Butler County may not get the full $20.4 million sale price for the Sunnyview Nursing and Rehabilitation Center.

Since $2.4 million of the sale price is for accounts receivable — bills yet to be collected for resident care — all the money may not be collected before there is a closing on the property.

County Commissioner Bill McCarrier, board chairman, said he doesn’t expect to reap all $2.4 million.

McCarrier said that number was the accounts receivable total for the end of the year, so the $300,000 write-off the commissioners did earlier this year for bills deemed uncollectable should be deducted from the $2.4 million.

McCarrier said the accounts receivable fluctuates each month.

“They go up and down,” he said.

Investment 360 of Lakewood, N.J., is awaiting state approval for the nursing home license transferral.

The closing will occur the first day of the month after the approval is granted if it occurs by the 15th. For example, if the approval is granted by May 15, the closing will be June 1.

The county keeps the full amount of any bills collected before the closing.

“Every dollar you collect now is 100 percent,” said county Controller Ben Holland.

After the closing, Investment 360 receives 25 cents for every dollar collected. The county does not get any money for bills more than 150 days past the billing date.

According to Holland, the county would have received $1.7 million for the accounts receivable if the closing happened April 1. Investment 360 would have gotten $875,261.

The company would have received more than 25 percent of the total because nearly $280,000 extended beyond the 150-day deadline.

The county negotiated the accounts receivable stipulation with Investment 360 after awarding it the contract to buy Sunnyview.

Holland said he did not know if it is legal to sell accounts receivable in this manner.

But McCarrier said the county verified the legality.

“We checked that out,” he said.

Holland said even if the process was legal, it should have been conducted differently.

“I don’t think the county did its due diligence,” he said.

McCarrier, who has bought and sold businesses, disagreed, saying it’s standard practice to deal with accounts receivable later.

Commissioner Dale Pinkerton, who also owned a business, agreed.

“It’s the most logical way to do it,” Pinkerton said.

Holland said the county could have hired a company to collect any outstanding debt.

“I rather just pay a company to do it,” he said.

McCarrier refuted that method would be better.

“They wouldn’t collect for us,” he said.

Holland argues Investment 360 has no reason to vigorously pursue collections following the closing.

“They have no incentive to up the ante,” he said.

McCarrier said the company’s incentive is getting a share of the money.

Bills for resident care go to federal Medicare, state Medical Assistance, insurance carriers and individuals.

Holland said insurance companies pay bills quickly while government takes longer. However, he said state and federal payments are guaranteed to come through.

According to Holland, another alternative was to bid the accounts receivable up front, either as a component of the sale or as a separate bidding process.

He said there was nothing stopping another company from buying the accounts receivable.

McCarrier said the opposite is true.

“Who would want to bid on it other than the buyer?” he asked.

Holland understands the company would have to be given a share of what it collects.

“You’re transferring risk,” he said.

However, he questioned giving the company 25 cents on the dollar.

“Look at what the market is paying,” he said about accounts receivable.

Pinkerton pointed out the county could have settled for a lower portion than 75 percent.

“We brought it up from what they asked,” he said.

Some counties, such as Beaver, sold a nursing home’s accounts receivable to its buyer.

McCarrier said the 150-day provision doesn’t hurt the county because any bill extending past that time frame is unlikely to be collected.

Holland said if the county was selling accounts receivable, then payables also should have been included.

“They talked about one side of the balance sheet and not the other,” he said.

McCarrier said the county knew Sunnyview’s debts when accepting a sale price.

Commissioner Jim Eckstein sided with Holland, saying accounts receivable should either have been bid out or the county should have hired a firm to be a bill collector.

Pinkerton said the county did the right thing.

“People can criticize all they want,” he said. “In the real business world, companies do that every day.”

Eckstein said the county must collect as much as possible before the closing.

“We have to keep up billing,” he said.

Holland said the county now must monitor what Sunnyview orders in supplies between now and the closing to ensure they’re not excessive.