A federal judge granted a temporary lifeline to the financially ailing Cold Spring Hills Center for Nursing and Rehabilitation on Friday, allowing the Long Island nursing home to keep the lights on after it filed for bankruptcy.
U.S. Bankruptcy Judge Sean Lane greenlit a request from the facility’s owners – who include nursing home magnates Bent Philipson and his son Avi – to borrow additional money to continue paying workers, according to Schuyler Carroll, an attorney representing the owners. Cold Spring Hills requested that the facility borrow additional cash while it comes up with a plan to settle more than $50 million in debts under the chapter 11 bankruptcy process.
The motion allows Cold Spring Hills to pause an impending evacuation of its more than 300 elderly and disabled residents for the time being. The nursing home’s owners first warned that they would be forced to evacuate the residents just a few days before Christmas, claiming that they could no longer make their $1.4 million payroll costs because of continued financial challenges. A state judge blocked the nursing home from removing its residents without required approvals from the state Department of Health, prompting its owners to file for bankruptcy last week to settle its outstanding debts.
The nursing home owners are still seeking approval from the Health Department to close the facility or hand it over to a new owner. The agency is reviewing an application from Eliezer Jay Zelman, who owns other nursing homes statewide, to take over Cold Spring Hills.
The 588-bed nursing home, one of the state’s largest, has struggled to stay afloat in the last few years because of an ongoing state fraud investigation that alleged the owners diverted $22 million in taxpayer funds away from resident services. A judge rejected most of the state’s claims and fined the nursing home $2 million, but the attorney general’s office is appealing the case. The ongoing lawsuit has forced the nursing home to rack up legal costs and resulted in declining resident admissions, putting Cold Spring Hills into further debt, its owners say.
Cold Spring Hills owes its landlord – a real estate company managed by one of its owners, Bent Philipson – more than $21 million, since it hasn’t paid rent since early 2024, according to court filings. It also owes approximately $15 million to various union funds.
The nursing home’s bankruptcy case will proceed over this month, and Cold Spring Hills is set to go back to state court regarding the attorney general’s case and the impending evacuation of its residents on Jan. 22.
