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UNITED STATES BANKRUPTCY COURT

NORTHERN DISTRICT OF GEORGIA

ATLANTA DIVISION

IN RE: : CASE NO. 11-85462-PWB

:

SUBACUTE SERVICES, INC., : CHAPTER 11

:

Debtor. : JUDGE BONAPFEL

_____________________________________ :

:

ELIZABETH COSTLOW, Administrator :

of the Estate of Ruby Mae Tyler, :

:

Movant, :

:

Vs. :

:

SUBACUTE SERVICES, INC., :

:

Respondent. :

______________________________________:

MOTION TO APPOINT CHAPTER 11 TRUSTEE

PURSUANT TO 11 U.S.C. § 1104(a) and (b)

ELIZABETH COSTLOW, as Administrator of the Estate of RUBY MAE TYLER, Deceased (“Movant”), a creditor and a party in interest, by and through her undersigned counsel, moves this Court to appoint a Chapter 11 Trustee in this bankruptcy case pursuant to 11 U.S.C. § 1104(a) and (b), on the grounds that the Debtor SUBACUTE SERVICES, INC., and its principal and CEO, Richard W. Wolfe (also referred to as “Wolfe”), have committed acts constituting fraud, dishonesty, and gross mismanagement of the affairs of the Debtor, and such appointment is in the best interests of creditors.

This Motion is based upon the following memorandum of points and authorities, the attached exhibits, and oral argument that the Court may allow at a hearing on this Motion.

JURISDICTION AND VENUE

This Court has jurisdiction over this Motion pursuant to 28 U.S.C. §§ 157 and 1334. Venue is proper in the Northern District of Georgia pursuant the Order Transferring Venue of Judge John K. Olson [Docket No. 99], and pursuant to 28 U.S.C. §§ 1408 and 1409. This subject matter of this Motion is a core proceeding pursuant to 28 U.S.C. § 157. The statutory predicates for the relief requested herein are 11 U.S.C. §§ 105(a) and 1104(a) of the Bankruptcy Code.

MEMORANDUM OF POINTS AND AUTHORITIES

Introduction and Procedural History

The Debtor is a corporate entity that is wholly-owned by a single shareholder, Richard W. Wolfe. Until the filing of the instant chapter 11 petition, the Debtor operated as a manager and provided back-office support to six (6) nursing home facilities, all owned by entities which are in turn wholly-owned or controlled by the Debtor’s sole shareholder, Richard W. Wolfe. The nursing home facilities managed by the Debtor include: (a) SAS Mount Berry, Inc., db/b/a Summit Health & Rehab, located in Rome, Georgia; (b) SAS Rockmart, Inc., d/b/a Rockmart Nursing & Rehab, located in Rockmart, Georgia; (c) Countryside Health Center, Inc., located in Buchanan, Georgia; (d) Sunrise Health Center, Fort Lauderdale, Florida; (e) SAS Brunswick, Inc., d/b/a Prime Care Georgia, located in Brunswick, Georgia; and (f) SAS Moran Lake, Inc., d/b/a Evergreen Health & Rehab, located in Rome, Georgia. Five of the nursing homes are located in the Northern District of Georgia and the sixth home is located in the Southern District of Florida.

A wrongful death lawsuit was filed by Movant against multiple defendants, including the Debtor, in the Superior Court of Polk County, Georgia. The negligent conduct occurred at a nursing home located in Rockmart, Georgia called “Rockmart Nursing and Rehab,” owned by SAS Rockmart, Inc. The case was tried before a jury from May 9, 2011 until May 17, 2011. On May 17, 2011, the jury returned a verdict in favor of Movant, holding the Debtor responsible for the death of her mother, Ruby Mae Tyler, and awarding damages in the amount of two million dollars ($2,000,000.00). The amount of pre-judgment interest added to the Judgment was $74,666.67. A copy of the Judgment, in the total amount of $2,074,666.67, is attached hereto as “Exhibit A.” On June 24th, 2011, the Superior Court issued an order requiring the Debtor to post a supersedeas bond by July 6th, 2011. The Debtor SAS has never filed its supersedeas bond as per the Superior Court’s order.

On July 25, 2011, Movant filed a Motion for Appointment of a Receiver in the Superior Court of Polk County, along with a Brief and Proposed Order. (“Exhibit B.”) The Motion was filed after Movant discovered the Debtor abruptly closed its principal office in Lilburn, Georgia, was boxing the contents of that office, and upon information and belief,[1] was transferring its assets to other persons or entities in an effort to hinder, delay or defraud Movant and other creditors. (See affidavits of Michael A. Prieto and Arthur T. Schofield attached to the Motion for Appointment of Receiver as “Exhibit 1” and “Exhibit 2,” along with photographs attached to the Brief in Support of Motion for the Appointment of Receiver.)

A hearing on the Motion for Appointment of Receiver was scheduled for Tuesday, August 2, 2011, in the Superior Court of Polk County.

On July 28, 2011, exactly three (3) days after the filing of the Motion for Appointment of Receiver, Debtor filed its 2011 annual registration with the Georgia Secretary of State, suggesting that it had moved its principal office to 4800 Nob Hill Road, Sunrise, Florida. The following day, on July 29, 2011, the Debtor filed the instant petition for relief under Chapter 11 of the Bankruptcy Code in the Southern District of Florida, and notified Movant that any continuation of the Motion for Appointment of Receiver would be prosecuted as a violation of the automatic stay.

On August 17, 2011, Movant, by and through undersigned counsel (admitted pro hac vice) filed a Motion to Transfer Venue of this chapter 11 case from the Southern District of Florida, to the Northern District of Georgia. After hearing arguments of counsel, Hon. John K. Olson entered an Order Transferring Venue to the Northern District of Georgia. A copy of Judge Olson’s Order is attached hereto as “Exhibit C.” The Debtor filed a Notice of Appeal to District Court. The Debtor also filed a Motion for Stay Pending Appeal, which was denied by Judge Olson after a hearing. The Debtor filed a similar Motion for Stay Pending Appeal with the District Court, which was denied by Judge Kenneth A. Marra. A copy of Judge Marra’s Order is attached hereto as “Exhibit D.” The case was finally transferred to the Northern District of Georgia on or about December 5, 2011.

Movant, by and through undersigned counsel, has requested available dates for a Rule 2004 examination of Richard W. Wolfe, but those requests have been ignored or denied for a variety of reasons[2].

Standard of Review

Section 1104(a)(1) of the United States Bankruptcy Code provides for the appointment of a trustee in a Chapter 11 case:

At any time after the commencement of the case but before confirmation of the plan, on request of a party in interest or the United States trustee, and after notice and a hearing, the court shall order the appointment of a trustee –

1) for cause, including fraud, dishonesty, incompetence, or gross mismanagement of the affairs of the debtor by current management, either before or after the commencement of the case or similar cause, but not including the number of holders of securities of the debtor or the amount of assets of liabilities of the debtor;

2) if such appointment is in the interests of creditors, any equity security holdeers, and other interests of the estate, without regard to the number of holders of securities of the debtor or the amount of assets or liabilities of the debtor. .

11 U.S.C. § 1104(a).

Subsection (a)(1) mandates appointment of a trustee for cause, and provides a nonexhaustive list of conduct warranting such appointment. See, In re SunCruz Casinos, LLC, 298 B.R. 821, 828 (Bankr. S.D.Fla. 2003) (emphasis added). Additional factors affecting a court's decision to appoint a trustee include:

(a) Materiality of the misconduct;

(b) Evenhandedness, or lack of same, in dealings with insiders or affiliated entities vis-a-vis other creditors or customers;

(c) The existence of pre-petition voidable preferences or fraudulent transfers;

(d) Unwillingness or inability of management to pursue estate causes of action

(e) Conflicts of interest on the part of management interfering with its ability to fulfill fiduciary duties to the debtor; and

(f) Self-dealings by management or waste or squandering of corporate assets. In re Intercat, Inc. 247 B.R. 911, 921 (Bankr. S.D. Ga. 2000); SunCruz Casinos, LLC, 298 B.R.

at 830.

Whether there are sufficient grounds for appointment of a trustee under § 1104(a)

is a matter for the Court's discretion. See, In re American Preferred Prescription, Inc., 250 B.R.

11, 15-18 (E.D.N.Y. 2000) amended on other grounds, 265 B.R. 13 (E.D.N.Y. 2000), judgment

reversed on other grounds, 255 F.3d 87 (2d Cir. 2001) (explaining when a trustee may be

appointed under § 1104(a) of the Bankruptcy Code); In re Anchorage Boat Sales, Inc., 4 B.R.

635, 644 (Bankr. E.D.N.Y. 1980) (same); In re L.S. Good & Co., 8 B.R. 312, 314 (Bankr.

N.D.W.Va. 1980) (same).

As explained below, the factors for the appointment of a chapter 11 trustee as set forth in 11 U.S.C. § 1104(a) are satisfied in this case.

Argument

I. A CHAPTER 11 TRUSTEE SHOULD BE APPOINTED FOR CAUSE, BECAUSE CURRENT MANAGEMENT, RICHARD WOLFE, HAS COMMITTED ACTS OF FRAUD, DISHONESTY, INCOMPETENCE, AND GROSS MISMANAGMENT.

Section 1104(a) provides for the appointment of a trustee where there is fraud, dishonesty, incompetence, or gross mismanagement of the affairs of the debtor by current management, either before or after the commencement of the case, or for “similar cause.” 11 U.S.C. § 1104(a). In this case, there are numerous acts taken by the Debtor, vis-à-vis Richard W. Wolfe amounting to fraud, dishonesty, incompetence, and gross mismanagement:

A. Debtor’s Scheme to leave Debtor without Sufficient Assets or Revenue to Pay Creditors.

The Debtor’s Florida bankruptcy counsel argued at the hearing on Movant’s Motion to Transfer Venue, that the Debtor was “shifting” or “transitioning” its function from management of nursing homes, to a function of “litigation support” or “litigation consulting.” As part of that “transition,” the proffer to Judge Olson was that Wolfe and/or the entities wholly-owned by him, terminated the Debtor’s management contracts, effectively terminating the Debtor’s revenue. Movant is under the impression and belief that Wolfe has formed a new company to perform the nursing home management functions of the Debtor, and has transferred those management contracts to the new entity. Appointment of a trustee is necessary to protect creditors from this type of misconduct.

Judge Olson’s findings of fact and conclusions of law in his Order Transferring Venue to the Northern District of Georgia express grave concern: “[T]he Debtor’s cessation of operations, termination of employees, and transmission of books and records from Georgia to Florida, together with Mr. Wolfe’s decision to terminate the Debtor’s contracts with the affiliated entities which he also controls, all constitute improprieties which will need to be explored in the course of this chapter 11 case.” [Olson Order Transferring Venue, p. 4] Because those improprieties need to be explored, the Debtor and Wolfe – the parties responsible for those improprieties - can not be entrusted. Movant is convinced that Judge Olson was suggesting that appointment of a chapter 11 trustee was appropriate under the circumstances.

Movant avers that Wolfe is not a true fiduciary to the estate or creditors. To the extent that unilateral or bilateral termination of the management contracts were fraudulent or unlawful, only a true fiduciary – a chapter 11 trustee – would take appropriate action for the benefit of creditors.

B. Wolfe’s Use of Company Funds to Pay Himself an Exorbitant Salary.

The Movant’s investigation in the Polk County litigation revealed disturbing information relating to Wolfe’s depletion of the Debtor’s capital. Wolfe was paid $60,000 per month, or $720,000 per year, from 2006 through 2010.[3] The Debtor’s cost reports for 2006, 2007, 2008, 2009 and 2010 are attached hereto as “Exhibit E.”

The Debtor’s cost reports further show “travel/entertainment” expenses in the following amounts:

2006: $232,528

2007: $224,454

2008: $136,495

2009: $169,286

Interestingly, when the Debtor changed accountants in 2010, the cost reports revealed, for the first time, “travel and transportation” costs of $187,059 for Wolfe’s unnecessarily-luxurious travel aboard a private aircraft. (See last page of “Exhibit E.”)

Payment of excessive salaries is demonstrative of self-dealing and squandering of corporate assets, justifying appointment of a chapter 11 trustee. In re Boineau’s Inc., 956 F.2d 1162, (C.A.4 2d, 1992); Matter of Holly’s, Inc., 140 B.R. 643 (Bankr. W.D. Mich. 1992) (immense salary considered cause to appoint chapter 11 trustee). Wolfe’s use of the Debtor’s assets for his own benefit and expenses, by causing the Debtor to pay an excessive salary “could be viewed as a breach of his fiduciary duties to the Debtor corporation and its creditors,” and constitutes unjust enrichment under State law. See, In re Harry Levin, Inc., 175 B.R. 560 (Bankr. E.D. Pa. 1994).

In the course of preparing for the receivership motion, Movant interviewed several proposed receivers (fiduciaries) that would also be willing to serve as a chapter 11 trustee. The proposed fiduciaries had ample expertise in the area of health care management, and in light of the exorbitant salary that was being paid to Wolfe, the proposed fiduciaries could reorganize the debtor at a substantial cost savings to the Debtor and its creditors.

C. Incompetence and Gross Mismanagement.

1. Inadequate Resources and Capital to Provide Patient Care.

Wolfe’s management of the nursing home (or lack thereof), along with his depletion and waste of revenues, has left the nursing homes with inadequate staff and resources to provide adequate care for the patients. In fact, the Polk County jury awarded the Movant $2,000,000.00 to compensate Movant as a result of the Debtor’s gross mismanagement.

In addition to her judgment, Movant is aware of multiple litigation matters against the nursing homes managed by the Debtor, all pending or proceeding within the State of Georgia, relating to negligence resulting in the death of Georgia residents. The following is a non-exhaustive list of known claims against the Debtor and the affiliates it managed:

(a) Claims against SAS Mount Berry, Inc d/b/a Summit Health & Rehab: 

(i) Siegel, Solomon, by Elaine Siegel, next of kin (decubitus ulcers):  This is a claim in which Mr. Siegel was admitted to the Summit facility for short-term rehabilitation after suffering a mild stroke.  The facility was intentionally understaffed in an effort to increase profits.  As such there was insufficient staff to ensure that he was properly turned and repositioned every two hours as required by state and federal regulations.  As a result, he was allowed to develop a stage-4 decubitus ulcer which lead to sepsis and caused his death.  (Civil Action File No.:  10-CV-03592, Floyd County Superior Court, Rome, Georgia.)

 

(ii) Levy, Mary Katherine, by Dean Dobbs, next of kin (skull fracture):  This is a claim in which Ms. Levy, who was ambulatory but a fall risk, pressed a call button for half an hour to request assistance to travel from her bed to her bathroom.  The call was ignored and Ms. Levy attempted to walk by herself.  She subsequently fell on the floor fracturing her skull.  She and her roommate called for help for almost one-half an hour.  A CNA finally arrived after being outside the facility smoking a cigarette and talking on a cell phone.  The CNA was unable to find a nurse on the wing of the facility.  The nurse on duty on the other wing of the facility eventually responded and Ms. Levy was transported to a local hospital where she died as a result of her injuries. A motion to lift the stay to liquidate this claim will be filed in the pending bankruptcy in the coming days, but the witnesses are all located in the State of Georgia.

(iii) Edge, David, by Debra Vanhorn, next of kin (decubitus ulcers & starvation):  This is a claim in which Mr. Edge was a resident at the Summit who was totally dependent upon the staff for all daily living activities, including feeding.  The facility was intentionally understaffed in an effort to increase profits.  As a result, he was allowed to lose in excess of one hundred pounds in several months causing him to be severely nutritionally compromised.  He was not properly turned and repositioned every two hours as required by state and federal regulations.  As a result, he was allowed to develop a Stage-4 decubitus ulcer which lead to sepsis and caused his death.  A motion to lift the stay to liquidate this claim will be filed in the pending bankruptcy in the coming days, but the witnesses are all located in the State of Georgia.

(iv) Logan, Genelma, by Danny Logan, next of kin (aspiration) This is a claim in which Ms. Logan was a resident at this facility who had a well established diagnoses which necessitated aspiration percussions.  The facility was intentionally understaffed in an effort to increase profits.  Ms. Logan was taken to the cafeteria placed at a table with food and left without assistance to eat.  Ms. Logan attempted to self-feed.  No staff members were supervising her and she aspirated eventually leading to her death. A motion to lift the stay to liquidate this claim will be filed in the pending bankruptcy in the coming days, but the witnesses are all located in the State of Georgia.

(v) Overby, Luther, by Harold Overby, next of kin (broken hip) This is a claim in which Mr. Overby was admitted to the facility with a significant history of falls.  The facility was on notice of this condition and failed to implement appropriate fall precaution as required by state and federal regulations.  Mr. Overby was allowed to fall on numerous occasions culminating in a fall that resulted in a broken hip.  Unfortunately, Mr. Overby died as a result of this injury.  A motion to lift the stay to liquidate this claim will be filed in the pending bankruptcy in the coming days, but the witnesses are all located in the State of Georgia.

(vi) Morrow, Betty:  This is a claim in which Ms. Morrow was admitted to this facility for rehabilitation secondary to an unrelated fracture of her hip.  The facility was intentionally understaffed in an effort to increase profits.  As a result, she was not properly turned and repositioned every two hours as required by state and federal regulations.  As a result, she was allowed to develop a stage-4 decubitus ulcer.  The ulcer was not properly treated and resulted in osteomyelitis and sepsis, causing her death.  A motion to lift the stay to liquidate this claim will be filed in the pending bankruptcy in the coming days, but the witnesses are all located in the State of Georgia.

 

(b) Claim against SAS Rockmart, Inc. d/b/a as Rockmart Nursing & Rehab:

          

Tyler, Ruby– Elizabeth Costlow (Movant) (decubitus ulcers/amputation) This is a claim in which Ms. Tyler was admitted after suffering a broken femur from a fall in a previous facility. The facility was intentionally understaffed in an effort to increase profits.  As a result, she was not properly turned and repositioned every two hours as required by state and federal regulations.  As a result, she was allowed to develop a numerous State 4 decubitus ulcers.  The ulcers were not properly treated and allowed to digress into sepsis and caused her death.  Unlicensed CNAs were providing wound-care and the plaintiff was able to prove over 60 instances of charting fraud by the facility.  This claim was tried to a jury which awarded the plaintiff $2,000,000.00.  (Civil Action File No.:  2009-SU-CV-756, Polk County Superior Court, Cedartown, GA)

Gurley, Melva Joyce, by Anna Waters, next of kin (necrotic decubitus ulcer) Mrs. Gurley was admitted to Rockmart Nursing and Rehab in April, 2007, with no skin problems upon admission. Mrs. Gurley’s charts indicate that her skin changed from a reddish color on her buttocks on November 20, 7007, to an open black area one week later. There is no documentation whatsoever of turning or repositioning, or change in treatment. Charts indicate that the Defendant neglected the dietician’s recommendations, and Mrs. Gurley suffered from malnutrition, in part because Mr. Wolfe drained funds from the facility, leaving the operations of the facility under-funded. Plaintiff’s experts executed affidavits citing multiple failures on behalf of the staff in providing care to Mrs. Gurley. She was admitted to Polk Medical Center on January 19, 2008, and diagnosed with pneumonia, a severe urinary tract infection, an infected sacral decubitus ulcer, acute renal failure, anorexia and dehydration. Mrs. Gurley passed away just 1 and ½ days after admission. This case is very similar to the Tyler case, which resulted in a jury verdict in the amount of $2,000,000.00.

          (c) Claim against Countryside Health Center, Inc.:

         

 High, Betty Jean, by Veronica Florence, next of kin (decubitus ulcers) This is a case in which was admitted to the facility with numerous comorbidities.  The facility was intentionally understaffed in an effort to increase profits.  As a result, she was not properly turned and repositioned every two hours as required by state and federal regulations.  As a result, she was allowed to develop a numerous State 4 decubitus ulcers.  The ulcers were not properly treated and allowed to digress into sepsis and caused her death.  (Civil Action File No.:  2009-CV-288, Haralson County Superior Court, Buchanan, Georgia.)

2. Inadequate Insurance Converage..

The Debtor, and the entities it manages, failed to carry adequate liability insurance. Movant was notified that the Debtor and the nursing homes had no insurance available to cover her judgment. Wolfe’s “management,” has resulted in numerous lawsuits and claims for wrongful death against the Debtor. The incompetence of Wolfe and the Debtor has resulted in substantial and unnecessary loss of life, and consequently, multiple wrongful death claims. Unless a chapter 11 trustee is appointed, the Debtor and Wolfe have absolutely no capacity or intention of providing adequate care or compensation for the victims. A true fiduciary would, at a minimum, take appropriate measures to provide liability insurance.[4]

II. A CHAPTER 11 TRUSTEE WILL BE ABLE TO RECOVER AND PRESERVE ASSETS FOR THE REORGANIZATION OF THE DEBTOR AND PROVIDE PAYMENT TO CREDITORS.

Section 1104(b) provides for the appointment of a trustee “if such appointment is in the interests of creditors.” 11 U.S.C. § 1104(b). Appointing a chapter 11 trustee would provide the Debtor with a true fiduciary to the bankruptcy estate. A true fiduciary is necessary to recover and preserve assets for the reorganization of the Debtor, and to provide payment to creditors. Sepcifically, a trustee would be authorized to assert the following claims:

A. Action Against Wolfe for Misappropriation of Corporate Assets.

As a general rule, a claim for misappropriation and waste of corporate assets by a director or officer of a corporation belongs to the corporation and not to its shareholders, and third parties will not be allowed to recover directly. Pickett v. Paine, 230 Ga. 786, 790, 199 S.E.2d 223 (1973); Thrift v. Maxwell, 162 Ga. App. 237, 290 S.E.2d 301 (1982).

The law firms of Perrotta, Cahn & Prieto, P.C. and Watkins, Lourie, Roll & Chance, P.C., (“the law firms”) have drafted a complaint against Wolfe and others to pierce the corporate veil, and to recover damages for misappropriation of corporate assets. A copy of the proposed Complaint is attached hereto as “Exhibit F.” (The complaint will be amended by special counsel for the chapter 11 trustee to show that the Debtor is the proper Plaintiff, not Movant.)

The law firms[5] await appointment as special counsel by the chapter 11 trustee to prosecute derivative claims for the Debtor against Wolfe and others.

B. Recovery of Fraudulent Transfers and Preferences.

Judge Olson’s Order was clear - improprieties need to be explored. Following termination of management contracts, the Debtor has no legitimate business purpose, nothing to reorganize, and nothing to provide to creditors. Wolfe is not the proper fiduciary to address the improprieties that concerned Judge Olson. He will not recover fraudulent transfers. He will not recover preferences. He will not cause the Debtor to sue himself for misappropriation of corporate assets. To the contrary, he has demonstrated that he will take any and all measures within his power to frustrate the Debtor’s creditors. The Debtor’s conduct so far demonstrates as much.[6]

Conclusion

Cause exists for the appointment of a chapter 11 Trustee, due to the fraud, dishonesty, incompetence, and gross mismanagement of the affairs of the Debtor. The appointment of a chapter 11 Trustee is also critical, as the current management has no incentive to recover and preserve assets for the reorganization of the Debtor and/or provide payment to creditors.

WHEREFORE, Movant prays that the Court will (i) consider this Motion on an expedited basis; (ii) grant the Motion for Appointment of a Chapter 11 Trustee; and (iii) grant such other relief in favor of the Movant that is just, equitable and proper.

Date: December 13, 2011

Respectfully submitted:

PERROTTA, CAHN & PRIETO, P.C.

/s/ Brian R. Cahn _________

Brian R. Cahn

Attorney For Movant

Georgia Bar No. 101965

brc@

The Historic Bradley Building

5 South Public Square

Cartersville, GA 30120

(770) 382-8900

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true and correct copy of the foregoing was sent via first-class U.S. Mail this 13th day of December to all of the following parties:

Subacute Services, Inc.

4800 Nob Hill Rd.

Ft. Lauderdale, FL 33351-4722

William L. Rothschild

Ogier, Rothschild, Rosenfeld, Ellis-Monro

170 Mitchell Street, SW

Atlanta, GA 30303-3441

James B. Boone

P.O. Box 26646

Weston, FL 33320

United States Trustee

Attn: James H. Morawetz

362 Richard Russell Building

75 Spring Street, SW

Atlanta, GA 30103-3315

/s/ Brian R. Cahn _________

Brian R. Cahn

Attorney For Movant

Georgia Bar No. 101965

brc@

The Historic Bradley Building

5 South Public Square

Cartersville, GA 30120

(770) 382-8900

-----------------------

[1] Movant’s suspicions were confirmed by Debtor’s admissions in judicio at the hearing on Movant’s Motion to Transfer Venue, when Debtor’s counsel represented to Hon. John K. Olson that it and/or the nursing home facilities managed by the Debtor and also wholly-owned by Richard Wolfe, had cancelled all of the management contracts that provided the Debtor’s revenue.

[2] Wolfe primarily opposes a 2004 Examination because the Debtor is not represented by counsel. On November 9, 2011, Judge Olson entered an Order Granting the Debtor’s attorney’s Motion to Withdraw as Counsel for the Debtor. [S.D.Fla Docket No. 94.] The Order specifically instructed the Debtor to obtain new counsel in the Southern District of Florida and/or the Northern District of Georgia within fourteen (14) days. The Debtor seems to ignore the Order as a defense to Wolfe’s 2004 examination.

[3] Except for 2008, when Wolfe was “only” paid $710,000.

[4] Movant cannot fathom that it’s illegal to operate a motor vehicle in Georgia without liability insurance, but it’s somehow acceptable for a fiduciary to operate a nursing home with no coverage whatsoever.

[5] The law firms offer to serve as special counsel for the chapter 11 trustee on a contingency basis. Of course, the law firms understand that the chapter 11 trustee may choose any law firm as special counsel to prosecute these claims.

[6] Query: Why else would the Debtor file bankruptcy on the eve of appointment of a receiver? Why else would the Debtor file its petition in Florida? Why else would the Debtor file two (2) motions to stay the Order transferring venue, and appeal said Order? Why is the Debtor’s new counsel “unavailable” for an Expedited Hearing on this Motion, originally coordinated for December 20, 2011?

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