Trends in Long-Term Care - U.S. Senate Special Committee on Aging

2898
Now, ODC, Inc., we know is another Bergman company. The
mortgage is $817,000 and 4 months later, an additional mortgage was
granted from K<strong>in</strong>gsby Realty Corp. to ODC, Inc., another Bergman
company, for an additional $100,000.
The total for all of the mortgages outstand<strong>in</strong>g for 1964, was $1.2
million. This is all <strong>in</strong> a build<strong>in</strong>g worth $300,000 <strong>in</strong> 1957, with $250,000
worth of renovation.
In 1966, just before the medicaid reimbursements began to affect
these, we have an additional mortgage, aga<strong>in</strong> to ODC, Inc., for $75,000,
which <strong>in</strong>creased the total <strong>in</strong>debtedness on the build<strong>in</strong>g to $1.3 million,
and it has rema<strong>in</strong>ed relatively constant s<strong>in</strong>ce then.
There has been an additional $15.000 mortgage along the way, right
over here <strong>in</strong> 1970, but that is m<strong>in</strong>or compared to everyth<strong>in</strong>g else.
Now,. down here, when the mortgage was at its greatest peak, $1.3
million, the mortgages that wvere outstand<strong>in</strong>g, almost a million dollars
of them, everyth<strong>in</strong>g but this one portion to that one sav<strong>in</strong>gs and loan
association were loans from Bergman to himself, so we don't know,
-there clearly was no lend<strong>in</strong>g <strong>in</strong>stitution <strong>in</strong>volved here, so we don't
know that the build<strong>in</strong>g actuallv could have supported the debt, if it
had been taken to a commercial lend<strong>in</strong>g <strong>in</strong>stitution.
We don't know what sort' of monev wlas exchanged between the companies
to this, or <strong>in</strong>deed if any was exchanged. We merely know that
an encumbrance was placed upon the land.
In 1966, we have the mortgage value of $1.3 million. Two years later
after the beg<strong>in</strong>n<strong>in</strong>g of the medicaid program, we have a lease entered
<strong>in</strong>to between K<strong>in</strong>gsby Realty Co., the owner at that time, to K<strong>in</strong>gsby
Realty, I am sorry, to Willoughby Corp.
Willoughby Corp. is owned by a Mr. Goldberg, a Max Goldberg,
and a Benjam<strong>in</strong> Farber.
They, <strong>in</strong> the same year, 2 months after they leased the property
for $105,000, thev subleased it to themselves for $141,000.
No, I am sorry. They subleased it to a company that they had for
the same rent, for $105,000.
Later that year, thev subleased to themselves as <strong>in</strong>dividuals, for
$141,000, an <strong>in</strong>crease between this lease and this lease, for $40,000, and
both leases be<strong>in</strong>g entered <strong>in</strong>to by the same <strong>in</strong>dividuals.
They then further amended their lease the follow<strong>in</strong>g vear to <strong>in</strong>crease
the rent from $141,000 to $184,000 an <strong>in</strong>crease from here to
here, of $43,000.
The last application that comes here is the application of Jerome
Mann, who wishes to become a one-third partner <strong>in</strong> this nurs<strong>in</strong>g home
for a total cost of $80,000, so he was will<strong>in</strong>g to put $80,000 to come
<strong>in</strong>to here.
This application I believe was denied by the State department of
health, which I will get <strong>in</strong>to <strong>in</strong> a second.
The other sale that we have go<strong>in</strong>g on here is this lease position here,
which is where vou have a guaranteed <strong>in</strong>come. You have a lease that
required somebody to pay youv Goldfarb Realty Co.. to pay this person
$148,000, and this person has an obligation to pay this company
$105,000.
This lease position was sold, it was sold to this person as a bus<strong>in</strong>ess
<strong>in</strong>vestment.