Kreps DeMaria

Cindi Perantoni, [email protected]

Karla Cobreiro, [email protected]

The U.S. Bankruptcy Court Approves Reorganization Plan for Hollywood Hills Rehab

Committee of Unsecured Creditors Will Receive 100% Distributions

MIAMI, FL (August 17, 2016) –
Today, the United States Bankruptcy Court for the Southern District of Florida (Judge Olson) confirmed the plan of reorganization of Hollywood Hills Rehabilitation Center, LLC, paving the way for a 100% distribution to unsecured creditors, plus interest – a rare outcome in a bankruptcy proceeding. Creditors should receive their payments in the coming weeks.

Attorneys Paul J. Battista and Glenn D. Moses, partners at the Miami-based law firm Genovese Joblove & Battista, represented the Official Committee of Unsecured Creditors (the “Committee”), which served to protect the interests of general unsecured creditors. In this case, the unsecured creditors had claims of approximately $2 million.

Hollywood Hills Rehabilitation Center, which operated a 152-bed Florida-licensed nursing home located at 1200 N. 35th Avenue in Hollywood, filed for Chapter 11 on April 8, 2015. The nursing home, real property, and related assets were sold during the chapter 11 proceeding after a competitive auction process on June 24, 2015. The initial (or “stalking horse”) bid for the nursing home was $17 million and the auction concluded with a sale price of $24.6 million. The winning bidder was an affiliate of Larkin Community Hospital, which also asserted a secured claim in excess of $16 million.

The total debt in the case exceeded $20 million. Larkin’s secured claim was reduced and settled at $14 million, which it used as credit in its bid on the purchase of the assets in addition to paying cash. This allowed unsecured creditors to receive 100% of their claims (approximately $2 million), plus 6 ½ percent interest. Battista and Moses were actively involved in the auction and the sale, which led to the distribution to the creditors.

Prior to bankruptcy, the nursing home’s former CEO Karen Kallen-Zury was sentenced to 25 years in prison and a $40 million fine for running a Medicare fraud scheme. The Debtors’ assets, including significant funds, were frozen as part of civil and criminal forfeiture proceedings against Kallen. Ultimately, the government agreed to a release of those assets during the bankruptcy, which was a significant event leading the way to distribution.

According to Moses, “We were extremely pleased to help achieve this result for creditors. It is rare in a bankruptcy case when unsecured creditors receive a material distribution on what they are owed. In this case, all allowed claims were not only paid in full, but were paid with interest. We would like to credit the Markowitz firm, especially Jerry Markowitz and Grace Robson, who did a great job in managing the case and who we worked closely with to negotiate the distribution plan.”

Markowitz Davis Ringel & Trusty, PA (Jerry Markowitz and Grace Robson) represented the Debtor, Hollywood Hills and related companies. Steven B. Zuckerman of Farlie Turner & Co acted as the investment banker in connection with the sale.


About Genovese Joblove & Battista, P.A.

Genovese Joblove & Battista, P.A. (GJB) was established in 1999 by founding partners John H. Genovese, Michael D. Joblove, and Paul J. Battista. Today, GJB has grown steadily to become a major regional firm with offices in Miami and Fort Lauderdale and an affiliate office in Caracas, serving clients throughout the U.S. GJB attorneys are recognized for their experience representing clients in large and complex litigation in a number of areas, including bankruptcy, insolvency, receiverships, franchises, and general commercial matters, as well as white collar, real estate, employment law, class actions, and securities litigation. The firm and its affiliate, GJB Consulting, also counsel clients in local, state and federal government matters. For more information, visit

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