Health Care & Insurance  March 13, 2025

Judge OKs bank’s motion to dismiss lawsuit in North Shore case

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LOVELAND — In a flurry of court filings last week related to a nursing home in Loveland, a Larimer District judge has dismissed a lawsuit filed in October against an Oklahoma bank, while entities involved in the conflict notified the court that they have reached a settlement over other issues.

North Shore Associates LLP, owner of the property on which the 120-bed North Shore Manor nursing home sits at 1365 W. 29th St., had battled for control of the facility for more than a year with Wapello Holdings LLC and J. Robert Wilson, who owns nursing-home operator Columbine Management Services Inc. and owned 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.

Wapello sued NSA, but in a filing in late October in Larimer District Court, NSA sued Wilson, his attorney John O’Brien of the Denver law firm Spencer Fane LLP, and Tulsa-based Bank of Oklahoma, alleging that they’re guilty of “aiding and abetting fraud.” Filing as a defendant and “third-party plaintiff,” NSA demanded a jury trial and payment of damages.

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On March 4, however, District Court Judge Stephen J. Jouard approved the bank’s motion to dismiss the complaint without addressing “the issues, substance, and legal sufficiency of NSA’s third-party claims against BOKF with regard to the pending motion to dismiss.”

Included in NSA’s complaint had been a lengthy version of the conflict’s background, claiming that Wilson engaged in “multifaceted betrayal and manipulation.”

“In the 1990s, Wilson was elected as the president and CEO for NSM,” NSA wrote to the court. “In the early 2000s, Wilson was named managing partner of NSA, and his partners went so far as to amend their partnership agreement to bestow upon Wilson certain authority no other partner possessed — the power to encumber NSA’s property.”

NSA alleged that Wilson formed a series of his own companies to act as vendors to North Shore Manor and also “founded several other skilled nursing facilities in the area that are now North Shore’s competitors. By causing NSM to contract almost exclusively with his vendors, Wilson was able to overcharge and siphon from North Shore what is likely to prove to be millions of dollars.”

After the COVID-19 pandemic, NSA alleged, Wilson decided to retire, but what he and attorney O’Brien “sought to hide from North Shore and particularly Wilson’s second-generation partners, was that Wilson’s vision for cashing out included selling the North Shore property and business out from under them.” Wilson’s partners, it said, “learned for the first time in the end of 2022 that not only had Wilson taken out millions of dollars of loans against North Shore’s property to foster his personal banking relationships, but one such loan — a 2016 loan from Bank of Oklahoma — would be coming due for nearly $2 million in a matter of months.”

NSA alleged that Wilson and O’Brien formed Wapello to purchase the Bank of Oklahoma note “behind the backs of Wilson’s partners” using the bank as their accomplice, and that Wapello’s move to appoint a receiver for the property “was designed by Wilson and O’Brien to try to get rid of Wilson’s partners once and for all. As a backstop, Wilson and O’Brien initiated a duplicative foreclosure proceeding in tandem. … Because Wilson failed to sell NSA out from under his partners in 2022, he and O’Brien have instead resolved to use the authority of this Court to force a ‘liquidation’ through the appointment of an ‘auctioneer’ as receiver. Their plan was working until recently.”

Meanwhile, Wapello, NSA, O’Brien, Wilson and the bank announced they had reached settlements in another outstanding dispute. 

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, 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.

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, Jouard appointed the receiver in the Aug. 21 order.

The case in Larimer District Court is Wapello Holdings LLC v. North Shore Associates LLP, Chapter 11 in Larimer County District Court, case No. 2024 CV 30569.

In a flurry of court filings last week related to a nursing home in Loveland, a Larimer District judge has dismissed a lawsuit filed in October against an Oklahoma bank, while entities involved in the conflict notified the court that they have reached a settlement over other issues.

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With BizWest since 2012 and in Colorado since 1979, Dallas worked at the Longmont Times-Call, Colorado Springs Gazette, Denver Post and Public News Service. A Missouri native and Mizzou School of Journalism grad, Dallas started as a sports writer and outdoor columnist at the St. Charles (Mo.) Banner-News, then went to the St. Louis Post-Dispatch before fleeing the heat and humidity for the Rockies. He especially loves covering our mountain communities.
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