Columbine, Wilson seek dismissal of North Shore bankruptcy, ownership of the property

LOVELAND — North Shore Associates LLP, the owner of the real estate that houses North Shore Manor nursing home in north Loveland, has until June 5 to file objections to a motion to dismiss the bankruptcy that has overshadowed the operation for more than a year.

A related bankruptcy involving North Shore Manor, the nursing home operating company, was dismissed last October and followed by lawsuits between majority shareholders of the nursing home and entities controlled by Robert Wilson and his Columbine Management Services family of companies.
A hearing on the motion to dismiss is scheduled for June 18 in federal Bankruptcy Court in Denver. When contacted Wednesday, Keri Riley, bankruptcy attorney for North Shore Associates, said she would see whether her clients wanted her to address the issues raised in the motion to dismiss.

In addition to the motion to dismiss from Wilson’s companies, the United States Trustee also moved to dismiss or convert to a Chapter 7 case because North Shore Associates had not filed its monthly operating statements in a timely manner, nor had it paid the trustee as required under bankruptcy law.

SPONSORED CONTENT

Water Wars: Thornton’s struggle and triumph in obtaining Pipeline Permits

Lyons Gaddis understands the complexities and challenges of water and real estate law. This case illustrates an important principle of building water projects: “It never gets easier.”

The motions to dismiss go to the heart of control of the real estate at 1365 W. 29th St. in Loveland.

North Shore Associates and North Shore Manor are related companies owned by the same parties. North Shore Manor pays $70,000 a month rent to Associates.

The North Shore Associates case was held in abeyance last year when minority shareholder Wilson succeeded in persuading the bankruptcy judge to order arbitration under the organization’s partnership agreement. Results of that arbitration have not been disclosed.

Wilson has claimed, and did so again Monday in his motion to dismiss, that North Shore Associates bankruptcy was not appropriately filed because a meeting of the partners was not held as required by the partnership agreement. Through his attorneys, he said the remedy for the financial shortcomings of the organization was to recapitalize as required under the partnership agreement. 

Control of both organizations has been at issue throughout the proceedings. Wilson had served as managing partner until the bankruptcy was filed, and he asserted again this week that he is still managing partner of the Associates. He controls 15% of the shares and has 27% of the voting rights, because some shareholders who inherited shares did not exercise their rights to perfect voting rights.

Control of the real estate could hang in the balance. When Wilson was managing the organization, he took out a loan with BOKF NA and used the real estate to secure it. Then, prior to the loan’s due date, he created a new company called Wapello Holdings LLC and bought out the loan including all its terms and conditions, which included a lien on the property. The debt now totals $2.2 million with interest building by the day.

The motion to dismiss seeks payment of all of North Shore Associates’ cash — $547,363 as of the April operating report — and, as noted in the filing, “Granting relief from stay does not displace the residents (of the nursing home). It simply means that the building will be lender-owned,” meaning owned by Wilson’s company Wapello Holdings.

The case is North Shore Associates LLP, Chapter 11 case number 23-10808 in U.S. Bankruptcy Court for the District of Colorado.