DeKalb County nursing home sale lawsuit defendants have 45 days to respond, says judge

Those named in the county lawsuit alleging ‘substantial financial losses’ have not responded to the filing, judge says

The DeKalb County Rehab and Nursing Center in DeKalb on Tuesday, Oct. 17 2023.

SYCAMORE – The defendants of a lawsuit filed by DeKalb County seeking more than $8.3 million in damages from a failed sale of the DeKalb County Rehabilitation and Nursing Center have been given 45 days to respond to the lawsuit, a judge ruled Thursday.

The lawsuit – filed in DeKalb County court Nov. 9 by the State’s Attorney’s office on behalf of the DeKalb County government – alleges the buyers’ failure to see the sale through caused “substantial financial losses” to the county, which alleges it was “defrauded and manipulated.”

Circuit Court Chief Judge Bradley Waller heard the lawsuit for the first time Thursday in a hearing that lasted less than 10 minutes.

Waller ruled he’ll allow the lawyers representing Skokie-based Saba Healthcare, Evanston-based Illuminate HC, and the individuals named in the lawsuit – Moshe Blonder and Aaron Singer of Saba Healthcare and Avi Zuckerman and Israel Davis of Illuminate HC – up to 45 days to respond to the county’s filing.

They had not yet done so as of Thursday. A lawyer representing the defendants asked Waller for more time to review the allegations before issuing a response.

“I’ll grant all defendants 45 days to answer or otherwise plead, and we’ll just put in there a yet-to-be-determined date based upon a briefing schedule,” Waller said.

Landmark Abstract Agency LLC, the buyers’ escrow agent, and DeKalb Healthcare Holdings LLC, DeKalb Healthcare Holdings II, LLC and DeKalb SNF Land Holdings – companies created by the purchasers in the interest of closing the sale – also were named in the lawsuit.

Assistant DeKalb County State’s Attorney, David Berault, who represents the county, walked into the courtroom before 9 a.m. – when the hearing was scheduled – and found the proceedings had started and finished without him. The hearing started six minutes early.

Because DeKalb County did not have representation at the hearing, only Waller could respond to a request from Warren Fasone – a lawyer representing DeKalb Healthcare Holdings LLC, DeKalb Healthcare Holdings II, LLC, DeKalb SNF Land Holdings LLC, Illuminate HC LLC, Davis and Zuckerman – seeking 45 days to file a motion on the lawsuit.

Fasone said “the complaint is rather long” when Waller asked why he was requesting more than six weeks to respond to the lawsuit.

“It has exhibits that have hundreds – or not hundreds, excuse me, about seven hours of audio clips and things of that nature, and it’s going to be a rather long motion to dismiss,” Fasone said.

Just before Fasone’s request, Jack J. Carriglio, a Crozen O’Conner lawyer representing Saba Healthcare, Singer and Blonder told Waller he’d spoken with the DeKalb County State’s Attorney’s office. Caarriglio said both parties had agreed Carriglio’s clients would file their response on Feb. 16.

When asked by Waller if he could bring a response by Feb. 16, Carriglio said he wouldn’t mind getting extra time.

Berault said while he wasn’t expecting it, he wasn’t surprised by Waller’s decision to allow all defendants 45 additional days to respond to the lawsuit.

“There’s multiple defendants, so they all had to be tracked back down and served. We ended up having to use alias summons as well to get some of them. Because of that, they had contacted us and asked us if we would allow for more time for them to answer, and otherwise plead,” Berault said. “That was the plan going in today, and as I understand it that’s what came out of it, so I have no problem with that. It’s just an issue of timing for pleading, and that doesn’t matter.”

Carriglio declined comment after Thursday’s hearing.

The DeKalb County Board voted to sell the DeKalb County Rehab and Nursing Center, 2600 N. Annie Glidden Road, to Illuminate HC for $8.3 million in July 2022. Officials said a sale was needed to keep the facility financially viable after years of alleged mismanagement, delinquent billing and falling resident numbers created $7 million worth of county debt.

The DeKalb County Board entered into the sale contract with Illuminate HC to purchase the rehab facility after it voted down a similarly priced bid from Saba Healthcare. However, according to the lawsuit, DeKalb County alleges the defendants misrepresented the entities and parties of the sale.

In spring 2023, DeKalb County officials learned both health care companies that had sought to buy the county’s nursing center had joined forces, intending to collaborate on the facility’s operation once the purchase was finalized.

That fact came under intense scrutiny at a July 11, 2023, public hearing in DeKalb, however. Public outcry continued at a July Bolingbrook meeting where the Illinois Health Facilities and Services Review Board’s deferment put the sale on hold.

A month later, Illuminate HC principal Zuckerman proposed to remove Saba Healthcare principals from the sale contract and future operations. However, that proposal would have prevented the state health board from making a decision on the purchaser’s certificate of need application – one of the final steps required before the sale could have commenced – at an Oct. 3 meeting.

In September 2023, the DeKalb County Board unanimously voted down Zuckerman’s proposal, and shortly before the Oct. 3 meeting county officials were informed the would-be purchasers intended to exit the sale contract.

DeKalb County is seeking to recoup court costs, attorney’s fees and punitive damages in the amount of $8.3 million for the failed purchase of the facility, as well as millions in additional damages because the county was forced to operate the facility at a loss of approximately $200,000 a month while the sale contract was active, according to the lawsuit.

Joyce Klein, a member of the public who has frequented public meetings pertaining to the the future of the county-owned nursing home, attended Thursday’s hearing.

“I came here to monitor what’s going on with the lawsuit with the county nursing home,” Klein said. “Our biggest concern is that taxpayers are getting represented well, but we also want to make sure that we’re staying on track for the nursing home to remain county-owned and operated.”

This story was updated at 3:27 p.m. Feb. 2, 2024, to correct an earlier version which misstated the defendants’ actions. No motion has been filed by lawyers for the defendants in response to the lawsuit.

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