[A] state-installed manager has taken permanent control of four residential care facilities for elderly residents months after state officials said their Texas-based owner failed to properly stock food, provide adequate staffing and follow basic business practices.
In January, a judge ruled that the state could install a permanent receiver to manage the residential care facilities, after the state had already moved to take over the homes with a temporary manager.
The receiver assumed full control earlier this month, but state officials hope that eventually they will be able to sell the facilities to a new owner.
The facilities, Homestead at Pillsbury in St. Albans, and three in South Burlington — Allenwood at Pillsbury and Pillsbury Manor South and Harborview — are home to about 270 elderly residents.
The homes were owned by East Lake Capital Management, a Dallas-based investment company.
In late May, Judge Mary Miles Teachout appointed Mark Stickney, the chief business officer of Spinglass Management, a Maine-based business advisory firm, to serve as the permanent receiver of the facilities.
According to an online biography, Stickney specializes in areas including business reorganization, debt restructuring and interim management.
When the state first moved to take over the facilities in November, officials alleged that several of the homes had insufficient food supplies, and several had nursing shortages.
The company had also failed to cash rent checks, bill residents and pay vendors, including utilities, on time, the state said.
Judge Teachout, who presides in Washington County Superior Court, wrote in January that “the Defendants had put the residents under severe mental stress and harm, resulting in legitimate fears that the Defendants would not be able to care for them and they would need to find another place to live.”
Assistant Attorney General Bessie Weiss, who has represented the state in the case against East Lake Capital Management, said that since the state assumed control over the facilities, the conditions have improved.
“I understand they’re very stable,” she said. “Bills are completely up to date, maintenance has been kept up with.”
In the long term, Weiss said the state’s goal is to facilitate the sale of the nursing homes to a new owner.
The state will not return management responsibilities of the facilities to East Lake Capital Management or the company’s owner, Andrew White.
“From everything we know right now that would not be appropriate,” Weiss said.
White’s attorney could not be reached for comment.
East Lake Capital Management, which runs senior care facilities across the country, has also struggled to manage properties in other states including North Carolina, Oklahoma and Florida, according to news reports.
Law360, a legal news service, reported in May that after several of the assisted living and residential care facilities under his management saw “service breakdowns,” investors sued White and his businesses November, “accusing him of breaching contracts and fiduciary duties.”
The article mentions the homes in Vermont and facilities in Oklahoma that saw “threatened electricity cutoffs,” unpaid bills and “missed paydays for workers,” under East Lake’s watch.
The legal news organization also reported that another receiver, appointed by a Delaware court to take over for East Lake Capital Management, pressed the court to arrest White over a “chronic failure to cooperate with attempts to right the business or even pay some workers.”
However, White avoided arrest in June when the court instead ordered him to pay more than $300,000 in fees and meet demands for records and information.
