Legal & Courts  February 7, 2024

Additional lawsuit filed in North Shore Manor dispute

LOVELAND — Vendor companies affiliated with Columbine Management Services Inc. have filed a lawsuit, another in a series of legal proceedings involving Columbine and North Shore Manor Inc., in order to collect on unpaid bills.

The lawsuit, filed Monday in Larimer County District Court, alleges that North Shore owes a total of $410,827 to multiple vendor companies controlled by Columbine that provided the Loveland nursing home with supplies and services prior to its bankruptcy last year.

Christopher Carrington, attorney for North Shore, had not seen the latest lawsuit and was unable to respond to it.

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That bankruptcy action was dismissed at the request of North Shore, but during bankruptcy proceedings and in a subsequent lawsuit that it filed against Columbine and its owner, Robert Wilson, North Shore contended that “intentional and deliberate acts of self-dealing, theft and deception by J. Robert Wilson … and his related entities” resulted in overpriced materials and services supplied to the nursing home, along with other allegations.

Columbine, however, alleged in the most-recent lawsuit that the vendors are entitled to payment for things that they supplied, and that in the proposed bankruptcy reorganization plan that North Shore proposed to pay for 59% of the amount it owed. 

The action seeks a jury trial, payment for what the vendors are owed, plus attorney fees.

The most-recent lawsuit is not the only attempt at collections that Columbine has filed against North Shore.

In a motion filed Jan. 19, Wilson, Columbine and another of Wilson’s companies, Wapello Holdings LLC, sought the court’s help in collecting on an unpaid note that totaled at the end of December at $2.1 million.

The note was arranged in 2016 by Wilson when he was managing partner of North Shore and originally held by the Bank of Oklahoma. It was to be due on March 7, 2023, but on March 6, North Shore filed for bankruptcy protection. The majority owners of North Shore didn’t know at the time that Wilson had formed Wapello in Feb. 21, 2023, in order to purchase the note, according to North Shore’s responses. It wasn’t until April 17, 2023, that Wilson disclosed in a bankruptcy court filing that Wapello was now the holder of the note. 

Wilson personally and North Shore under Wilson’s direction had guaranteed the original note, and those guarantees transferred to Wapello when it took over the debt. The note was secured by the real estate owned by North Shore Associates Inc., a related company. It also permitted the note holder to intercept rent payments if the note went into default.

On Jan. 26, North Shore in a reply to Columbine’s counterclaims said that “Wapello is not a holder in due course of the purported promissory note” and that “defendants claims are barred in whole or in part by fraud.”

“Defendants’ own tortious interference with and other wrongful conduct associated with the alleged contracts” with Bank of Oklahoma are at issue in the dispute.

North Shore claimed “breaches of fiduciary duty” in its response, in reference to Wilson’s role as managing partner of the organization prior to the bankruptcy when the loan was taken out.

“In sum, the holder of the 2016 BOK loan at the time of any default would have tremendous leverage over both NSA (North Shore Associates) and North Shore (Manor) insofar as any such holder, be it the bank or an assignee, would enjoy 18% default interest, could foreclose on NSA’s otherwise unencumbered real property, could potentially intercept North Shore’s rent payments to NSA such that NSA would have no income with which to service the 2016 BOK loan, and would have rights in the real property superior to North Shore’s right to possession as tenant,” the North Shore response said.

North Shore, in a related motion also filed on Jan. 26, asked the court to strike part of Columbine’s Jan. 5 answer, counterclaim and jury demand.

Columbine’s document began with what it called a “preamble,” which North Shore characterized as “a device for which no procedural mechanism exists under Colorado Rules of Civil Procedure.”

North Shore took issue with the first sentence of that preamble, which “claims that the bankruptcy judge in the North Shore bankruptcy case ‘admonished NSM and its counsel and threatened to dismiss NSM’s bankruptcy … for trying to extort $10,000,000 from Bob.’”

North Shore said that statement was “entirely untrue and demonstrably false and defendants and their counsel knew it was false.” It was an attempt to prejudice the judge and public against North Shore, the motion said, and the remainder of Columbine’s counterclaim makes no claim of extortion.

North Shore’s motion to strike details conversations and email exchanges that North Shore had with Columbine’s attorney over the source of the allegation. The attorney pointed to an Oct. 3, 2023, bankruptcy hearing, but the transcript of that proceeding makes no reference to extortion. The counsel was unable to direct North Shore to any other proceeding where such a statement was made, North Shore said.

In a related case, North Shore Associates, the owners of the real estate that houses North Shore Manor, reported to the bankruptcy judge — the North Shore Manor bankruptcy was dismissed but the North Shore Associates bankruptcy is still active but held in abeyance — that NSA and Wilson remained in arbitration, as ordered by the court. Arbitration commenced Sept. 19, 2023, but no “judgment, determination or other decision” has been issued, NSA said in its status update.

NSA is receiving monthly rent from North Shore Manor, the status report said.

The cases are:

Centre Elderly Transportation Inc., et al, versus North Shore Manor Inc., case number 2024cv30100 filed in Larimer County District Court on Feb. 5, 2024.

North Shore Manor Inc. versus J. Robert Wilson, Columbine Management Services Inc., and Wapello Holdings LLC, case number 2023cv30883, filed Nov. 27, 2023, in Larimer County District Court.

North Shore Associates LLP, case number 23-10808, filed in U.S. Bankruptcy Court for the District of Colorado, March 7, 2023.

Vendor companies affiliated with Columbine Management Services Inc. have filed a lawsuit, another in a series of legal proceedings involving Columbine and North Shore Manor Inc., in order to collect on unpaid bills.

Ken Amundson
Ken Amundson is managing editor of BizWest. He has lived in Loveland and reported on issues in the region since 1987. Prior to Colorado, he reported and edited for news organizations in Minnesota and Iowa. He's a parent of two and grandparent of four, all of whom make their homes on the Front Range. A news junkie at heart, he also enjoys competitive sports, especially the Rapids.
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