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RI nursing home files for court protection, cites ‘fiscal distress’ due to COVID-19

Target 12

PROVIDENCE, R.I. (WPRI) – The owner of Hopkins Manor in North Providence has filed for court protection, claiming his nursing home is suffering financial losses amplified by COVID-19 that could sink the business.

Hopkins Manor owner Lawrence Gates last week filed the petition in R.I. Superior Court, asking the court to appoint a so-called “special master” to take over control of the nursing home and the company that owns the building, Hopkins Health Center LLC.

Such a request is one way business owners try to shore up finances, while also protecting themselves from lawsuits and debtors when running out of money.

In court documents, Gates claims the nursing home is “suffering financial losses which may result in the inability to pay their debts in the ordinary course of business,” adding that the “fiscal distress has been exacerbated by the ongoing COVID-19 pandemic.”

The public health crisis in Rhode Island has proven most severe in nursing homes, as the disease has killed more than 150 residents and at least two employees in long-term care facilities across the state. As of Thursday, more than 20 residents had contracted the disease at Hopkins Manor and at least one person had died, according to the R.I. Department of Health.

In his petition to the court, Gates claimed to have taken every reasonable effort to improve the facility’s finances.

But the nursing home and its landlord “remain in a perilous financial situation, and absent court intervention, may be forced to shut down their operations and seek liquidation – a grim prospect not only for [the businesses], but especially for the residents of the Hopkins Manor nursing homes and for creditors,” he wrote.

In response to the petition, Superior Court Judge Brian Stern appointed attorney Jonathan Savage of Shechtman Haperin Savage LLP to take control of the nursing home, ordering him and his law firm to manage its finances and operations.

The order also authorizes Savage to sell the business and building if he determines that is the best course of action.

“[Savage] is hereby authorized and empowered to sell at public action any or all of the assets,” Stern wrote in his order, adding that Gates and the businesses are protected from most legal action during this process.

In addition to stabilizing the nursing home’s finances, Savage and his law firm will be responsible for taking care of the residents, their families and the nursing home’s staff.

Chris Fragomeni, an attorney working with Savage, said that part of the job is paramount in the effort moving forward.

“We’re doing everything we can,” Fragomeni told Target 12.

Eli Sherman (esherman@wpri.com) is a Target 12 investigative reporter for WPRI 12. Follow him on Twitter and on Facebook.

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