Report: Assisted Living center owners had finance and operations trouble
GREENSBORO, Jan 26, 2013 (News & Record - McClatchy-Tribune Information Services via COMTEX) --
Owners of two assisted living centers that closed this week have had money and operational problems since 2001.
The problems included personal bankruptcy for owners Larry and Amy Patton, unpaid taxes and, most recently, a court order to pay their lender $2.6 million for a defaulted loan on their assisted living centers.
The state was also planning to close one of the businesses for violations of state care regulations.
The Pattons closed Serenity Care Assisted Living in Greensboro and Tillery Chase Adult Care Home in Mt. Gilead on Friday. Serenity Care was designed as a rest home for people who needed some assistance. Tillery Chase, in Montgomery County, housed both the elderly and those with mentally illnesses.
Residents at both homes were told on Tuesday they would need to find new places to live by Friday. Employees at Serenity Care Assisted Living center said they had not heard from the Pattons after they were told the business would close. Employees weren't told whether they will be paid for recent work. Multiple phone calls to the Pattons were not returned this week.
According to the N.C. Department of Health and Human Services, the Mt. Gilead business has been cited for regulatory violations four times since 2008. Twice for what the agency describes as Type A violations, which result in death or serious physical harm. The maximum fine is $20,000.
Records show the first violation occurred Feb. 1, 2008. The citation relates to the facility failing to enforce a no-smoking policy. The agency's written explanation of the violation mentions a fire that forced the evacuation of 53 people from a building that required two people to seek medical treatment. The penalty was $16,000, which the facility paid Nov. 4.
The second violation occurred July 6, 2012. Records state that the staff shared and failed to clean blood testing devices. The facility, "failed to assure staff-implemented infection control measures," according to the report, endangering four residents. An $8,800 fine was paid Sept. 12, 2012.
Tillery Chase had two other lesser violations, in July 2010 and November 2011, in which they failed to give medications to residents and did not provide a required psychiatric consultation. The Pattons were fined a combined $5,240 for the infractions.
The state maintains a four-star system to rate adult care facilities. Tillery Chase slipped from a three-star rating in 2010 to one star in 2011. In September 2012, the facility lost its final star for deductions in its rating for resident care and services, medication management and violations that endangered residents' wellbeing.
"We were in the process of terminating them," said Jim Jones, spokesman for the Department of Health and Human Services. Jones said facilities don't automatically close when they have no stars. Closing a business is based on a facility's failure to comply with regulations.
Jones said a letter was mailed to the Pattons on Jan. 17 to tell them the state would close Tillery Chase Adult Care Home.
Serenity Care Assisted Living has no recorded violations under the Pattons' ownership. It had a three-star rating from August 1999 through December 2012.
A citation for the Mt. Gilead facility would not have kept the Greensboro facility from operating.
"One of the first things we try to do is bring them back (after violations)," Jones said, "and if they don't comply, we move to more serious measures."
The Pattons also faced financial issues that led to the closing of both facilities.
In December 2012, Guilford County Superior Court ordered the Pattons to repay $2.6 million
to CapFinancial. The judgement was the latest in a trail of court records and other public documents that chronicle more than a decade of money woes.
In 2001, the Pattons filed for personal bankruptcy.
The Pattons remained tied to the centers after bankruptcy through 2012, when state records show they failed to file an annual report with the N.C. Secretary of State.
The Pattons also owe $11,002 to Montgomery County and $3,855 to Guilford County for unpaid 2012 property taxes.
In October 2006, the Pattons refinanced their loan on the nursing homes with CapFinancial.
According to court documents, the Pattons struggled to make payments from the start. They were nearly a month late with their first payment of $42,956 in early 2007.
By late 2012, they owed the company $2.2 million.
On Dec. 4, a Guilford County Superior Court judge ordered the Pattons to pay the $2.6 million judgement to CapFinancial, which also included interest, late fees and attorney costs.
When CapFinancial didn't receive the money this month, its attorney notified the Pattons -- and the Guilford County clerk's office -- of items they were eligible to keep. A home usually qualifies. The adult care facilities, which were used as collateral for the loan, do not qualify.
About 10 days later, employees at Serenity Care Assisted Living said they were told by the Pattons by telephone that the Greensboro facility would close. The closing of both businesses displaced about 60 residents and left approximately 30 without jobs.
Calls made Friday to Serenity Care Assisted Living center were picked up by voice mail, and the center's website was taken off the Internet.
Contact Sarah Newell Williamson at 373-7076, and follow @snewell on Twitter
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