Nursing home emerges from receivership as majority owners pay off debt

LOVELAND — Its debt paid and a court-appointed receiver discharged, a 120-bed Loveland nursing home once again is operating with more certainty about its future.

North Shore Manor, 1365 W. 29th St., is now operating independently of Lakewood-based Vivage Senior Living, an employee of the nursing home told BizWest, although director Lynn Stockwell did not return calls seeking comment.

However, the nursing home’s attorney, Christopher Carrington of Denver-based Richards Carrington LLC, said “we’re getting back to allowing Lynn and her staff to take care of our residents. They have a great team over there, North Shore Manor takes patients a lot of nursing homes reject. It serves a unique need.”

North Shore Associates LLP, owner of the property on which the nursing home sits, had battled for control of the nursing home for more than a year with Wapello Holdings LLC and J. Robert Wilson, who owns nursing home operator Columbine Management Services Inc. and 15% of North Shore Associates. The majority owners, who have 85% of the shares, claimed 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.

A U.S. Bankruptcy Court in Denver this summer dismissed a Chapter 11 bankruptcy filing by North Shore Associates, 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 Wilson. In August, a Larimer District Court judge appointed a receiver for North Shore Manor who would oversee the building until it could be sold at a foreclosure sale this fall.

However, on Sept. 16, the majority owners filed a motion in district court calling for dismissal of the receiver, informing Larimer District Court that they had “tendered to Plaintiff (Wapello Holdings) two cashiers’ checks … for the complete payoff sum of $2,980,205.96 set forth in Plaintiff’s written payoff demand.”

Larimer District Judge Stephen Jouard granted the motion five hours later, writing that because North Shore Associates had satisfied the debt, “the purpose for which the Receiver was appointed has been fulfilled, and Plaintiff has no continuing right to a Receivership over Defendant’s real property or rents.”

Wilson filed a motion to reverse that order on Sept. 17, contending that it had been issued without giving Wapello a chance to review it or file a response. In fact, its motion said, North Shore Associates “has not satisfied all of the Obligations of the Note or all of the Obligations secured by the Deed of Trust and Assignment of Rents at issue in this case. Further, the Defendant made a ‘conditional’ tender of a short payoff. Wapello has not accepted the conditional tender.”

Jouard denied Wapello’s motion three days later, writing that “the court concludes the tender constitutes sufficient and substantial performance under the terms of the note and loan documents that a receiver is no longer necessary. Moreover, the duties authorized and ongoing fees, costs, and service regarding the receiver are no longer warranted or necessary.”

Noting that “the health and well-being of the residents of North Shore Manor Inc. allegedly have been and continue to be at risk as various parties and persons have alleged, argued, and testified by way of affidavit based upon the continuing litigation between the parties,” Jouard ordered all parties to appear at a status conference to discuss “what meaningful issues remain.”

The judge admonished both sides to show proper decorum at that conference, reflecting how heated the dispute had become..

Representing the nursing home itself, Carrington had filed a motion seeking a restraining order against receiver Scott Shuman, claiming that he was “working closely with Wapello to intimidate and inflict harm upon North Shore until the owner of the real property, defendant North Shore Associates … not only pays Wapello’s debt but also pays Wapello’s demand for a staggering amount of attorneys’ fees, an amount that Wapello claims changes every day, a moving target, with the promise that the Receiver’s sharp tactics will not stop until fees are paid in full. Via the harassment of North Shore staff and the termination of North Shore’s lease, Wapello and the Receiver are putting the squeeze on North Shore until NSA meets their demands. This places North Shore in an untenable position.”

Carrington wrote that “this litigation has spiraled out of control such that North Shore (the tenant operating a nursing home at the at-issue real property) its staff, and its residents, which consist of more than 80 vulnerable, at-risk individuals, are now suffering immediate and irreparable harm. For that reason, North Shore is taking the extraordinary step of filing into this case, to which it is otherwise not a party, and seeking this Court’s immediate assistance and protection.”

However, the District Judge also had admonished Carrington, stating that “the Court will not accept any motions replete with inflammatory, unprofessional and unnecessary language.” She ordered Carrington to refile a motion, writing that his initial document was “replete with inflammatory, unprofessional, and unnecessary language.”

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

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