NY Pub Health L § 4670 (2021)
2021 New York Laws PBH - Public Health Article 46-A - Fee-for-Service Continuing Care Retirement Communities Demonstration Program 4670 - Receiverships.

§  4670.  Receiverships.  1.  The  council  may, if it determines that serious operational deficiencies exist  or  serious  financial  problems exist  and  such  action  is desirable, enter into an agreement with the operator or owners  of  a  fee-for-service  continuing  care  retirement community  with  respect to the appointment of a receiver to take charge of the community under conditions as found acceptable by  both  parties. Receivership  commenced  in  accordance  with  the  provisions  of  this subdivision shall terminate at such time  as  may  be  provided  in  the receivership  agreement,  or  at  such time as either party notifies the other in writing that it wishes to terminate such receivership.   2. Upon request of the council, the commissioner shall, at the time of revocation, suspension or  temporary  suspension  of  a  certificate  of authority,  apply  to  the supreme court where the community is situated for an order directing the owner of the land and/or structure on  or  in which  the community is located, to show cause why a receiver should not be appointed to take charge of the community. In those cases  where  the certificate  of  authority  has  been  revoked, suspended or temporarily suspended, the supreme  court  shall  appoint  a  receiver  that,  where reasonably possible, is a legal entity that holds a valid certificate of authority.  Such  application  shall contain proof by affidavit that the facility has had its certificate  of  authority  revoked,  suspended  or temporarily  suspended. Such order to show cause shall be returnable not less than five days after service is completed  and  shall  provide  for personal  service of a copy thereof and the papers on which it is based, on the owner or owners of the land and/or structures on or in which  the community  is  located.  If  any  such owner and manager cannot with due diligence be served personally within the county where the  property  is located  and  within  the  time fixed in such order, then service may be made on such person by posting a copy thereof  in  a  conspicuous  place within  the  community  in  question,  and  by sending a copy thereof by registered mail, return receipt requested, to such  owner  at  the  last address  registered  by him or her with the department or in the absence of such registration to the address set forth in the last recorded  deed with respect to the facility. Service shall be deemed complete on filing proof of service thereof in the office of the county clerk, or the clerk of the city of New York, as the case may be.   3.  On  the  return of said order to show cause, the matter shall have precedence over every other business of the court unless the court shall find that some other pending  proceeding,  having  a  similar  statutory precedence,  shall  have  priority.  The  court may conduct a hearing at which all interested parties  shall  have  the  opportunity  to  present evidence  pertaining  to  the  application.  If the court shall find the facts warrant the granting thereof, then any such qualified and approved agency, person  or  corporation,  or  the  commissioner  or  any  person designated  by  the  commissioner,  shall  be appointed receiver to take charge and assume operation of the community. However, such receiver may make application to the appointing court for  decision,  reformation  or such other relief as may be appropriate to protect the best interests of the  residents  residing  within such community. No security interest in any real or personal property comprising the community shall be impaired or diminished in priority by the receiver. The receiver shall compensate the owner or owners of any goods held in inventory for those goods which he or she uses or causes to be used by reimbursing  the  costs  of  such goods,  except that no such compensation shall be made for any goods for which the owners  or  operators  of  the  community  have  already  been reimbursed.   4.  Any  receiver appointed pursuant to this section shall have all of the powers and duties of a receiver appointed in an action to  foreclose  a  mortgage  on  real property, together with such additional powers and duties as are granted and imposed pursuant to this section. The receiver may correct  or  eliminate  those  deficiencies  in  the  facility  that seriously  endanger  the  life,  health,  safety  or  finances  of  such residents subject to such terms as the court may  direct.  The  receiver shall  operate  the  community  in  such  a manner as intended to assure safety and adequate care for such residents.  Any  receiver  who  is  an official  or  employee  of  the  state shall not be required to file any bond. The receiver  shall  honor  all  existing  leases,  mortgages  and chattel  mortgages that had previously been undertaken as obligations of the owners or operators of the community.   5. The appointing court, upon application of the  receiver,  may  make such  provision  as  justice may require for reasonable compensation and reimbursement of the reasonable expenses of the receiver.  The  receiver shall  be  liable  only  in  his  or her official capacity for injury to person and property by reason of conditions of the community in  a  case where  an owner would have been liable; provided that he or she operates such facility in compliance with the terms of his  or  her  appointment, the  receiver  shall  not  have  any  liability  in  his or her personal capacity, except for gross negligence and intentional acts.   6. a. The court  shall  terminate  the  receivership  only  under  the following circumstances:  (i) when the community is issued a new certificate of authority; or  (ii)  at  such time as all of the residents in the community have been provided alternate residential and health care services.   b. At the time of termination, the receiver shall render  a  full  and complete  accounting  to the court and shall make disposition of surplus money at the discretion of the court.   7. a. Any person who is served  a  copy  of  an  order  of  the  court appointing  the  receiver  shall,  upon  being  notified of the name and address of the receiver, make all payments for  goods  supplied  by  the community,  or  services  rendered  by the community, to the receiver. A receipt shall be given for each such payment, and  copies  of  all  such receipts  shall  be kept on file by the receiver. The amount so received shall be deposited by the receiver in a special account which shall also be used for all disbursements made by the receiver.   b. Any person refusing or omitting to make such a payment  after  such service  and  notice  may  be sued therefor by the receiver. Such person shall not in such suit dispute the authority of the receiver to incur or order such expenses, or the right of the receiver to such payments  made to  him or her. The receipt provided by the receiver for any sum paid to him or her shall, in all suits  and  proceedings  and  for  every  other purpose,  be  as effectual in favor of any person holding the receipt as actual payment of the amount thereof to the operator or other person  or persons  who  would,  but  for the provisions of this section, have been entitled to receive the sum to be paid. No resident shall be discharged, nor shall any contract or rights  be  forfeited  or  impaired,  nor  any forfeiture  or  liability  be incurred, by reason of any omission to pay any operator, owner, contractor or other person any sum so paid  to  the receiver.   8.  Any  other  provision of this article notwithstanding, the council may, if it deems  appropriate,  grant  to  any  community  operating  or scheduled  to  operate under a receivership authorized by this section a certificate of authority, the duration of which shall be limited to  the duration of the receivership.   9.  a.  No  provision  of  this section shall be deemed to relieve the operator, owner or manager of any civil or criminal liability  incurred, or  any  duty  imposed  by  law,  by  reason of acts or omissions of the  operator, owner or manager prior to  the  appointment  of  any  receiver pursuant  to  this  section,  nor  shall  anything  in  this  section be construed to suspend during the receivership any obligation of the owner for  the payment of taxes or other operating and maintenance expenses of the community nor of the owner or any other person for  the  payment  of mortgages or liens.   b.  The receiver shall not be responsible for any obligations incurred by the owner, manager or prime lessor, if any, prior to the  appointment of  the  receiver, other than those obligations to residents pursuant to the fee-for-service continuing care contracts.   c. The receiver shall be entitled to use for operating and maintenance expenses and the basic needs of the residents of the community a portion of the revenues due the operator during the month in which the  receiver is  appointed,  which  portion  shall be established on the basis of the amounts of the unpaid operating and maintenance expenses for such month.