RACINE — The residents of the Atrium will have their own lawyer to speak for them in the ongoing receivership case, a judge has ruled.
Meanwhile, the receiver is expecting multiple purchase offers as soon as this week for the Atrium and Bay Pointe, the two properties enmeshed in the receivership.
The 74-unit Atrium senior-living facility, 3900 N. Main St., and 40-unit assisted-living center Bay Pointe, 3950 N. Main St., make up the nonprofit Atrium of Racine. In late May Watertown-based Marquardt Management Co., which had been managing the Atrium and Bay Pointe for about the previous year, filed for receivership, a declaration of insolvency.
The receivership appears to threaten the ability of Atrium residents to recoup the entrance fees they paid when they signed contracts to live there. Those amounts were as high as $111,000 or more in some cases.
In front of a full courtroom on Wednesday, Racine County Circuit Court Judge David Paulson ruled in support of a request by attorney Randall Crocker, who is representing one Atrium resident, for a lawyer to represent the residents collectively.
Paulson made clear that the attorney will speak for the residents but strictly in an advisory role, and not have the power to meddle in receiver Michael Polsky’s work.
The Atrium lawyer will be provided at no cost to the residents — rather, their representative will be paid for out of the case’s assets with a $30,000 cap on legal fees for the life of the receivership.
Polsky has been marketing the Atrium properties nationally and expects several purchase letters of intent to come in very soon, said attorney C.J. Murray who works with Polsky. The deadline for those offers is Wednesday, then Polsky will have 60 days to review them.
Polsky is trying to sell the Atrium of Racine as a going concern and use that sale to repay creditors.
According to the receivership filing, liabilities totaled about $14 million including: resident entrance fees, deposit fees and trust funds totaling about $7.5 million; and about $6.1 million owed to The Bank of New York Mellon Trust Co., the first lien holder.
Atrium residents have filed at least 67 claims totaling more than $7 million. Throughout the case, there have been many questions about where that money is or went.
Murray said at one point during Wednesday’s hearing, “We have not found a pot of money ... or any bad actors.”