Press "Enter" to skip to content

NJ Firm’s Mismanagement of SD Nursing Homes Prompts State Takeover

Sunday before last, the Aberdeen American News reported that the financial troubles of Skyline Health Care, while triggering state governments to seize their nursing facilities in Kansas and Nebraska, appeared not to be affecting operations in South Dakota.

Skyline spokesman Juda Engelmayer maintains that the company’s problems are strictly in Nebraska and Kansas.

“In South Dakota, I don’t believe you have issues in your state. I don’t believe there are any issues in any other state. I think we’re good everywhere else. The issues were very localized,” he said [Victoria Lusk, “Under Fire in Nebraska and Kansas, Skyline Health Care’s SD Operations Appear in Order,” Aberdeen American News, 2018.04.22].

This week, the New Jersey nursing home owner’s troubles have crept north:

The South Dakota Department of Health filed a motion for Skyline Health Care to turn over its assets and income after residents at its 19 facilities in the state were put at risk, The Aberdeen (S.D.) American News reported, citing court documents.

Debbie Menzenberg, a licensed nursing home facility administrator and a divisional vice president in charge of Skyline facilities in South Dakota, indicated in an e-mail to the South Dakota Department of Health that facilities in the state have enough food and medical supplies to last until Wednesday, May 2.

She said in the e-mail that all Skyline facilities across the U.S. are entering receivership or being sold, and that Skyline will be dissolved today.

“This leaves South Dakota without a plan,” Menzenberg wrote, according to the paper. “Mr. (Joseph) Schwartz (Skyline owner) called me Friday, April 27, 2018, to state… no capital, the state needs to put them in receivership, there is no way to continue operations and all residents are at risk” [Maggie Flynn, “Skyline Healthcare Collapsing in South Dakota, Could Dissolve Soon,” Skilled Nursing News, 2018.05.01].

Skyline Health Care took over management of Golden Living centers in Madison and other towns at the beginning of 2017. The acquisitions here were part of Skyline’s nationwide buying binge of 110 nursing homes in South Dakota, Nebraska, Kansas, Massachusetts, Florida, and Arkansas between 2015 and 2017. Skyline did not appear equipped to manage such a large expansion of its holdings:

[Attorney Stephen] Monroe said Skyline may have seen a business opportunity, but it is debatable whether they were in any financial position to seize it.

“I was calling around and (asking), ‘Do you know anything about Skyline? Do you know anything about Skyline?’ ” Monroe said. “I talked to one lender who said he gave them five minutes of his time and then said, ‘No business here.’ “

The company was owned by a single family, the Schwartzes (Joseph, Rosie, Michael and Louis), and Monroe said nursing home industry watchers used to joke about their office above the pizza joint in Wood-Ridge, N.J. [Kelsey Ryan and Andy Marso, “How a Small Company Above a N.J. Pizza Parlor Put Kansas Nursing Home Residents at Risk,” Kansas City Star, updated 2018.04.16]

Skyline has/had 1,800 employees in South Dakota serving around 900 residents at its nineteen South Dakota facilities. The now notoriously untrustworthy Juda Engelmayer says Skyline doesn’t really own the South Dakota facilities and blames Golden Living for all trouble:

“Skyline has never owned the properties; rather, an affiliate was simply the care provider and tenant,” the statement said. “Skyline and its affiliates have been dedicated to providing quality care to the residents of the facilities, has absolutely been meeting its obligations to its staff and patients, and it has been engaged in good faith negotiations with the property owners, Golden Living, to come up with a viable solution.”

“We have extended the olive branch to Golden Living to help seek a new operator,” the statement continued. “The landlord has rebuffed Skyline’s efforts, unilaterally extended the timeline, which further disadvantaged this process, and that is what forced this issue” [Flynn, 2018.05.01].

Golden Living leased its properties to Skyline specifically to get out of its own operating troubles. But it’s kind of tough for Golden Living to viably solve anything if Skyline isn’t paying its leases:

Skyline has not paid leases on many of the Golden Living facilities it took over, according to a March 23 letter from Golden Living to Skyline that was filed with other court paperwork [Victoria Lusk, “Company That Placed ‘Residents at Risk,’ No Longer Operates 19 SD Nursing Centers,” Aberdeen American News, 2018.05.01].

And Skyline is stiffing more entities than just Golden Living. Ask the nursing assistants’ union in Pennsylvania:

Closer to Philadelphia, Skyline in February 2017 took over seven Golden Living nursing homes, including four — in Doylestown, Rosemont, Reading, and Lancaster — where nursing assistants are represented by SEIU Healthcare of Pennsylvania. Union officials said Skyline has not paid into the workers’ training and education fund and owes workers’ dues to the union. Under a settlement, Skyline was supposed to make an initial dues payment on Feb. 15, but the union has yet to receive it [Harold Brubaker, “Questions About Willow Terrace Owner After Nursing Home Collapse in Nebraska and Kansas,” Philadelphia Inquirer, 2018.04.12].

Ask 1,650 nursing home workers in Nebraska, where Skyline operated as Cottonwood:

About 1,650 nursing home workers in Nebraska whose employer failed to pay them last month received paychecks this week, according to the court-appointed receiver managing the facilities.

Ken Klaasmeyer of Klaasmeyer & Associates Inc. said payroll went out Friday. The Omaha health care consulting firm was put in charge of the nursing homes after state officials were alerted March 23 that the company would be unable to pay its employees.

…Many of the communities have organized fundraisers to help provide them with some additional funds [Julie Anderson, “About 1,650 Nebraska Nursing Home Workers Are Paid After State Steps In,” Omaha World-Herald, 2018.04.07].

Ask vendors in Kansas:

For former administrators at Skyline’s Kansas nursing homes, the company’s brief presence in the state was troubling.

“It’s a group of good ol’ boys from the East Coast buying up a whole bunch of nursing homes in the Midwest because we’re the cheaper ones,” said Carol Tsiames, a former administrator at the Kaw River Care & Rehabilitation Center in Edwardsville, who left about eight months after Skyline took over.

“They abuse the system. Encourage you to use local vendors, and then they don’t pay. … It puts an administrator in a bad position.”

Sometimes, Tsiames said, she would go to the bank to cash her paychecks and they would bounce.

Once, a food vendor stopped delivering because they weren’t paid, so staff had to buy bread for nursing home residents with petty cash, she said. But then the petty cash would run out.

“What their pattern is is they wait until the very last minute, only when they get to the point they’re going to shut something off, that’s when they’d pay,” she said [Ryan and Marso, 2018.04.16].

The immediate step is to make sure all those nursing home residents get the food, medicine, and other supplies they need. The long-term step will be to tally up the bill Skyline hangs on South Dakota taxpayers and determine what regulatory failings allowed a resource-poor East Coast speculator to take charge of multiple nursing homes in our state.


  1. Nick Nemec 2018-05-02 07:50

    Cory, do you have a complete list of the nursing homes and assisted living centers in question? Do you know where such a list can be found?

  2. mike from iowa 2018-05-02 08:58

    Nick there are 18 former Golden Living facilities listed in South Dakota Nursing Home inspection report.

    Facilities listed in Armour, Arlington,Clark, Groton, Ipswich, Lake Norden, Madison, Milbank, Mobridge, Pierre, 4 in Rapid City, Redfield, Salem, Sioux Falls (Covington Heights) and Watertown.

    Hope this helps.

  3. jerry 2018-05-02 09:29

    Check out their health plans as well. These guys have been getting away with screwing taxpayers for years. Only republican governors would allow the outright graft of the shell game these slick operators are playing.

  4. Cory Allen Heidelberger Post author | 2018-05-02 12:42

    Good list, Mike! The Philadelphia Inquirer article has a list of Schwartz/Skyline-owned facilities that Schwartz submitted to Pennsylvania investigators, but it does not include any South Dakota properties… perhaps aligning with the statement above that Skyline was only leasing the SD Golden Living properties.

  5. Buckobear 2018-05-02 17:52

    Seems that (once again) the use of the word “Healthcare” in a company name really means “just give us the money.”

  6. Mr. SOL 2018-05-02 18:32

    Somewhat shocked about this one. What would Teddy Roosevelt have done?

  7. Kathy Gustafson 2018-05-03 16:09

    That’s very sad to hear. My mother spent her last years in the Lake Norden Golden Living. She received outstanding care. It truly was a home atmosphere for the residents.

  8. mike from iowa 2018-05-03 16:56

    From what I can find, Skyline leased in South Dakota and possibly Kansas, but apparently owned the facilities in Nebraska. Kansas sez Skyline operated the facilities there.

    Whatever, it is a mess and shows the obvious need for REGULATIONS and serious oversight.

  9. Cyndi 2018-06-07 12:43

    This doesn’t even touch on the fact that Skyline was misusing money deducted from payroll checks for employees then not paying the premiums. Or better yet operating without proper state regulated workers comp!
    I want to know who is responsible for ongoing claims!!!

  10. Laurie Friello 2018-06-22 12:20

    Replying to Cyndi. This was happening with a facility that they managed in upstate New York as well. Not operating with workers comp, not paying vendors, not paying premiums of employees health insurance. Offering self-insured health insurance and not paying claims. Now they have dissolved. Who is going to hold them accountable for the facilities that they owned or managed in Nebraska, South Dakota, Arkansas, Pennsylvania, New Jersey, Massachusetts, New York???
    How did the Department of Health in all these states allow them to manage a facility and put employees and residents at risk?

Leave a Reply

Your email address will not be published.