New York Codes, Rules and Regulations › Title 18 - DEPARTMENT OF SOCIAL SERVICES › Chapter II - Regulations of the Department of Social Services › Subchapter D - Adult-Care Facilities › Part 485 - General Provisions › Section 485.9 - Receivership

Current through Register Vol. 46, No. 28, July 10, 2024
(a)
Receiver
		    appointed upon application of the commissioner.
(1) When the department revokes or
		    temporarily suspends the operating certificate of an adult care facility
		    subject to this Part, excluding shelters for adults that are addressed in Part
		    491 of this Title, and the commissioner determines that appointment of a
		    receiver is necessary to protect the health, safety and welfare of the
		    residents of a facility, the commissioner may seek the appointment of a
		    receiver by applying to the Supreme Court in the county where the facility is
		    situated for an order directing the operators, owners and prime lessors, if
		    any, of the premises to show cause why the commissioner, or at the discretion
		    of the commissioner his designee, should not be appointed receiver to take
		    charge of the facility.
(2) The
		    commissioner shall not be required to seek the appointment of a receiver or to
		    assume the responsibilities of a receiver directly or indirectly through his
		    designee; nor shall any court be authorized to compel the commissioner to
		    assume the responsibilities of a receiver or to appoint a designee to assume
		    such responsibilities.
(3) The
		    department may, if it deems appropriate, grant an operating certificate to any
		    facility operating or scheduled to operate under a receiver. The duration of
		    the operating certificate shall not exceed the duration of the
		    receivership.
(4) Any receiver
		    appointed upon application of the commissioner shall have all of the powers and
		    duties of a receiver appointed in an action to foreclose a mortgage on real
		    property, together with the following additional powers and duties:
(i) The receiver shall, with all reasonable
		    speed but, in any case, within six months after the date on which the
		    receivership was ordered, unless otherwise extended by the court, provide for
		    the orderly transfer of all residents in the facility to other facilities or
		    make other provisions for their continued safety and care.
(ii) The receiver shall operate the facility
		    in compliance with regulations of the department.
(iii) The receiver, with the approval of the
		    commissioner, shall incur expenses as may be necessary to operate the facility.
		    He shall collect incoming payments from all sources and apply them to the costs
		    incurred in the performance of his functions as receiver. The receiver shall
		    honor all existing leases, mortgages and chattel mortgages that have previously
		    been undertaken as obligations of the owners or operators of the facility. No
		    security interest in any real or personal property comprising the facility or
		    contained within the facility, or in any fixture of the facility, shall be
		    impaired or diminished by the receiver. The receiver shall compensate the
		    owners of any goods held in inventory for those goods which he uses or causes
		    to be used by reimbursing the costs of such goods, except that no such
		    compensation shall be made for any such goods for which owners have already
		    been reimbursed.
(iv) The receiver
		    shall not be required to file any bond.
(5) Notwithstanding paragraph (4) of this
		    subdivision and, except in the case where the receiver is assuming an existing
		    bona fide arm's-length lease, the commissioner shall determine a reasonable
		    monthly rental for the facility, based on consideration of all appropriate
		    factors, including the condition of such facility. The rent, as determined by
		    the commissioner, shall be paid by the receiver to the owners or prime lessors
		    as may be directed by the court for each month that the receivership remains in
		    effect. In the event that the amount established by the commissioner is less
		    than the currently valid lease, the obligation of the operator shall not be
		    altered or diminished.
(6) The
		    receiver:
(i) shall be entitled to a fee and
		    reimbursement for expenses as determined by the commissioner, based upon
		    consideration of all appropriate factors relating to the operation of the
		    facility, to be paid as a charge against the operator, not to exceed the fees,
		    commissions and necessary expenses authorized to be paid to receivers in an
		    action to foreclose a mortgage;
(ii) shall be liable only in his official
		    capacity for injury to person and property by reason of conditions of the
		    facility in a case where an owner or operator would have been liable; he shall
		    not have any liability in his personal capacity, except for gross negligence
		    and intentional acts;
(iii) may,
		    subject to approval by the commissioner, ratify any collective bargaining
		    agreement in effect between the operator and the employees of a facility, or
		    suspend such collective bargaining agreement; provided, however, that the
		    receiver, in his official capacity, remains liable for payment of wages and
		    salaries at the rates and levels in effect at the time of his appointment;
		    and
(iv) shall notify the
		    commissioner of any lien or conveyance made in contemplation of receivership
		    with an intent to remove an asset of the facility from the jurisdiction and use
		    of the receiver, or to hinder or delay the receiver in the execution of his
		    duties and responsibilities as receiver.
(7)
(i) 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 facility, or services rendered by the
		    facility, 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.
(ii) Any person who refuses or omits to make
		    such 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 for any
		    such payments made to him. The receipt of the receiver for any sum paid to him
		    shall, in all suits and proceedings and for every purpose, be as effectual in
		    favor of any person holding the same as actual payment who would have been
		    entitled to receive the sum so paid. No resident shall be discharged, nor shall
		    any contract of rights be forfeited or impaired, nor any forfeiture or
		    liability be incurred, by reason of any omission to pay any owner, contractor
		    or other person any sum so paid to the receiver.
(8) All transactions involving the
		    receivership shall be on the accrual basis of accounting.
(9) Obligations of the operators, owners or
		    prime lessors.
(i) The operators, owners or
		    prime lessors shall not be relieved of any civil or criminal liability or
		    obligation incurred, or any duty imposed by law, by reason of acts or omissions
		    of such persons prior to the appointment of any receiver. During the period a
		    facility is operated by a receiver, the operator, owner or prime lessor, if
		    any, shall continue to be liable for all obligations for the payment of taxes
		    or other operating and maintenance expenses of the facility, and the owner or
		    other appropriate person shall continue to be liable for the payment of
		    mortgages or liens.
(ii) Expenses
		    incurred by a receiver to meet the operating and maintenance expenses of the
		    facility and the basic needs of the residents of the facility shall be deemed
		    the obligations of the operator, and not the obligations of the receiver or the
		    State.
(iii) The receiver shall not
		    be responsible for any obligations incurred by the owner, operator or prime
		    lessor, if any, prior to the appointment of the receiver.
(iv) The receiver shall be entitled to use
		    for operating and maintenance expenses, and for the basic needs of the
		    residents of the facility, a portion of the revenues due the operator during
		    the month in which the receiver is appointed. This portion shall be established
		    on the basis of the amounts of the operating and maintenance expenses for such
		    month. Such amounts shall be prorated by dividing the number of days of the
		    receivership appointment by the number of days in the month.
(v) Any sums determined to be due and owing
		    by the receiver to the owner, operator or prime lessor shall be offset by any
		    charges determined to be the obligations of the owner, operator or prime
		    lessor.
(10) The court
		    shall terminate the receivership only under any of the following circumstances:
(i) six months after the date on which it was
		    ordered, except that the court may extend such period for good cause
		    shown;
(ii) when the department
		    grants an operator a new operating certificate; or
(iii) at such time as all of the residents in
		    the facility have been provided alternative modes of care, either in another
		    facility or otherwise.
(11) At the time of termination of the
		    receivership, the receiver shall render a full and complete accounting to the
		    court and shall dispose of any profit or surplus as instructed by the
		    court.
(12) Payments to receivers
		    appointed upon application of the commissioner.
(i) The commissioner is authorized to make
		    payments to a receiver only if the receiver demonstrates to the satisfaction of
		    the commissioner that the facility's funds which are available are insufficient
		    to meet operating and maintenance expenses of the facility and the basic needs
		    of the residents of the facility.
(ii) The operator shall be liable for all
		    monies made available to the receiver pursuant to this paragraph.
(iii) Any payments made by the commissioner
		    to a receiver shall be made without any obligation on the part of the social
		    services district, in which the receiver-operated facility is located, to
		    reimburse the department for any such payments.