Epic Rehabilitation and Nursing at White Plains has filed for bankruptcy citing “predatory actions” by its landlord as the nursing home’s impetus for seeking Chapter 11 protection.
Epic declared $8.7 million in assets and $18.2 million in liabilities in a petition filed Nov. 1 in U.S. Bankruptcy Court, White Plains. More than $16.4 million in liabilities are unsecured loans from affiliated companies and owners.
Epic claims it was forced to file the case because of excessive damages sought by its landlord in a pending lawsuit, “and in order to prevent the threatened abrupt termination of its lease and ability to provide care and services to its patients.”
The 160-bed nursing home at Church Street and Barker Avenue in downtown White Plains opened in 2019, more than two years late and $5 million over budget, according to Epic. It employs about 250 people and has about 120 patients.
It was financed and built by White Plains Healthcare Properties I, an affiliate of The Congress Companies, of Peabody, Massachusetts. The affiliate owns the building and is the landlord.
Last year the landlord sued Epic in Westchester Supreme Court for $84 million, claiming that the nursing home had defaulted on the lease.
Epic CEO Lizer Jozefovic called the accusations frivolous, in an affidavit filed with the bankruptcy petition. Epic, he said, has made all rent payments, totaling $10.5 million.
The problem, according to Jozefovic, is that the landlord defaulted on a $38.5 million loan from Security Benefit Life Insurance Co. that was used to refinance the mortgage, pay for construction and equip the nursing home.
Last May, Security Benefit filed a foreclosure action against the landlord for allegedly defaulting on loan payments. Epic was not named as a defendant.
Now, Jozefovic says, the landlord owes Security Benefit about $42 million.
The landlord “is looking to back out of the agreement as they now find themselves in default with their creditors,” Epic claims in a Nov. 1 press release. “To deflect from their troubles, this landlord is using predatory legal tactics against us.”
William A. Nicholson, CEO of The Congress Companies, did not reply to an email asking for his side of the story.
By filing for bankruptcy, the landlord’s pending lawsuit against Epic was automatically suspended.
Jozefovic said he wants to exercise a lease option to buy the property for $65.1 million, use bankruptcy to resolve the disputes and obtain financing to pay the bills as they come due.
The White Plains nursing home is part of Epic Healthcare Management, based in Croton-on-Hudson. The company operates nursing homes from New York to Florida, including six in the Hudson Valley that are owned directly or indirectly by Jozefovic and Mark Neuman, the chief financial officer.
Manhattan attorney Tracy L. Klestadt represents Epic in the bankruptcy case.
