle Health and Rehabilitation Center owed them a total of $262,529.

The owner of the New Castle nursing home is Oak Health & Rehabilitation Centers Inc., a nonprofit headed by Bala Cynwyd lawyer Howard Jaffe. Oak was formed to take over 22 former Extendicare facilities, including 20 in Pennsylvania and one in West Virginia, in additional to the New Castle facility, in 2015.

 The landlords of the Oak facilities, affiliates of Formation Capital, a major player nationally in nursing-home ownership, put all 22 Oak facilities in receivership, a state court alternative to bankruptcy that provides no protection for unsecured creditors, after Oak missed at least three rent payments totaling $10.5 million.

The goal of the receivership was to bring in a new operator for the nursing home with no guarantee of money for vendors’ unpaid bills.


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