B’nai Brith Hillel of Toronto has sold One Kenton Alzheimer Centre for Excellence (One Kenton), a residence for patients suffering from various forms of dementia, as part of a restructuring that has allowed both to avoid bankruptcy.
The 45-bed facility, which is less than half full, was acquired by One Kenton Memory Care Limited Partnership, a new entity headed by Avi Gottlieb, the president of Avcon Construction, the company that built One Kenton. Gottlieb said he has put a team in place, including Manny and Shael Simon of Eldercare Equities, who will operate the facility, and Isaac Weinroth, who will serve as its executive director. Weinroth held the same position at One Kenton when it first opened.
“I saw this as a great opportunity to give something back to the community,” Gottlieb told The CJN. “It is something that is greatly needed in our community and in the general community. The facility is state of the art – I know, because I built it.”
Gottlieb said he expects the new management will offer cutting-edge technology and focus on new programming, treatment and activities to ensure a high quality of life for the residents.
“The key for me is to ensure that everybody is treated with dignity and respect and that there is a seamless transition for them,” Gottlieb said.
Avcon was contracted to build One Kenton, which opened in December 2013, but the company had to take a second mortgage in May 2014 when B’nai Brith Hillel ran out of money and was unable to pay them.
“They more or less forced my hand.” It was either take the mortgage or walk away, Gottlieb said.
The second mortgage was valued at $1.6 million and was held by Avcon, Claude Ayache and Norel Electric.
The Bank of Nova Scotia (BNS) held an $8 million first mortgage on the property, of which more than $7 million was still owing.
B’nai Brith Hillel, which shares the same Hove Street address as B’nai Brith Canada, owned the property at 1 and 3 Kenton, while One Kenton Alzheimer Centre for Excellence operated the residence.
One Kenton’s financial difficulties finally came to a head in June. It was rapidly running out of money to pay its debts and, facing the prospect of being petitioned into bankruptcy, B’nai Brith Hillel sought court protection from creditors.
In an affidavit filed in court, Michael Mostyn, CEO of B’nai Brith Hillel, One Kenton and B’nai Brith Canada, said One Kenton was facing “a liquidity crisis.”
Altogether, B’nai Brith Hillel had debts totalling $10.9 million while One Kenton owed creditors more than $90,000. At the time, B’nai Brith Hillel and One Kenton had $67,000 in cash, but were spending $50,000 per month.
One Kenton and B’nai Brith Hillel each filed a notice of intention to make a proposal under the Bankruptcy and Insolvency Act, which, when approved by the court, provide an automatic stay of proceedings against the creditors. A. Farber & Partners was named proposal trustee and tasked with finding a buyer of One Kenton and managing the facility’s financial affairs. At the same time, BNS extended a credit facility to allow One Kenton to continue to operate.
Court has been asked on several occasions to permit extensions of the stay period. The most recent lasts until Nov. 23, when B’nai Brith Hillel and One Kenton are to present proposals to their creditors.
Gottlieb would not reveal the purchase price, saying only that he acquired it “free and clear.”
A. Farber & Associates did not respond to email questions by The CJN’s press time, and B’nai Brith declined to comment for this article.
In acquiring One Kenton, Gottlieb acknowledged he’s not an expert in running a home for Alzheimer’s patients, which is why he assembled an expert operations team. But he’s had personal experience of the heartache it can create. His father is experiencing the onset of dementia, and it has made him “more sensitive to it and created a bond with the family members” at One Kenton.
Looking at it from a business perspective, he said, “It’s important to create a new image for the facility” and to try to close in on 100 per cent occupancy.
When One Kenton was first conceived in 2002 by former B’nai Brith Canada CEO Frank Dimant and B’nai Brith donors, it was envisioned as a 24-bed home for Alzheimer’s patients. But after an adjacent property became available, it was acquired in 2006 and plans were amended to make it a 45-bed facility, Mostyn stated in an affidavit filed in court.
The facility was expected to be a state-of-the-art, personalized facility with a staff-to-resident ratio of three to one.
Despite its lofty ideals, One Kenton opened with only four residents. During 2014, there were never more than 17 permanent residents in the building, and it’s currently home to 19 people. To break even, the 45-bed facility would need 33 or 34 residents, Mostyn stated in an affidavit.
This story has been modified from its original version.