Pittsburgh, Pennsylvania — The trustee unwinding the bankrupt remains of one of the East Coast’s most controversial nursing home networks is now accusing its top executives of running the chain like a personal piggy bank.
Robert Bernstein, the court-appointed trustee overseeing the liquidation of 22 affiliated nursing home companies tied to South Hills Operations and Comprehensive Healthcare Management Services (CHMS), filed an adversary complaint Thursday in the US Bankruptcy Court for Western Pennsylvania. The lawsuit names Ephram “Mordy” Lahasky, Samuel Halper, David Gast and Joshua Farkovits, along with a long list of affiliated management, holding and property entities, plus 50 unnamed John Does who allegedly received payments.
Bernstein’s accusation is blunt. The insiders, he wrote, “operated the enterprise with the aim of enriching themselves at the expense of the debtors, their creditors and the residents and communities served by the … nursing homes.”
A coordinated system, not a one-time mistake
The lawsuit argues the diversion wasn’t sloppy bookkeeping. It was a system.
According to the filing, operating companies sent roughly $5.7 million to CHMS and about $2.4 million directly to insider defendants in the four years before the bankruptcy petition. Property companies kicked in another $5.4 million in distributions over the same window — including $3.7 million in unallocated pro-rata payouts and at least $1.7 million in identified transfers.
What raised Bernstein’s eyebrows is the cadence. Payments moved on a recurring monthly basis, often through automated or centrally directed payment channels. “The consistency of the timing and amounts of these transfers across multiple OpCo Debtors reflects a centrally directed system of disbursements,” he wrote.
A history of legal hits
The complaint frames this as the latest chapter in a long pattern. CHMS-affiliated facilities have been hit before. Mt. Lebanon Operations was ordered to pay a civil monetary penalty and $2.7 million in restitution in a staffing and upcoding case. In 2024, a federal court hit CHMS and its 15 nursing homes with a $36 million judgment after finding the company “routinely” failed to properly compensate nearly 6,000 workers over six years.
Those judgments, Bernstein argues, weren’t garden-variety business debts. They came from “unlawful or improper payroll, staffing, recordkeeping, reimbursement, and operational practices” that ran across the enterprise. The new lawsuit echoes patterns seen in other recent enforcement actions targeting nursing home operators, where regulators are pushing back on diverted Medicaid dollars.
Lahasky’s reach in the sector is substantial. He or his family trust is linked by ownership or controlling interest to at least 116 nursing homes nationwide, federal data show. He and Halper have been named in earlier CHMS-related cases as well.
What the trustee wants
Bernstein is suing Lahasky and Halper for breach of fiduciary duty, arguing they exercised “actual, day-to-day control” over CHMS and let liabilities pile up while keeping the cash flowing to insiders. The complaint also tacks on a civil conspiracy count, claiming the alleged raid was carried out through “overt acts” that deepened the bankruptcy.
The lawsuit demands compensatory damages, punitive damages, costs and attorneys’ fees — and asks for a jury trial. The four named insiders are listed as representing themselves, and no contact information was immediately available, according to court records.
For residents, workers and creditors of the collapsed chain, the question now is whether any of the money will actually come back.
