Closure plan for Cold Spring Hills Center for Nursing & Rehabilitation moves forward after proposed buyer, union can't reach deal

A plan to close Long Island's second largest nursing home is moving forward, leaving about 300 residents — many elderly and disabled — needing a new home as Cold Spring Hills Center for Nursing & Rehabilitation begins laying off employees, according to Friday court proceedings and a lawyer for the facility.

The development comes after the nursing home's lawyer told a judge its proposed purchaser, Eliezer Jay Zelman, backed out of an agreement to take over after more than a week of failed negotiations for a modified deal with 1199SEIU United Healthcare Workers East.

The union represents the bulk of the Woodbury facility's roughly 500 employees — 50 to 70 of whom were being sent termination notices starting Friday, according to Cold Spring Hills attorney Schuyler Carroll.

An end to negotiations means the financially troubled nursing home will shutter its doors by no later than May 15, with residents needing relocation to other long-term care facilities.

"The borrower and the union have not reached an agreement and those negotiations have concluded," Carroll said during a hearing Friday as part of the nursing home's federal bankruptcy proceedings. "The buyer has decided not to move forward with the sale."

U.S. Bankruptcy Court Judge Sean H. Lane, who is overseeing the Cold Spring Hills case, indicated Friday he would approve a plan the nursing home has filed with the state to close the 588-bed facility. The New York State Department of Health also must approve the plan and indicated Friday in court that officials are reviewing the application.

"The department is reviewing the closure plan, moving as quickly as possible to give that approval," said Enid Stuart, special bankruptcy counsel at New York Attorney General Letitia James' office, which represents the department. 

Zelman, a Rockland County nursing home owner, and his attorney didn't come to Friday's hearing after attending previous court proceedings and didn't respond to requests for comment later.

State health officials already had approved Zelman to take over operations as the nursing home's temporary receiver. He also previously agreed to purchase the facility for just $10, although the agreement, which would have required approvals that could have taken months, called for him to take on $72 million in mortgage debt on the property, court records show.

Union spokesman Bryn Lloyd-Bollard told Newsday on Friday before the hearing that Cold Spring Hills employees would hold a final vote on a revised labor deal, proposed by arbitrator Martin Scheinman, throughout the day and evening. It was unclear if union members, who previously rejected the same deal, would change their votes.

Lloyd-Bollard didn't respond to requests for comment following Friday's hearing. An attorney for the union was present at Friday's hearing but declined to comment when prompted by the judge.

On Wednesday, union attorney David Slutsky wrote to Scheinman, who led mediation between the nursing home and union last week, indicating negotiations had failed and workers had overwhelmingly "rejected" the revised collective bargaining agreement, according to an email Newsday obtained Friday.

Slutsky also wrote in the email that unless the nursing home would agree to allow members to opt back into their union-operated health insurance plan, "there does not appear to be a viable path to an agreement."

In Jan. 24 court filings, the union said Zelman wanted "to eliminate all scheduled wage increases and drastically slash benefits" while maintaining the health insurance plan members have had since April. The nursing home's previous health insurance plan was administered by the union while under the current plan, Cold Spring Hills pays the insurer directly.

In addition, Zelman wanted to remove positions from the bargaining unit, including registered nurses, physical therapists, physical therapy assistants, occupational therapists, certified occupational therapy assistants, respiratory therapists, respiratory technicians and dietitians, the union said. 

In an interview after Friday's hearing, Carroll said termination notices would go out Friday to more than 10% of Cold Spring Hills' employees, including those working as therapists.

"We don't need these employees to provide the appropriate, full resident care," Carroll said, adding that the nursing home, which is down to 299 residents, would consolidate operations from three buildings into two. 

The nursing home planned to file a formal notice Friday with the New York State Department of Labor indicating the facility would close and all employees would be laid off, Carroll said.

Bent Philipson, Cold Spring Hills' primary owner, and his son, Avi Philipson, the business' managing member, have said in court papers they're incurring $625,000 in weekly losses and cannot afford to continue operating the facility.

In December, Cold Springs Hills threatened an "emergency evacuation" of its residents, a Dec. 31 facility closure and the intent to lay off its entire workforce.

But on Dec. 20, State Supreme Court Justice Lisa Cairo granted a temporary restraining order James' office sought that blocked the discharge or transfer of residents and required the facility to remain operational.

The facility then filed for bankruptcy protection on Jan. 2, moving the case to federal court.

Cold Spring Hills has been in financial peril for years, records show. In December 2022, a lawsuit from James' office charged that the nursing home neglected resident care and skirted state laws through a fraudulent business setup designed to enrich its owners.

In April, Cairo imposed a $2 million penalty as part of the lawsuit's resolution and appointed an independent health monitor for the facility.

By Robert Brodsky

robert.brodsky@newsday.com@BrodskyRobert

Robert Brodsky is a breaking news reporter who has worked at Newsday since 2011. He is a Queens College and American University alum.