Health department challenges memory care receivership motion

FORT COLLINS — The Colorado Department of Public Health and Environment, in a response to a motion to reinstate the receivership of Fort Collins Memory Care, said the property is not at risk from water damage and that the memory care’s lender can’t operate the facility without a license.

The case involves an attempt by BRMK Lending Inc. to take control of the Aspens at Fort Collins facility operated by Fort Collins Memory Care. It asked Larimer County District Court to put the facility into a receivership, which the court did, but then when the health department intervened, the court reversed course.

BRMK has filed a motion for reconsideration, which prompted the state’s response.

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The health department, in a document filed on its behalf by the state Attorney General’s Office, said that BRMK failed to follow procedural rules that require a counsel to confer in good faith prior to filing a motion. “Emailing CDPHE at 3:12 p.m. and then filing the motion at 4:53 p.m. … does not constitute a ‘good faith’ conferral,” the department wrote.

The health department took issue with the notion of a receivership that would divert rental income from patients at the facility, income that would be needed to fulfill treatment and care requirements. 

“The order of distribution of income … places the welfare of the residents in a lower priority than the receiver’s interests,” the response said.

The department also said that the facility is not in imminent danger from a faulty fire sprinkler system. “The Division of Fire Prevention and Control inspected the fire suppression and alarm systems as recently as Feb. 20, 2024, and has not revoked FCMC Certificate of Compliance with Life Safety Code standards …,” the department said.

The filing also said that “the doctrine of separation of powers limits the scope of the court’s power to appoint a receiver over a licensed entity …” While it may be possible to thread the needle of a receivership in such a case, only the Department of Health can issue a license to operate such a facility, the filing said.

“Unless and until BRMK crafts a receivership order that cures these defects, the court should deny BRMK’s motion for reconsideration,” the department wrote.

A request for comment sent to the attorney for BRMK was not acknowledged prior to publication time.