Convenant residents could recover partial deposits in suit

Convenant residents could recover partial deposits in suit

Residents of the former Covenant at South Hills can finally anticipate recovering some of the money they thought was lost when the B’nai B’rith-sponsored senior living facility was sold in bankruptcy last year to Concordia Lutheran Ministries.
In a document jointly filed last week in federal court, lawyers for both the residents and those parties whom they are suing — including B’nai B’rith International and its officers and directors — stated that the they had “reached an agreement on the monetary terms of a settlement, subject to memorialization in a writing setting forth the other terms.”
While the specific terms of the agreement are to remain confidential until they are finalized in a written agreement, lawyers for the residents say their clients are pleased with the proposal.
“We have had a very positive reaction so far,” said Howard Louik, attorney for some of the plaintiffs.
Residents and former residents of the facility filed two separate class-action lawsuits against B’nai B’rith and its affiliates over a year ago. Those suits were then consolidated into a single action seeking to recover millions of dollars in entrance fee deposits paid by the residents when they first purchased their interests in the continuing care retirement community in Mt. Lebanon.
The complaints alleged that 90 percent of those fees were supposed to be refunded to residents under certain conditions.
The Covenant, which was plagued by financial problems since its opening in 2002, filed for bankruptcy protection in January 2009, and the facility was sold by order of the court nine months later to Concordia. Under the terms of Concordia’s purchase agreement, it was not required to refund the residents’ deposits.
If all goes as planned, residents will recover a portion of their deposits, some of which exceeded $300,000.
“We are close to settlement,” said Michael Plummer, another attorney for the residents. “We shook hands on it. The only question is, can we write down the agreement we think we have? There is no doubt we have a complete agreement on the monetary terms. It is a safe inference that the residents will be getting money back.”
Although the residents do not yet know exactly how much of their money they will recover, “the general tenor of the residents is surprise that we’re getting anything at all,” said resident Maury Deul.
“Whatever it is, it’s better than a poke in the eye with a sharp stick,” he added, noting that the amount recovered will depend on several factors, including the cost of the lawsuit and attorneys’ fees.
Attorneys for the residents have hammered out an initial draft of the settlement document, which is currently being reviewed by the attorneys for the defendants before it is finalized, Plummer said.

(Toby Tabachnick can be reached at

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