An East Side nonprofit health center is continuing its fight to stop a receiver from taking over.
Earlier this month, U.S. District Judge Christopher Boyko appointed a receiver to run Northeast Ohio Neighborhood Services, saying that the move was needed because the health care nonprofit had failed to pay back a multimillion dollar loan to a lender.
NEON, as the nonprofit is commonly known, offers medical services to patients from multiple locations and a mobile unit, regardless of their ability to pay.
The lender, a New Jersey-based private equity company, initially sued NEON in May and asked the court to appoint a receiver.
Receivers often have wide latitude to make decisions over staffing and properties. In this case, the receiver, John Lane, who runs a local business consulting firm, is still relatively powerless. That’s because the judge has not yet signed a document granting him access to NEON’s properties and its bank accounts.
NEON is doing what it can to keep it that way. On Sunday, the health center asked Boyko to temporarily halt the receivership because NEON is appealing the receivership to a higher court. NEON filed the case in the U.S. Sixth Circuit Court of Appeals in Cincinnati appeals court on Monday.
This is the second plea NEON has made to pause the appointment of a receiver. Boyko shot down the first one last week, finding “no strong basis” for delaying receivership. It’s not clear when he’ll rule on the latest request.
NEON is hoping to stop the court from moving forward out of concern that a receiver would “severely disrupt” the health care services it provides to the community, according to its court filings. The health practice is nearly 50 years old and primarily serves African American patients. Between 2019 and 2024, about 95% of its patients were Black, according to data from the U.S. Health Resources & Services Administration (HRSA). In recent weeks, the nonprofit has struggled to make payroll on time, with some staff getting paid late with paper checks instead of the normal direct deposits.
NEON wrote in its request to Boyko on Sunday that turning the health center over would “place patient health and well-being in jeopardy.”
“There is a real risk that NEON will cease to exist — meaning hundreds of employees may lose their jobs — and the high-risk patients and the community that rely on NEON for critical healthcare and life-sustaining services will be left with nothing,” an attorney wrote.
Some NEON employees say they are already losing their jobs. Signal Cleveland spoke with four NEON employees Monday who confirmed that the organization terminated staff members on Nov. 19, including at least three medical professionals. It’s not clear how many people in total were let go or why.
Antoine Rembert, a former security guard at NEON, lost his job last Friday. He said he was told the company was going to have to “let him go” but was not provided any more details. Earlier in the week, Rembert was quoted by name in an article Signal Cleveland published about payroll issues at NEON.
Signal Cleveland emailed NEON’s CEO, Willie Austin, and the organization’s lawyers to ask how many people’s jobs were terminated and why. Signal Cleveland did not receive a response.
In the document it filed Sunday, NEON also said that the receiver – whose company is based in Mentor, Ohio – would not be equipped to run the health centers in “the economically depressed neighborhoods of Collinwood, East Cleveland, and Hough.” And it argued that a delay could give NEON time to close on financing to repay All Pro Capital’s initial loan, saying the lender’s “position will likely improve” during a temporary halt on receivership.
In a court filing late Monday, the lender, All Pro Capital, strongly objected to NEON’s request to halt receivership. It said NEON failed to provide evidence that the community would be hurt by a receiver. All Pro’s lawyers wrote that a receiver would likely do a better job than its current management.
The number of patients the nonprofit sees has dropped drastically in recent years – falling in half between 2023 and 2024. A spokesperson for All Pro Capital, the lender suing NEON, told Signal Cleveland in July that it is “aware of the important services that NEON provides in its neighborhoods and will be supportive of solutions that will allow such services to continue.”
