Gavel with house in background

In early March, a federal bankruptcy court judge approved the sale of a financially troubled chain of 10 long-term care facilities in Iowa. Now, the sale is in jeopardy as buyer Cedar Health Group has raised questions about quality-of-care issues that could affect the licenses for the facilities, the Iowa Capital Dispatch reported Sunday.

The previous owner of the QHC Facilities, Jerry Voyna, died last year, according to the news outlet. His wife, Nancy, took over the company and filed for bankruptcy in December. She died in January, leaving the company to her son, who began pursuing a buyer for the company and its assets.

QHC Facilities, which owns eight skilled nursing facilities and two assisted living communities with a combined capacity for almost 750 residents, filed for bankruptcy amid several wrongful death lawsuits and reportedly still owes more than $700,000 in federal fines. The properties include Mitchellville, QHC Winterset North, QHC Winterset South, QHC Madison Square, QHC Fort Dodge Villa, QHC Crestridge, QHC Crestview Acres in Marion, QHC Humboldt North, QHC Humboldt South and QHC Villa Cottages of Fort Dodge.

Judge Anita L. Shodeen approved the sale to Cedar Health Group, a holding company based in Lakewood, NJ that is part of a network of companies run by real estate developer Mark Tress, who specializes in acquiring distressed properties. By late March, Cedar was second-guessing the purchase due to quality-of-care issues, according to the Iowa Capital Dispatch. At the time, two of the QHC properties had been designated Special Focus Facilities by the Centers for Medicare & Medicaid Services.

According to court records, as of May 18, a wrongful death claim filed by the family of resident Gladys Van Sickle, who died following a fall at QHC’s Winterset North facility, still is in play, with a trial scheduled for October 2023. The bankruptcy court first may have to consider the status of QHC’s insurance once the properties are sold.

The future of the properties remains uncertain. After the Cedar Health Group sale faltered, Shodeen authorized the sale of the chain to competing bidder Blue Diamond Equities, citing “the current financial instability” of QHC Facilities and the lack of a completed management agreement, the Iowa Capital Dispatch reported.

Neither QHC Facilities, Cedar Health Group nor Blue Diamond had responded to requests for comment from the McKnight’s Business Daily by the production deadline.