‘Serious concerns’: Three more Martino care homes in Hamilton in receivership
Three more retirement homes owned by the Martino families have been placed in receivership.
Dundas Retirement Place, Montgomery Retirement Home and Northview Seniors Residence went into receivership recently after the homes' lender, Buduchnist Credit Union, expressed serious concerns about the deteriorating financial state of the homes since early summer.
The three Hamilton homes will continue to operate under the direction of the receiver until a sale is arranged.
It's another devastating blow for the Martinos' chain of care homes, which has been hit with a wide array of licence revocations, sanctions, regulatory orders, evacuations, concerns about COVID infections and allegations of poor living conditions over the past eight months.
On Dec. 1, Ontario's governing body for retirement homes announced the three homes, as well as three other Martino properties, will have their licences revoked on June 1 unless they are sold to a buyer that meets the approval of the Retirement Homes Regulatory Authority (RHRA). The other three homes are Cathmar Manor in downtown Hamilton, Sheridan Lodge in Brantford and Greycliff Manor in Niagara Falls.
In addition to the six pending licence revocations, the Martinos' Rosslyn Retirement Home had its licence revoked by the RHRA in June following a COVID outbreak in May that killed 16 and sent more than 60 to hospital. The Martinos are appealing the revocation order.
Emerald Lodge, a residential care facility owned by the Martinos and governed by the City of Hamilton, was placed in receivership in September and then evacuated in October after allegations there were no functioning washrooms in the 30-bed home and that a resident was found tied to a radiator.
Brothers Aldo Martino and the late John Martino previously owned the Royal Crest Lifecare chain of care homes until it collapsed into bankruptcy in 2003, leaving Ontario taxpayers on the hook for $18 million.
Members of the Martino families did not respond to a request for comment made through their lawyer.
MNP LLP, the court-appointed receiver for Northview, Montgomery and Dundas Retirement Place, did not respond to a request for comment.
The receivership process means the Martinos have now lost the ability to control the finances of the three homes, how the homes are operated, how the homes will be sold and to whom.
According to affidavits filed in court, Buduchnist Credit Union (BCU) provided about $10.7 million of financing in total to Northview, Montgomery and Dundas Retirement Place in mid-2018.
Tom Wilson, a BCU vice-president, states in his affidavit that the credit union later learned the Martinos had registered a second mortgage of $1.3 million against two of the properties in November 2019 without the knowledge or consent of BCU and contrary to the loan agreement.
Wilson claims that there had been no mortgage payments paid to BCU by Northview and Dundas Retirement since May and no payments by Montgomery since June.
Over the course of last summer, Wilson states he had several conversations with a restructuring adviser retained by the Martinos which raised concerns for BCU. Wilson states he discovered payroll deductions and certain taxes weren't being paid by the Martinos, and revenues from all of the Martinos' homes were being pooled together and allocated in a manner as they determined to be appropriate between all of the retirement homes."
On Sept. 22, Wilson states, he received a package of financial documents from the Martinos that only increased BCU's concerns."
He states a number of important documents weren't provided, including no business plans, no COVID-related steps taken by the Martinos, no details of past or current compliance violations with regulators, no details of residents' deposits received, and no details about government deductions and remittances.
BCU then turned the documents over to the eventual receiver who advised that Dundas Retirement Place was being propped up financially by Northview and Montgomery while at the same time Dundas Retirement had made a number of payments each in the amount of $10,200 to Aldo Martino."
BCU has serious concerns about its security and the financial situation of the (homes)," Wilson's affidavit states. This is compounded by the debtors' failure to provide documents which could have addressed many of these concerns."
The Martinos have previously stated they are trying to arrange a bulk sale of their properties.
But in a second affidavit, filed in early December, Wilson states BCU learned that a proposed sale of the homes by the Martinos had fallen through. There was no other prospective purchaser," Wilson states, and no realistic prospect" of the three homes being sold by the Martinos.
Far more concerning, it appears that the (Martinos) are not able to operate the three homes and the licences to operate the homes will be revoked," Wilson states. This will jeopardize the value of BCU collateral and will put the residents in the retirement homes at risk."
The RHRA said it's aware the homes have been placed in receivership and all previous orders continue to apply, including the possible revocation of the licences on June 1 if a suitable purchaser for the homes isn't found.
The RHRA will work closely with the receiver to ensure that residents continue to receive the care they need and that any transitions are handled according to law and regulation while minimizing any disruption to residents," said RHRA spokesperson Kathryn Chopp.
Steve Buist is a Hamilton-based investigative reporter at The Spectator. Reach him via email: sbuist@thespec.com