Attorney General T.J. Donovan with Department of Disabilities, Aging and Independent Living Commissioner Monica Hutt
A court-appointed receiver has assumed control of three residential facilities that serve the elderly in Chittenden and Franklin counties after food shortages and financial problems caused concerns about residents’ health and safety, state officials announced Friday.
Vermont Attorney General T.J. Donovan said Allenwood at Pillsbury Manor and Pillsbury Manor South, both in South Burlington, and Homestead at Pillsbury in St. Albans were in control of a receiver tasked with stabilizing the homes’ finances and keeping them open.
“When you talk about running out of food, that’s when you gotta step in and protect people,” Donovan said. “And that’s what we did.”
Assistant Attorney General Bessie Weiss said the homes’ owner, East Lake Capital Management, based in Dallas, Texas, stopped cashing rent checks from residents early in 2018.
“We’ve received complaints not only from staff, from residents, but also family members concerning the three residential care homes,” Donovan said, outlining the complaints about financial problems. Those led to more critical issues at the homes, he said.
“Perhaps most concerning to me and to all of us was food insecurity,” Donovan said. “In fact, the State of Vermont, through the Agency of Human Services, had to front the money this week in order to pay the food vendor to have food delivered today for these facilities. I believe the state of Vermont paid over $17,000.”
Officials said about 100 total residents live in the three facilities.
State officials thanked the staff at all three homes for doing their best to insulate residents from any negative effects of the apparent mismanagement by East Lake Capital Management.
“They’ve gone above and beyond in making sure that these residents are cared for and fed,” Donovan said. “Some of the staff have taken it upon themselves to go out to Costco to buy food and eggs to make sure that the residents have food.”
It's clear that people who live in the facilities have been anxious, though. One elderly resident who has macular degeneration took pen to paper to write to Donovan's office. "Many residents here are very stressed at the unknown we face," the resident wrote in neat Palmer Method cursive. "Rumor has it that you and your staff are checking out what is 'going on' here and I pray the rumor is true. How wonderful it would be if you or someone were able to come here and speak to us and possibly to ease our concerns."
Donovan said state officials spent Thursday visiting the facilities and meeting with residents and staff. More meetings were planned Friday.
Monica Hutt, the commissioner of the Department of Disabilities, Aging and Independent Living, said East Lake Capital Management’s owner, Andrew White, has not given a good explanation of what went wrong.
“What I can tell you is that the explanations that he offered were not adequate to meet our concerns,” Hutt said.
East Lake Capital Management bought the three homes in May 2017, and complaints filed with the attorney general say problems started almost immediately.
In an October complaint, the son-in-law of a 90-year-old resident at Allenwood outlined a meeting White attended in June at the facility. According to the complaint, White told residents and family members that his company was changing banks from Wells Fargo to “another unnamed bank,” but that the transfer was taking longer than expected.
“He assured everyone not to worry, that there was plenty of money to pay the bills,” the complaint said. “The company, he said, was financially sound.”
The complaint said White promised to have the issues resolved by the end of August. By October, the complaint said, some vendors stopped serving the homes.
East Lake Capital Management “was reportedly not paying the much beloved hairstylist for the service she was providing to residents of Allenwood. Not wanting to lose her, residents felt compelled to pay her [in] cash, which she reluctantly took. After a period of time on the advice of her attorney the hairstylist stop[ped] coming.”
Another complaint came from a resident’s family member in September.
“We have not paid a bill since March,” the complaint said. “We are told that they are working on the problem, but can’t tell us when it will be resolved. I am concerned that the facility may be closing. The [corporation] that owns it is doing a poor job of communicating with us. Since the ownership changed … things have gone downhill.”
Seven Days tried a phone number listed for East Lake Capital Management.
After one ring, a recording announced the reporter was “not authorized” to call the number.
The court-appointed receiver, Douglas Wolinsky of the law firm Primmer Piper Eggleston & Cramer, has temporary control over all three residential facilities.
Donovan said a court hearing scheduled for November 14 will determine whether the homes are permanently removed from East Lake Capital Management’s control. The state wants Wolinsky to oversee the facilities on a long-term basis until problems are resolved.
According to Donovan, East Lake Capital Management owns similar facilities in North Carolina, Texas, Indiana and Tennessee. He said there are similar legal proceedings against the company in Texas and Tennessee.
Officials wouldn’t say whether there is a criminal investigation.
"The top priority is the health and safety and the welfare of all the residents and making sure that these homes are being run properly, that the vendors are being paid,” Donovan said. “We’re at the level of taking care of the basics … and that’s the priority right now.”