MB retirement home owed over a million bucks and gave seniors 2 days to leave, suit says
A $1.5 million debt may have contributed to the abrupt closure of Magnolias Assisted Living last month, a lawsuit contends.
Pinnacle Bank filed a 16-page lawsuit against Magnolia Assisted Living Holding Company, LLC and other corporations that ran the home last Friday to foreclose on both the property and facility at 601 65th Avenue North in Myrtle Beach.
The suit, filed in Horry County, states Magnolia took out a $3 million commercial loan from Pinnacle Bank in 2008. As of Feb. 20, Magnolia still owed more than $1.5 million, according to the lawsuit.
While Magnolias Owner Ben Read surrendered the keys to Pinnacle after the home closed on Feb. 20, giving their elderly residents just 48 hours to vacate, Pinnacle attorney Douglas Zayicek said the facility closed before Pinnacle even called the loan in default. He said Pinnacle sent a default letter on Feb. 22.
Read had issued a letter to residents, families and employees on Feb. 18 informing residents they would have two days to move out. He claimed former administrator Denise Graham was to blame for the abrupt closure.
“While still employed by Magnolias, Denise proceeded to contact Magnolias residents and families telling them that their loved ones wanted to leave Magnolias and follow her to Carolina Gardens,” the letter stated. “We have lost virtually all of those residents which in turn decimated Magnolias cash flow to remain in operation.”
Read said the business lost over $40,000 in revenue when roughly 20 residents followed Graham to Carolina Gardens. The business also exhausted more than $35,000 in external borrowings and all personal and family funds 45 days prior to closure to maintain operations.
Read also said a potential sale fell through at the last minute.
While Read claimed Magnolias lost a large chunk of its senior population, a Magnolias employee told The Sun News last month that 12 seniors were still residing at the facility when Read sent his letter.
This story was originally published March 11, 2019 at 1:35 PM.
