Cold Spring Bankruptcy Sale Revived After Union Standoff
America ı By Rihem Akkouche
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In a high-stakes courtroom showdown, Cold Spring Acquisition LLC, the bankrupt operator of Cold Spring Hills Center for Nursing & Rehabilitation, won crucial approval Thursday for the sale of its embattled 588-bed facility—halting a pending closure that could have displaced hundreds of elderly residents.
A New York bankruptcy judge gave the green light for the sale after a major roadblock—a fierce dispute with a healthcare workers’ union—was resolved, paving the way for 378Sywood LLC to take over operations.
A Race Against Time to Prevent Collapse
U.S. Bankruptcy Judge Sean H. Lane approved the receivership agreement and sale motion, setting the stage for Sywood to assume control of the Woodbury, New York-based nursing home. Initially, the sale seemed doomed after 1199SEIU United Healthcare Workers East objected to the deal in late January. The union raised alarms that Sywood’s proposed changes to an existing collective bargaining agreement—including new worker classifications, benefits reductions, and canceled wage increases—could trigger mass resignations or disruptive organizing activity.
Faced with mounting financial losses and an unresolved labor dispute, Cold Spring announced in February that the sale had collapsed and sought court approval to shut down the facility.
A Last-Minute Deal Keeps the Doors Open
However, with the clock ticking, negotiations between Sywood and the union intensified. Attorneys for both Cold Spring and Sywood confirmed at Thursday’s hearing that the buyer had successfully reached an agreement with the union, reviving the sale.
“The goal of the receiver and the buyer is to put in significant capital expenses, make significant improvements, and allow the facility to once again be occupied at full capacity,” said Schuyler G. Carroll of Manatt Phelps & Phillips LLP, representing Cold Spring. Without court approval, he warned, the facility would have closed, creating chaos for its vulnerable residents.
Following a brief recess in the hearing to finalize sale terms, Cold Spring requested immediate court approval to allow Sywood to assume operations under a receivership while state regulators review the sale. With no further objections raised, Judge Lane promptly signed off.
“No judge wants to preside over a case where an institution like this is closed. That’s not a result anyone is looking for, and you all have managed to give us a much better option,” Judge Lane said.
The Fallout of Financial and Legal Turmoil
Cold Spring’s descent into bankruptcy began in January, burdened with at least $58 million in debt. The company’s troubles deepened after a 2022 lawsuit from the New York Attorney General’s office accused the facility of providing substandard care, causing a mass exodus of residents and compounding its pandemic-driven financial distress.
With Sywood now at the helm and plans in place for a financial turnaround, the focus shifts to state regulators, who must approve the final sale. Until then, the facility—and its residents—remain in limbo.
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