It comes as no surprise that the Covenant at South Hills has filed for protection under Chapter 11 of the Bankruptcy Code.
Putting the fate of this troubled senior community in the hands of a bankruptcy judge may even be the best thing to do at this time. A bankruptcy judge’s job, in part, is to protect those with a vested interest in the outcome. Who has more of a vested interest than the residents of the Covenant?
But as the process moves forward in the court, and as the Covenant attempts to reorganize, find a buyer or possibly liquidate its assets altogether, the Jewish community has a right to know how the Covenant came to this.
Covenant opened to much fanfare in 2002. At the time, B’nai B’rith, including then BBI International President Joel Klein, hailed it as a prototype for future senior living facilities.
But something went terribly wrong. The Covenant failed to make its debt service payments. Despite various attempts over time to restructure the bonds or find a suitable buyer for the facility, the Covenant was unable to find a viable solution to its financial problems.
Through it all, the Covenant was largely, though not entirely, silent about what was happening there — until this week when the Covenant President Alan Jacobs gave The Chronicle’s Toby Tabachnick an interview.
If this were any other entity, we probably wouldn’t make such a big deal out of it; companies go in an out of business all the time — that’s the free market we live in.
But the Covenant deals in a very special commodity — senior citizens, many of whom belong to the Jewish community.
Jacobs said the residents remain their top priority, and we believe him. But there should have been more transparency on the Covenant’s part as to its situation.
And since there wasn’t, there should have been more demands for that transparency from the greater Jewish community. It is, after all, our responsibility to look out for our seniors. They once looked out for us.
For now, the Covenant’s residents, some of whom have as much as $319, 000 invested in the facility, are taking matters into their own hands. They have hired their own attorney to insure their interests are protected, and they are seeking a seat on the Covenant’s board of directors, which currently lacks any members from the South Hills community.
That’s only fair. If the residents have a voice on the board of the Covenant, no matter how it is reorganized, many of the issues we see, at least, will be addressed. We hope the bankruptcy judge sees it the same way.