Manhattan Supreme Court Justice Peter Sherwood (See Profile) has ruled that real estate investor Rubin Schron can acquire Sava Senior Care, which operates nearly 170 nursing homes, through his company CamEquity Holdings by assuming $100 million of outstanding debt. The ruling in Schron v. Grunstein, 650702/10, follows a 10-day non-jury trial.
Schron financed the $1.3 billion purchase of Sava by Leonard Grunstein and Murray Forman in 2004. Under the parties’ agreement, Schron acquired Sava’s nursing home real estate and the option to acquire Sava itself for $100 million. When Schron tried to exercise that option, Grunstein and Forman claimed that he had failed to fund a $100 million loan he agreed to extend. However, Sherwood said the evidence presented at trial did not support that claim. He ruled that the loan had been funded and was still outstanding, and that Schron’s company could acquire Sava by assuming the debt.
“The mendacity of Grunstein and Forman entitles their testimony to be given no weight,” Sherwood wrote. “Their shifting explanations and the difficult to imagine contention that a $100 million loan that was documented and relied upon for years by numerous sophisticated parties went unfunded is not credible. Even if the court were inclined to give some weight to defendants’ assertion that the $100 million was not funded, that testimony is inadmissible. The loan documents are fully integrated contracts, which may not be modified by parol evidence.”