Receiver appointed for Loveland nursing home

LOVELAND — A Larimer County District Court judge has appointed a receiver for North Shore Manor nursing home who will oversee the building until it can be sold at a foreclosure sale this fall.

In an email to BizWest, attorney John O’Brien of the Denver law firm Spencer Fane LLP wrote that “Columbine Health Systems is pleased that on August 21, 2024, the Larimer County District Court appointed a receiver for North Shore Manor’s building to collect the delinquent rent and preserve the building. The building’s tenant will continue to be responsible for resident care, healthcare, and medical records on-site.”

In a filing on July 3, Wapello Holdings LLC asked the court to approve “ex parte” appointment of a receiver. An ex parte decision is one decided by a judge without requiring all of the parties to the dispute to be present. 

That request followed a ruling a week earlier by the U.S. Bankruptcy Court in Denver that dismissed a Chapter 11 bankruptcy filing by North Shore Associates LLP, owner of the property on which the North Shore Manor nursing home operates, allowing foreclosure to begin on the building. In that order, U.S. Bankruptcy Court Judge Joseph G. Rosania Jr. denied a motion to turn over cash collateral that had been filed by Wapello Holdings and J. Robert Wilson, who owns nursing home operator Columbine Management Services Inc. and 15% of North Shore Associates.

North Shore Associates filed a strongly worded brief opposing appointment of a receiver, calling Wilson a “rogue insider” who wants “to seize for himself” more than $10 million in equity from the property it owns. However, Larimer District Judge Stephen J. Jouard appointed the receiver in the Aug. 21 order.

The court order named the receiver who had been appointed, but BizWest was unable to contact him or determine his affiliation, a necessary reporting detail that would differentiate him from other people with the same name, and calls to O’Brien were not returned.

In seeking the appointment of a receiver, Wapello had said it was not requesting that the receiver “hold any responsibility for, or authority over the health-care services that [North Shore Manor] provides to residents, the medical records located on the real property collateral, or any of the business equipment owned by” the nursing home.

Wapello claims it is owed more than $2.3 million from a loan North Shore Associates took out in 2016 but went into default on March 7, the day after North Shore filed for bankruptcy.

When Wilson was managing North Shore Associates, he took out a loan for nearly $2.5 million with BOKF NA, doing business as Bank of Oklahoma, in 2016 and used the real estate to secure it. Then, prior to the loan’s due date, he created Wapello Holdings LLC and bought out the loan, including all its terms and conditions, which included a lien on the property. 

North Shore Associates and Columbine Management Services Inc. have battled for more than a year, both in bankruptcy court and in Larimer County District Court, over control of the nursing home at 1365 N. 29th St. in Loveland. 

Majority owners, who have 85% of the shares, claim that Wilson improperly used his control as managing partner to divert money from the organization by overcharging for supplies and services. Wilson sought payment for those supplies and services. North Shore Associates had asked the bankruptcy court to deny the trustee’s motion to dismiss the bankruptcy.

Wapello supported the trustee’s motion to dismiss and sought payment of all of North Shore Associates’ cash.

The court order signed by Jouard specified that the receiver would not be responsible for managing North Shore Associates’ business affairs, “investigating, prosecuting or defending potential claims against NSA’s officers, directors shareholders or employees; evaluating whether or not NSA should file or continue in a bankruptcy, filing any tax returns or reports, including any federal, state, or local tax returns, sales or use tax returns, or workman’s compensation reports or for paying, processing, investigating, or defending against any unsecured claims occurring or incurred prior to his appointment or claims or bills incurred by NSA; or for investigating or participating (as a plaintiff, defendant, or otherwise) in any equity holder litigation involving NSA and/or its current or former officers, directors, shareholders or employers or interfering with Wapello’s foreclosure of the Real Property Collateral or for defending against any foreclosure of the Real Property Collateral or the Rents.”

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 Wilson and his Columbine Management Services family of companies.

The case is: Wapello Holdings LLC v. North Shore Associates LLP, Chapter 11 in Larimer County District Court, case number 2024 CV 30569.