Preview
FILED: ORANGE COUNTY CLERK 10/31/2016 08:03 PM INDEX NO. EF006065-2016
NYSCEF DOC. NO. 27 RECEIVED NYSCEF: 10/31/2016
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF ORANGE
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -X
In the Matter of the Application of : Index No. EF006065-2016
:
ELANT AT FISHKILL, INC., :
:
For an Order to sell substantially all of its assets :
pursuant to Sections 510-511 of the Not-for-Profit :
:
Corporation.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -X
In the Matter of the Application of :
: Index No. EF006066-2016
ELANT AT GOSHEN, INC., :
:
For an Order to sell substantially all of its assets :
pursuant to Sections 510-511 of the Not-for-Profit :
:
Corporation.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -X
In the Matter of the Application of :
: Index No. EF006067-2016
ELANT AT NEWBURGH, INC., :
:
For an Order to sell substantially all of its assets :
pursuant to Sections 510-511 of the Not-for-Profit :
:
Corporation.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -X
MEMORANDUM OF LAW OF PROPOSED INTERVENOR
ELANT CHOICE, INC. d/b/a EVERCARE
IN SUPPORT OF ITS MOTION TO INTERVENE
FARRELL FRITZ, P.C.
Attorneys for Proposed Intervenor,
Elant Choice, Inc. d/b/a EverCare
622 Third Avenue, Suite 37200
New York, New York 10017
(212) 687-1230
Of Counsel:
Peter B. Zlotnick
Ted A. Berkowitz
Adam M. Rafsky
1 of 17
TABLE OF CONTENTS
Page
TABLE OF AUTHORITIES .......................................................................................................... ii
PRELIMINARY STATEMENT .................................................................................................... 1
STATEMENT OF FACTS ............................................................................................................. 3
ARGUMENT.................................................................................................................................. 7
Point I
EVERCARE MAY INTEREVEN IN THE SUBJECT PROCEEDINGS AS OF
RIGHT PURSUANT TO CPLR § 1012............................................................................. 7
Point II
IN THE ALTERNATIVE, EVERCARE SHOULD BE PERMITTED TO
INTERVENE IN THE PROCCEDINGS PURSUANT TO CPLR § 1013...................... 10
CONCLUSION............................................................................................................................. 13
i
2 of 17
TABLE OF AUTHORITIES
Page(s)
Cases
Agostino v Soufer,
284 AD2d 147 [1st Dept 2001]................................................................................................11
American Home Mortgage Servicing, Inc. v Sharrock,
92 AD3d 620 [2d Dept 2012] ............................................................................................14, 16
Cavages, Inc. v Ketter,
56 AD2d 730 [3d Dept 1970] ..................................................................................................12
In re City of New York,
10 Misc 3d 1060[A] [Sup Ct, Kings County 2005] .................................................................13
County of Westchester v Dep’t of Health of New York,
229 AD2d 4601 [2d Dept 1996] ..............................................................................................13
Global Team Vernon, LLC v Vernon Realty Holding, LLC,
93 AD3d 819 [2d Dept 2012] ..................................................................................................12
Mann v Compania Petrolera Trans-Cuba, S.A.,
17 AD2d 193 [1st Dept 1962]..................................................................................................11
Nicholson v Keyspan Corp.,
Index No. 17458/2006, 2007 WL 641168 [Sup Ct Suffolk County Feb. 23,
2007] ........................................................................................................................................11
Pier v Board of Assessment Review,
209 AD2d 788 [3d Dept 1994] ................................................................................................15
Plantech Housing v Conlan,
74 AD2d 920 [2d Dept 1980] ..................................................................................................12
Velazquez v Decaudin,
49 AD3d 712 [2d Dept 2008] ..................................................................................................12
Wells Fargo Bank, Nat. Ass’n v McLean,
70 AD3d 676 [2d Dept 2010] ............................................................................................12, 16
Statutes
CPLR § 1012............................................................................................................6, 11, 12, 13, 14
ii
3 of 17
CPLR § 1013..................................................................................................................7, 14, 15, 16
Not-for-Profit Corporation Law § 510.............................................................................................5
Not-for-Profit Corporation Law § 511.......................................................................................5, 10
Other Authorities
Alexander, Practice Commentaries, McKinney’s Cons Law, Book 7B, CPLR
C1012:1..............................................................................................................................12, 15
iii
4 of 17
Proposed intervenor Elant Choice, Inc. d/b/a/ EverCare (“EverCare”) respectfully
submits this Memorandum of Law in support of its motion to intervene in these proceedings
pursuant to New York Civil Practice Law and Rules (“CPLR”) §§ 1012 (a) (3) and/or 1013.
PRELIMINARY STATEMENT
Proposed Intervenor, EverCare, makes this motion to protect its real and substantial
interests in the outcome of each of the three captioned special proceedings (collectively, the
“Proceedings”). Each of the Proceedings is brought by or on behalf of three entities that each
operate skilled nursing facilities (“SNFs”) and is a subordinate affiliated entity of Elant Inc.
(“Elant”): Elant at Fishkill, Inc. (“Fishkill”); Elant at Goshen, Inc. (“Goshen”) and Elant at
Newburgh, Inc. (“Newburgh,” and collectively with Fishkill and Goshen, the “Elant SNFs”).
Through the Proceedings, each of the Elant SNFs seek this Court’s approval to sell substantially
all of their assets pursuant to Sections 510 and 511 of the New York Not-for-Profit Corporation
Law (“NPCL”) (the “Proposed Elant SNF Asset Sales”). EverCare’s real and substantial
interests in those assets and, specifically, the proceeds due to Elant and/or the Elant SNFs from
the “Proposed Elant SNF Asset Sales (the “Proposed Elant SNFs Asset Sales Proceeds”),
warrants its intervention in the Proceedings.
EverCare’s interest in the Proposed Elant SNFs Asset Sales Proceeds arises from claims
it has asserted against, inter alia, its former sole member and active parent, Elant, and certain of
Elant’s affiliated entities (collectively the “Elant Defendants”), including each of the Elant SNFs,
in a related action also pending before this Court (the “Related Action”). Through its Verified
Complaint (the “Complaint”) in the Related Action, EverCare seeks monetary damages of not
less than $8.5 million arising from its numerous claims against the various defendants named
1
5 of 17
therein. EverCare’s claims sound in, inter alia, breach of contract, breach of fiduciary duty, and
fraud.
At the core of EverCare’s claims is an alleged fraudulent scheme perpetrated by Elant
and the individual defendants – who, at the time, served as officers and directors of Elant –
through which certain improper, inter-company transactions by and between one or more of the
Elant Defendants were effectuated, resulting in a significant depletion of EverCare’s assets and
other actionable harm to EverCare.
Due to Elant’s documented history of fraudulently transferring and unlawfully dissipating
the assets of EverCare and the various Elant Defendants, and to secure any potential money
judgment that EverCare might obtain in its favor against its former affiliates, EverCare moved in
the Related Action by Order to Show cause for a Temporary Restraining Order (the “TRO”), an
Order of Attachment (the “Order of Attachment”), and Expedited Discovery in aid of the Order
of Attachment.
Among the two discrete pools of assets that EverCare seeks to attach in connection with
its application for the Order of Attachment is the as yet unpaid portion of the Proposed Elant
SNFs Asset Sales Proceeds. The other asset source EverCare seeks to attach – an allocation of
settlement proceeds due to Elant and/or the Elant SNFs – also appear to be included among the
assets to be sold in connection with the Proposed Elant SNFs Asset Sales.
Before rendering any decision on whether to grant the Elant SNFs’ petitions in the
Proceedings, the Court should take into consideration the totality of the financial condition of the
parties. That determination necessarily must include consideration of the asset sources EverCare
seeks to attach in the Related Action, and because EverCare’s interests in the asset pools may be
adversely effected, EverCare is entitled as of right to intervene in the Proceedings under
2
6 of 17
CPLR § 1012 (a) (3). Finally, even if the Court should determine that EverCare has not met the
technical requirements of CPLR § 1012 (a) (3), it should, nevertheless, permit EverCare to
intervene in the Proceedings under CPLR § 1013 given EverCare’s obvious and substantial
interest in the outcome of the Proceedings.
STATEMENT OF FACTS
The EverCare-Elant Relationship
EverCare is a not-for-profit corporation organized and existing under and by virtue of the
laws of the State of New York and approved by the New York State Department of Health
(“DOH”) pursuant to applicable laws, rules and regulations governing managed care
organizations (see the Complaint, which can be accessed through electronic docket in the Related
Action [see Orange County Index No.: EF002597-2016, ECF Docket #1], a copy of which is
annexed to the Affirmation of Peter B. Zlotnick, Esq., dated October 31, 2016 [the “Zlotnick
Aff.”], as Exhibit “A”). EverCare provides managed long-term care services to nearly 900
individuals across Orange, Rockland and Dutchess Counties, and its members receive services
from a vast network of service providers, including the Elant SNFs, throughout the Hudson
Valley (see id., at #1). Until December 31, 2014, Elant, which is also a New York not-for-profit
corporation that provides a comprehensive healthcare system and full continuum of care, was
EverCare’s sole corporate member and active parent (see id.).
The Related Action, TRO, and Order of Attachment
On April 19, 2016, EverCare commenced the Related Action by filing the Complaint
against each of the defendants named therein (see id.). The Complaint asserts claims against
Elant, EverCare’s former sole member and active parent corporation, the Elant Defendants –
including the Elant SNFs – as well as against certain past and present officers and directors of
3
7 of 17
Elant and one or more of the Elant Defendants, in their individual and representative capacities
(see id.).
In the Related Action, EverCare seeks a judgment in its favor, jointly and severally,
against the defendants named therein (the “Related Action Defendants”) for, inter alia, monetary
damages and various equitable and legal remedies proximately caused by the Related Action
Defendants’ breaches of contract, breaches of fiduciary duties, and various unlawful conduct
including, but not limited to, the Related Action Defendants’ fraudulent diversion of monies
from EverCare to Elant and/or the Elant Defendants (the “Claims”) (see id.). Among the Claims
are a series of fraudulent transfers and the recording on EverCare’s balance sheets of
uncollectible financial losses incurred by one or more of the Elant Defendants, for which the
requisite regulatory approvals were not approved by the Related Action Defendants and for
which EverCare received no consideration or reciprocal benefit from the Related Action
Defendants (see id.).
Shortly after filing the Complaint in the Related Action, EverCare moved by Order to
Show Cause for a Temporary Restraining Order (the “TRO”), Order of Attachment (the “Order
of Attachment) and Expedited Discovery in aid of the Order of Attachment (see Zlotnick Aff.
Exhibit “A,” #14 - #24). Through the Order of Attachment, EverCare seeks to secure, inter alia,
recovery of a potential money judgment in the Related Action in an amount up to and including
the monetary judgment sought by EverCare in the Complaint,1 by freezing one or both of two
specific pools of assets, which are owned or controlled by Elant and/or one or more of the other
Elant Defendants:
1
That amount is reasonably believed to be not less than $8.5 million.
4
8 of 17
1) the total aggregate cash proceeds due to be paid to the Elant Defendants in connection
with certain proposed asset sale and purchase transactions, including the three2
Proposed Elant SNF Asset Sales at issue in Proceedings; and
2) the funds due and owing to one or more of the Elant Defendants as the owners and
operators of certain SNFs (“the Settling Elant SNFs”) – which include Goshen,
Newburgh, and Fishkill – from a pool of approximately $850 million in proceeds
arising from a universal settlement agreement entered into by and among the State of
New York and approximately 600 New York SNFs, including the Settling Elant
SNFs, to resolve amicably certain outstanding Medicaid rate appeals and litigation
(the “Universal Settlement”) (see id.).
On May 10, 2016, counsel for EverCare and the Elant Defendants appeared in this Court
concerning EverCare’s application for the TRO, which the Court granted in part. On May 26,
2016, Justice Slobod signed the TRO, which was entered the same day and which provides, inter
alia, that:
- pending a hearing on the Order of Attachment, the Elant and the Elant Defendants “shall
not complete” the Proposed Elant SNF Asset Sales;
- “upon the establishment of any closing dates for the [Proposed Elant SNF Asset Sales],
the Elant Defendants . . . shall notify the Court and counsel for [EverCare] of such
closing dates;”
- requiring the Elant Defendants to notify the Attorney General of the State of New York
(the “AG”) of the Related Action at such time as they submit petitions to the AG or to the
Supreme Court of State of New York in connection with the Proposed Elant SNF Asset
Sales; and
- upon EverCare’s filing an undertaking in the amount of $500,000,3 freezing and
enjoining the distribution of the payment of the Elant SNFs’ Universal Settlement
Allocation that was due to be paid on July 1, 2016, pending a further order of the Court.
(see Zlotnick Aff., Exhibit “A,” #39).
The Proceedings
2
Through the Order of Attachment, EverCare also seeks to attach any proceeds due to Elant or any of the Elant
Defendants from a fourth proposed asset sale transaction, which was conditionally approved by the New York State
Department of Health’s Public Health and Health Planning Council (the “PHHPC”) and identified in a certain
Certificate of Need Executive Summary issued by the PHHPC on or about February 11, 2016, as: CON PHHPC
Project No. 152005-E, Application of Newburgh Operations, LLC d/b/a Sapphire Nursing at Meadow Hill.
3
EverCare filed proof of its undertaking on May 27, 2016 (see Zlotnick Aff., Exhibit “A,” #40).
5
9 of 17
On September 6, 2016, the Elant SNFs commenced each of the within Proceedings by
filing with this Court substantially the same verified petitions and supporting documents (each a
“Petition” and collectively the “Petitions”). Each Petition seeks substantially identical relief;
namely, an Order by this Court’s authorizing the sale by each of the Elant SNFs of substantially
all of each Elant SNF’s assets to various purchasers, pursuant to Section 511 of the New York
Not-for-Profit Corporation Law (“NPCL”).
Among the documents that were filed simultaneously with the Petitions in each of the
Proceedings was a letter addressed to Orange County Clerk’s Office, dated September 6, 2016,
and sent by Harris Beach, PPLC as counsel to each of the Elant SNFs (the “September 6th
Letter,” a copy of which is annexed to the Zlotnick Aff. as Exhibit “B”). The September 6th
Letter formally requests the approval of the New York State Supreme Court, Orange County, of
each of the Proposed Elant SNF Asset Sales and, significantly, makes specific reference to the
Related Action. In particular, the September 6th Letter states that, because of the pendency of
the Related Action, the Elant SNFs and their counsel “determined that Orange County Supreme
Court is best positioned to review and approve the” Petitions (see id.).
Further, the September 6th Letter describes the procedural history of the Related Action
and notes the TRO “inter alia, ordered the [Elant SNFs] not to complete the proposed
transactions pending an Order of Attachment Hearing in the [Related Action], and, further,
ordered that reference be made to the [Related Action] within any Verified Petitions of the [Elant
SNFs] submitted pursuant to N-PCL Section 511 or 511-a” (id.).
On September 23, 2016, Jill Faber, Esq., the Assistant Attorney General in Charge in the
Poughkeepsie Regional Office of New York State Attorney General Eric T. Schneiderman, filed
identical Affirmations in each of the Proceedings (collectively, the “Faber Aff.,” a copy of the
6
10 of 17
Faber Aff. is annexed to the Zlotnick Aff. as Exhibit “C”). The stated purpose of the Faber Aff.
was that the Attorney General “wishe[d] to bring to attention of the Court” certain information
germane to both the Proposed Elant SNF Asset Sales and the Related Action(Zlotnick Aff.,
Exhibit “C,” at¶ 3).
Specifically with respect to EverCare’s Motion to Intervene, the Faber Aff. brought to the
Court’s attention the existence and underlying nature (i.e., fraud) of the Related Action, and the
AG’s opinion that the Proposed Elant SNF Asset Sales “may impact Elant, Inc.’s ability to pay
any damages awarded by the court to” Evercare (id. at ¶¶ 4-5). For that reason, the Faber Aff.
explains, the AG believes the Proposed SNF Asset Sales “are relevant to and should be
considered by the court in conjunction with the disposition of the” Related Action (id. at ¶ 5).
ARGUMENT
Point I
EVERCARE MAY INTERVENE IN THE SUBJECT PROCEEDINGS
AS OF RIGHT PRUSUANT TO CPLR § 1012
Because EverCare may be affected adversely through the Proceedings by the disposition
of substantially all of the assets of the Elant SNFs, and the resulting dissipation of the proceeds
from those sales, it has an absolute right to intervene in the Proceedings and must be granted the
opportunity to do so.
Where, as here, an action “involves the disposition or distribution of, or the title or a
claim for damages for injury to, property and the person may be affected adversely by the
judgment,” that person or entity “shall be permitted to intervene in” the action
(CPLR § 1012 [a] [3]; see generally Mann v Compania Petrolera Trans-Cuba, S.A., 17 AD2d
193 [1st Dept 1962]).
7
11 of 17
New York courts “liberally permit persons to intervene in an action pending in the courts
where they have a bona fide interest in an issue involved in that action” (Nicholson v Keyspan
Corp., Index No. 17458/2006, 2007 WL 641168, *1 [Sup Ct Suffolk County Feb. 23, 2007]; see
Agostino v Soufer, 284 AD2d 147, 148 [1st Dept 2001]). Indeed, the “Appellate Division,
Second Department, has said it makes very little difference, as a practical matter, whether
intervention is sought pursuant to CPLR 1012” or the permissive section 1013 (see infra)
“because ‘under liberal rules of construction,’ intervention ‘should be granted, in either event,
where the intervenor has a real and substantial interest in the outcome of the proceedings.’”
(Vincent C. Alexander, Practice Commentaries, McKinney’s Cons Law of NY, Book 7B, CPLR
C1012:1, quoting Berkoski v Trustees of Incorporated Village of Southampton, 67 AD3d 840,
843 [2d Dept 2009] [other citations omitted]; see also Wells Fargo Bank, Nat. Ass’n v McLean,
70 AD3d 676, 677 [2d Dept 2010]; Plantech Housing v Conlan, 74 AD2d 920 [2d Dept 1980]).
As is further explained in the Practice Commentaries, “[a]s a general matter, the successful
intervenor acquires the same status as that of an original party, including the right to participate
in discovery, make dispositive motions, and assert additional claims” (Alexander, Practice
Commentaries, McKinney’s Cons Law of NY, Book 7B, CPLR C1012:1 [citations omitted]).
EverCare unquestionably meets the minimal statutory standard of CPLR § 1012 (a) (3).
First, it is undisputable that the Proceedings involve “property” within the meaning of
CPLR § 1012 (a) (3) (see Global Team Vernon, LLC v Vernon Realty Holding, LLC, 93 AD3d
819 [2d Dept 2012] [granting intervention under CPLR § 1012 (a) (3) in mortgage foreclosure
proceeding where proposed intervenor had docketed money judgment affecting the property]). It
is equally undisputable that, absent immediate intervention, EverCare could “be adversely
affected by the judgment” (CPLR § 1012 [a] [3]; see also Cavages, Inc. v Ketter, 56 AD2d 730
8
12 of 17
[3d Dept 1970] [where third party has an interest in the property involved in the action may be
adversely affected by the judgment, party may intervene as of right]; Velazquez v Decaudin, 49
AD3d 712 [2d Dept 2008]).
While the question of whether a proposed intervenor will be adversely affected is
sometimes a fact-specific inquiry, courts have always held that any substantial economic loss
will satisfy this prong (see e.g. In re City of New York, 10 Misc 3d 1060[A], *7 [Sup Ct, Kings
County 2005] [loss of money proposed intervenor paid for option to purchase property at issue
and loss of money invested in development costs constituted adverse effect warranting
intervention as of right under CPLR § 1012 “and/or 1013”]; County of Westchester v Dep’t of
Health of New York, 229 AD2d 4601, 461 [2d Dept 1996] [potential loss of state funding if
regulations at issue were invalidated constituted adverse effect]).
Here, the closing of each of the Proposed Elant SNF Assets Sales could adversely affect
EverCare through a substantial economic loss. Specifically, the yet to be determined Order of
Attachment seeks, inter alia, to attach the Proposed Elant SNF Asset Sales Proceeds and the
Elant SNF Universal Settlement Allocation, pending the resolution of the Related Litigation. If
this Court grants approval for each of the Proposed Elant SNF Asset Sales and each of those
transactions closes without EverCare having had a chance to participate herein, the Proposed
Elant SNF Asset Sales Proceeds will be dissipated and/or otherwise disappear prior to the
Court’s determination of EverCare’s application for an Order of Attachment (see Faber Aff., ¶¶
4-5).
Further, although ultimately unclear, it appears from the face of each of the Petitions and
Asset Purchase Agreements that the Elant SNF Universal Settlement Allocation(s) are among the
assets included in each of the Proposed Elant SNF Asset Sales. Indeed, while each of Asset
9
13 of 17
Purchase Agreements lists numerous specific assets that are excluded from the sales, the Elant
SNF Universal Settlement Allocation(s) is not among those assets (see e.g. Zlotnick Aff., Exhibit
“A,” #9, at p. 10 [listing among eleven specifically excluded assets, “all assets of or directly
related to and Seller’s interests in Glen Arden, Inc.”]).
Additionally, the assets specifically included in each of the Proposed Elant SNF Asset
Sales appear to include the Elant SNF Universal Settlement Allocation(s), as that section
includes “[a]ny right to . . . settlements . . . arising at any time in connection with Medicare and
Medicaid provider numbers . . . relating to services provided prior to, on or after the Closing
Date” (see e.g. id., at p. 9 [“Refunds; Settlements; Retroactive Adjustments”]). Given that
EverCare has already frozen one installment of the Elant SNF Universal Settlement
Allocation(s), and seeks to attach the remaining installments through the Order of Attachment, it
would be adversely affected should the Court grant the requested approvals with those assets
being included.
To protect its interest in the Proposed SNF Asset Sale Proceeds and the Elant SNF
Universal Settlement Proceeds Allocation, EverCare’s motion to intervene in this action pursuant
to CPLR § 1012 (a) (3) must be granted.
Point II
IN THE ALTERNATIVE, EVERCARE SHOULD BE PERMITTED TO
INTERVENE IN THE PROCEEDINGS PURSUANT TO CPLR § 1013
Should the Court determine that EverCare has not met the technical requirements of
CPLR § 1012 (a) (3), it should nonetheless permit EverCare to intervene in the Proceedings
pursuant to CPLR § 1013 because EverCare has “a real and substantial interest in the outcome of
the proceedings” (American Home Mortgage Servicing, Inc. v Sharrock, 92 AD3d 620 [2d Dept
2012]).
10
14 of 17
Beyond the mandatory nature of CPLR § 1012, the Court in its discretion may permit a
third party to intervene when, inter alia, “the person’s claim or defense and the main action have
a common question of law or fact” (CPLR § 1013). Notwithstanding the express language of
this statute, “[o]ne of the most important consideration for the court is whether the proposed
intervenor has a ‘real and substantial interest in the outcome of the proceedings’” (Vincent C.
Alexander, Practice Commentaries, McKinney’s Cons Law of NY, Book 7B, CPLR C1013:1,
quoting Berkoski v Trustees of Incorporated Village of Southampton, 67 AD3d 840, 843 [2d
Dept 2009] [other citations omitted]). In deciding a motion under CPLR § 1013, the Court shall
also consider “whether the intervention will unduly delay the determination of the action or
prejudice the substantial rights of any party” (CPLR § 1013). As the Appellate Division, Third
Department has explained, however, these considerations,
“which are grounded in general concepts of judicial efficiency and
fairness to the original litigants, are more likely to be outweighed,
and intervention therefore warranted, when the intervenor has a
direct and substantial interest in the outcome of the proceeding.
When that interest is less substantial or more indirect, other
elements take on greater importance”
(Pier v Board of Assessment Review, 209 AD2d 788, 789 [3d Dept 1994]).
EverCare’s claims in the Related Action –as manifested through the TRO and Order of
Attachment – have common questions of law and fact as the within Proceedings. Indeed, in
determining whether to approve the Proposed Elant SNF Asset Sales this Court must consider –
at least to some extent – the financial condition of each of the parties involved. That inquiry is
necessarily impacted by and directly at issue in the Related Action. The Elans SNFs and Elant
are each defendants in the Related Action and their respective financial conditions could be
affected either by the entry of an Order of Attachment and/or a final judgment on the merits in
EverCare’s favor.
11
15 of 17
The proposed sales of substantially all of the assets of each of the Elant SNFs – the
subject of the within Proceedings – may affect materially Elant’s ability to satisfy a monetary
judgment awarded to EverCare and against Elant, or any of the Elant Defendants in the Related
Action. Similarly, precisely which assets are included in the Proposed Elant SNF Asset Sales
(i.e., whether the Elant SNFs Universal Settlement Allocation) may also affect materially Elant’s
ability to satisfy a monetary judgment awarded to EverCare and against Elant, or any of the Elant
Defendants in the Related Action. Thus, EverCare has a “real and substantial interest in the
disbursement” of both the assets of the Elant SNFs and the Proposed Elant SNF Asset Sale
Proceeds, “and, thus, in the outcome of the [Proceedings]” and its motion to intervene under
CPLR § 1013 should be granted (McLean, 70 AD3d at 678 [granting motion to intervene
pursuant to CPLR § 1013]; see American Home Mortgage Servicing, Inc., 92 AD3d at 204-205
[holding that motion to intervene under CPLR § 1013 should have been granted in mortgage
foreclosure action where proposed intervenor asserted she had been divested of the subject
property through fraudulent conveyances]).
Further, permitting EverCare to intervene in the Proceedings is unlikely to delay the
determination of the Proceedings or to prejudice the substantial rights of any party. EverCare
seeks intervention at its earliest possible opportunity, and at the outset of the Proceedings.
Moreover, EverCare’s purpose is intervening is not necessarily to object to or drag out the
approval of the Proposed Elant SNF Asset Sales; in fact, approval of the Elant SNF Asset Sales
could theoretically benefit from their closing (see Zlotnick Aff., ¶ 3). The determination of the
Proceedings, however, involves numerous issues in which EverCare has a real and substantial
interest such that its substantial rights may be prejudiced if it is prohibited from intervening.
12
16 of 17
Having a real and substantial interest in the outcome of the Proceedings, and without any
risk of undue delay or prejudice to the Elant SNFs or Elant, EverCare’s Motion to Intervene
pursuant to CPLR § 1013 should therefore be granted.
CONCLUSION
For all of the foregoing reasons, EverCare respectfully requests that the Court enter an
Order granting EverCare’s Motion to Intervene, and for such other and further relief as this Court
deems just and proper.
Dated: New York, New York
October 31, 2016
FARRELL FRITZ, P.C.
Peter B. Zlotnick
By:
Peter B. Zlotnick
Ted A. Berkowitz
Adam M. Rafsky
Attorneys for Proposed Intervenor
Elant Choice, Inc. d/b/a EverCare
622 Third Avenue, Suite 37200
New York, NY 10017
212.687.1230
13
FF\5889092.1
17 of 17