Attorney general seeks to vacate memory care receivership

FORT COLLINS — Colorado’s attorney general has intervened in the receivership case involving Fort Collins Memory Care, which does business as Aspens at Fort Collins.

Attorney General Phil Weiser has asked the court in a motion filed March 5 to vacate the emergency receivership that it approved Feb. 7 without a hearing. Weiser said in his motion that the appointed receiver, Gregg Williams, is not a licensed operator of a memory care facility, failed to apply for a license and failed to notify the state of the change of operating control, as required by law.

Licenses to operate memory care facilities in Colorado are not transferable and thus Williams cannot operate under the previous operator’s license, the motion said. Weiser also said that actions the receiver has taken also violate the judge’s receivership order, which required him to be in compliance with state licensing laws. Violation of the state law is a misdemeanor, subject to daily fines of up to $500.

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Weiser asked the court for an expedited ruling on the matter given the sensitive nature of the residents of the 64-bed facility. The judge had already set a March 15 status conference on the case.

Weiser said that BRMK Lending, the New York-based entity also known as Broadmark Realty Capital Inc. (NYSE: BRMK) that originally sought to force Fort Collins Memory Care into receivership, “has approached this receivership action as a financial transaction, failing to request in its order provisions recognizing that the receivership affects the health, safety and welfare of vulnerable residents and their home.”

BRMK had told the court prior to the Feb. 7 order that the facility was in imminent danger of being damaged by a sprinkler system malfunction, something that Fort Collins Memory Care has denied. Fort Collins Memory Care has said, and repeated in its answer to the action filed March 4, that it “specifically denies such property is in danger of being materially injured or impaired due to the need for immediate repairs to the fire sprinkler system.”

Fort Collins Memory Care also said that prior to the receivership order it had reached an agreement with BRMK to extend its loan through June 1 and had also made arrangements to refinance the loan through local lenders.

Peter Murphy, attorney with Markus Williams, Young and Hunsicker LLC representing BRMK, did not return a call seeking comment on the latest motion.

Noah Drever, CEO of Fort Collins Memory Care, when contacted by BizWest said that his company stands ready to operate the facility in the best interests of the residents if the court permits it to do so.  

“We are aligned with CDPHE (Colorado Department of Public Health and Environment) to do what’s best for our residents,” he said.

BRMK was absorbed by Ready Capital Corp. (NYSE: RC) May 31, 2023. Drever said Ready Capital cut off communications with Fort Collins Memory Care two weeks before filing for the receivership. “We understand that Ready Capital is not a senior housing lender,” he said.

The case is BRMK Lending LLC v. Fort Collins Memory Care LLC, case number 24cv300980, filed in Larimer County District Court.