The assets of the Manzanita Manor senior care center and the Peppertree Apartments complex, all the way down to the fixtures, are slated to be put on the public-auction block Tuesday as a creditor of the properties' owner, Mark Yampol of Tucson, seeks to raise the $940,000 he owes.
According to a legal notice published in the Tucson's Arizona Daily Star and other newspapers Aug. 4, the assets of five Yampol-owned residential and care facilities will be auctioned "for cash to the highest bidder," including "accounts receivable, contract rights, equipment, fixtures, general intangibles, inventory and all proceeds thereof and thereto."
In addition to the two Payson properties, the sale also involves the assets of Yampol's Santa Rosa Clinical Care in Tucson, Chula Vista Clinical Care in Mesa, and Desert Haven Clinical Care in Phoenix.
In addition to settling Yampol's $940,000 debt, the creditor's attorneys are seeking to recoup all legal expenses and selling costs. The auction is scheduled at 10 a.m. Tuesday at the Tucson office of Leonard Felker Altfelde Greenberg & Battaile, which is representing Yampol's creditor.
Although the attorney handling the auction, Jeffrey H. Greenberg, was unavailable for comment Thursday, his office confirmed Thursday afternoon that the auction would "definitely" take place.
Contacted at Manzanita Manor, Yampol who leases the Manzanita Manor building complex through his Tucson-based management company, Community Care LLC said the auction had been canceled due to a "credit line" he had obtained.
"Mr. Greenburg and I got an arrangement ... and they're supposed to dock it all on Monday," Yampol said. "This is truly a moot issue."
The real problem, he said, is damaging gossip by "people trying to play games and get back (at me) for being dismissed, et cetera, et cetera. This is a little game."
Caught in the game
According to one Payson senior health care official, even if the auction takes place, it does not necessarily mean Manzanita Manor will close or that its 54 residents along with the occupants of the Peppertree's 45 units will have to seek immediate relocation.
"(The properties) will go up for auction, but how many legal loopholes (Yampol might be able) to jump through is yet to be seen and won't be known until after the auction," Ellen Stewart, director of Payson Care Center, said. No matter what, Stewart added, "There would be a period of time that (Yampol) would have to pull it all back together or to find other areas for the residents to go to. That would be a minimum of 60 days."
Thus far, living conditions at Manzanita Manor are still up to par, said Mike Murphy of the Department of Health Services, which regulates Arizona's nursing homes for health and safety.
"We did have an inspector there last week, and everything looked okay," Murphy said Thursday. "We are watching it very closely, and we're optimistic that a buyer will come forward (to continue operation without interruption)."
In any event, Manzanita Manor residents and their families who have "prepaid or are financially into them run the risk of having those monies go away," said a Payson attorney who asked not to be identified. "But the worst they're looking at, probably, is relocation, and they will be given time to do that. Generally, when such properties are sold, it's a process of going to court and getting an order to enter the premises to remove the items."
Should the time come that the residents do face relocation, Payson Care Center has a minimum of 20 beds and a maximum of 43 available for their use, Stewart said.
"We are licensed for 163 residents, and we have 120 now. So conceivably, we could handle the majority (of Manzanita Manor's residents), but not the entire amount," she said. "But we will help them in any way we can, to make it smooth for the residents, their families and the staff, if (closing Manzanita Manor) comes to happen."
No matter what happens next at Manzanita Manor, Stewart advised, the first thing the facility's residents and their families need to do is seek advice from their physician and case manager, if they have one.
Yampol's financial battles
According to a number of news reports published by the Arizona Daily Star, Yampol is no newcomer to foreclosures, foreclosure sales and legal action by creditors although Yampol himself said Friday that most of the newspapers' reports are "100 percent inaccurate or false."
According to the Daily Star:
In December 1999, Yampol made a $1 million down payment to purchase Tucson General hospital for $8.8 million, then failed to make all but a few small payments, according to court documents. Over the following months, Yampol failed to make payroll several times, while bills from pharmaceutical firms and other vendors were left unpaid. At one point, Tucson General told the health department that it had just $34,000 on hand only a fraction of what it needed to meet its next $270,000 payroll. In October 2000, the Arizona Department of Health Services forced Tucson General to close its emergency room, stop taking new patients and transfer patients to other hospitals after being notified of its unpaid $355,000 electric bill. Yampol's company, Tucson Clinical Care, filed for Chapter 11 reorganization in U.S. Bankruptcy Court, and the hospital which he had valued at $11 million in a financial statement was sold in foreclosure by the original owners for $4.6 million.
In January, 2001, a Tucson nursing home, Carington Care Center, filed for bankruptcy, went out of business and underwent a foreclosure sale, forcing 68 senior citizens to move somewhere else. The Star identified the owner as Yampol, who said Thursday that he had "no connection whatsoever" with the business.
One month earlier, Carington and the Yampol-owned Santa Rosa Care Center narrowly avoided being shut down after falling behind on payments to Tucson Electric Power Co.
Yampol also filed for Chapter 11 reorganization on his Tucson Oasis Apartments, an apartment complex next door to Carington. This was the only Star report that Yampol said was accurate.
According to the Star, Yampol failed to pay more than $1.3 million in federal payroll taxes on employees between 1997 and 2000, according to Internal Revenue Service liens filed with the secretary of state. Yampol denied this Friday.
Over the past three years, more than a dozen vendors have taken legal action to recover thousands owed them for supplies shipped to nursing homes and other facilities owned by Yampol. In October 1999, a Pima County Superior Court judge ordered one Yampol company to pay nearly $14,500 to a vendor that had sold supplies to one of his nursing homes. In an October 2000 Superior Court judgment, Yampol was ordered to pay more than $38,000 to another vendor.
All of Yampol's properties were listed as defendants in a September 2000, lawsuit which said he owed another supply company nearly $65,000. Yampol was sued again in October 2000, by a Florida lender who said Yampol had not repaid $250,000 in loans. Friday morning, Yampol said no loan had been made, so nothing is owed.
In January 2000, Yampol made a bid on the Villa Maria Care Center in Tucson. Court documents state that he made an $800,000 deposit on the facility, but forfeited the amount after failing to obtain additional financing. At the time he was trying to purchase the nursing home, the Star reported, Yampol had already defaulted on a Tucson General payment. "I know nothing about this," Yampol said Friday morning.
In the latter half of 2000, Yampol stopped paying the health insurance premiums for employees of another of his Tucson senior-care facilities, Desert Gardens. According to the Star, one of those employees was not aware that he was uninsured until he was hit with nearly $120,000 in unpaid hospital bills after suffering a heart attack. According to Yampol, "I had no ownership of Desert Gardens from 1998 forward."