Court Appoints Special Master to Run One of RI’s Largest Drug Treatment Facilities

Court Appoints Special Master to Run One of RI’s Largest Drug Treatment Facilities

While drug abuse is exploding in Rhode Island, the non-profit Phoenix House, which manages facilities in Rhode Island and around New England, is being placed by Superior Court Judge Brian Stern under the control of a special master to avoid a collapse and the liquidation of the company.

Drug abuse and overdoses continue to be a public health crisis during the spread of the virus. According to data from the Rhode Island Department of Health, more than 300 Rhode Islanders have died each of the last four years from overdose -- 2016 to 2019. Data for 2020 is not finalized.

Jonathan Savage of Shechtman Halperin Savage has been appointed as the Temporary Non-Liquidating Special Master.  Sterns appointment of a special master is an effort to try to salvage one of RI’s few drug treatment facilities. 

GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLAST

Phoenix House has been devastated by the pandemic and hopes that newly authorized Payroll Protection Program and potentially other federal and state relief will help, according to Jeremy Savage of the law firm.

In early April, the Rhode Island courts unveiled the Business Recovery Program designed to preserve viable Rhode Island businesses during the global economic crisis.

Stern told GoLocal on Wednesday, “The Business Recovery Plan was developed last year by the Superior Court to address a situation like this one during the COVID Pandemic.”

“The Phoenix House currently provides in-patient and out-patient substance abuse care to more than 800 Rhode Islanders. Rather than closing their doors immediately, this plan allows the Phoenix House, with the assistance of a Court fiduciary, to stay open, work with their creditors and stakeholders to continue operations offering critical services now and after the pandemic.”

The order appointing the Special Master requires Savage and his team to work quickly to develop a turnaround plan.

"No later than ten days from the date of entry of this order, the Petitioner [Peter Mumma, in his capacity as Chief Executive Officer and President of the Board of Directors of Phoenix Houses of  New England, Inc.] and Respondent [Phoenix House of New England] shall present an operating plan to the Special Master," states the order. 

"Prior to presenting the Operating Plan, the Petitioner and Respondent shall consult with the Special Master as to the contents of the Operating Plan. The Special Master shall then review and revise the Operating Plan as necessary," it continues. 

Phoenix House New England operates multiple facilities in Rhode Island and operates facilities in Massachusetts, New Hampshire and Vermont.