New Jersey firm wins auction bid for Folts

June 08--HERKIMER -- The sale of Folts Home and Folts Adult Home took another step forward this week when a New Jersey firm emerged the winner in Tuesday's court-designated bankruptcy auction for the facilities' assets.

Cedar Holdings, LLC, of Lakewood, New Jersey, already owns 13 senior health care facilities in New York state, according to a news release about the sale issued by Bond, Schoeneck & King, PLLC, of Syracuse, which acted as the debtors' counsel in the case.

The auction lasted five hours at the firm's offices with active bidding by multiple bidders, the release stated.

Cedar Holdings is the parent company that invests in quality real estate and health care assets.

"We are excited about acquiring the Folts skilled nursing and adult residential facilities, and enhancing their level of care and quality to the highest level of standards," said Mark Tress, of Cedar Holdings.

The bid submitted by Personal Healthcare, LLC was designated as the back-up bid.

"It was a spirited auction," said Jeffrey R. Manning, managing director, with CohnReznick Capital, when reached by telephone.

CohnReznick Capital, the debtors' court-appointed investment banker, conducted the expedited marketing process and the auction.

He said a number of capable bidders with experience operating skilled nursing facilities took part.

"We were very, very pleased," Manning said.

The results of the auction will now go for review and approval before Bankruptcy Judge Diane Davis at a sales hearing scheduled for 10 a.m. on June 20 at the United States Courthouse in Utica.

"The court will be looking for a number of things," said Manning. "They'll want to know that it was adequately marketed -- it's a good sign that it was a spirited auction -- and that the transaction was at arm's length."

He explained that means there is no connection between the prevailing bidder and previous owners.

Also, anyone who thought he was not treated fairly in the process could bring that complaint before the court at that time.

"I'm pretty confident that no one would be able, on a legitimate basis, to say he was not treated fairly," said Manning. "We worked very hard to keep the process transparent. We're not rooting for anyone. We're trying to get the highest bid and the best outcome."

He added he thought the people of Herkimer would be pleased with the results.

"It's a pretty critical need," Manning said.

Manning expects the process to go smoothly and that Folts will be in the hands of Cedar Holdings on or before Aug. 1.

"I expect the local management team under (Folts Administrator) Donna Kelley would continue," he said. "It should be seamless."

The sale does not affect resident care, and with the approval of the asset sale, the entities move forward with a stronger financial footing to provide senior health care services to residents in Central New York, according to Bond, Schoeneck and King.

Folts Home and Folts Adult Home filed petitions for relief on Feb. 16 under Chapter 11 of the U.S. Bankruptcy Code. In a statement issued at that time, Homelife at Folts and Folts-Claxton said the move gave Folts the opportunity to explore the sale of the nursing home and adult home facilities to a qualified purchaser while continuing to provide uninterrupted high-quality residential health care services.

Folts experienced financial losses and incurred significant liabilities during 2011, 2012 and 2013 and, in 2013 the New York State Department of Health, at Folts' request, appointed a voluntary receiver to operate the nursing home and adult home facilities effective Oct. 1, 2013. Since Feb. 14, 2015, receivers HomeLife at Folts, LLC and HomeLife at Folts-Claxton, LLC have operated the home, stabilizing the facilities and ensuring high quality services to residents.

Late in 2012, the state Attorney General's Office began investigating "financial irregularities" at Folts Homes and Folts Chief Executive Officer Ralph Reid and Chief Operating Officer Ernest Orts resigned due to "financial considerations."

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