A Paxton nursing home that failed to pay back $1.87 million in loans to a Chicago bank is scheduled to be sold at a public auction in August.
PAXTON — A Paxton nursing home that failed to pay back $1.87 million in loans to a Chicago bank is scheduled to be sold at a public auction in August.
But an official for the company that operates the foreclosed ASTA Care Center of Ford County said he doubts "it's going to get to that point."
"We're in the process of working things out with our lender, and the patients, their families and the employees should not worry," said Craig Frank, vice president of finance for ASTA Healthcare Company Inc., which operates six Asta Care Center nursing homes in Illinois.
"The nursing home is open, and it will remain open," Frank added.
Last month, Judge Paul Lawrence granted a "judgment of foreclosure and sale" in the amount of $1,873,484 in Ford County Circuit Court against ASTA Care Center of Ford County and its related corporate entities.
Also named as defendants were Frank, David Meiselman, Michael Gillman, Darryle Gillman and Seth Gillman, all of whom signed loan agreements that ASTA Care failed to fulfill.
Meanwhile, a separate foreclosure case, against the ASTA Care Center of Rockford, remains pending in Winnebago County Circuit Court.
Coincidentally, just days before the two foreclosure cases were filed in February, Seth Gillman, 46, of Lincolnwood, was charged in federal court with health care fraud in connection with an extensive scheme to obtain higher-than-justified Medicare and Medicaid payments for clients of Passages Hospice LLC, a Lisle-based company he co-owns.
Frank said he was not permitted to comment on what led to the foreclosure proceedings. Also declining comment was David Chroust, the attorney representing the Cole Taylor Bank, the plaintiff in each case.
The civil complaint against the Paxton property, located at 1240 N. Market St., alleges that ASTA Paxton Properties LLC obtained a mortgage loan of $1.2 million from the Cole Taylor Bank in July 2008 but had failed to pay $839,508 in principal and interest through Jan. 30, 2014 — several months after the loan was to be fully paid. ASTA Paxton Properties also still owed $905,531 from a $1 million loan it obtained in 2011 for the construction of a new therapy wing.
The bank sought a judgment of $1.744 million, plus additional accrued interest, late charges, expenses, attorney's fees and costs. When Lawrence ruled in favor of the bank on July 16, the final judgment amount included $1,847,913 for the two defaulted loans, plus $24,414 in attorney's fees and $1,157 in other costs.
The Paxton property is to be sold at a public auction on Aug. 19 to satisfy the amount due to the bank.
According to documents filed in Ford County Circuit Court, FNR Healthcare, based in Skokie, was in the process of buying both the Paxton and Rockford nursing homes from ASTA Care when the two foreclosure cases were filed in February. But apparently the deal — to buy the two facilities for a proposed $10.2 million — was never finalized.
Based on its most recent assessed value of $387,280 in 2013, the Paxton nursing home has a market value of about $1.161 million, according to Ford County Supervisor of Assessments Candice Short.
Will Brumleve is editor of the Paxton Record, a News-Gazette community newspaper. For more, visit paxtonrecord.net.