What happened before rehab facility closed? Court documents paint the picture

PALM BEACH COUNTY, Fla. - It's a big question we've been digging into for nearly two weeks: What exactly caused a Palm Beach County rehab facility to abruptly shut its doors?

Making the closure even more puzzling, the company's top two executives took their own lives.

One of those executives, CEO Peter Schorr, testified in court just weeks before his June 21st death, which prompted Retreat's facilities in Palm Springs, Pennsylvania and Connecticut to discharge patients and cease operations.

While many Retreat patients were transferred to other facilities, the closures left some with no place to go, according to employees. Hundreds of employees were also left jobless and without their final paycheck.

Those employees have told us their side of the story, but Retreat's side has been difficult to come by.

Now, court documents paint a clearer picture of what happened.

Lancaster Online first reported on the June 5 hearing in Lancaster County, PA.

Under oath, Schorr testified in a hearing following a $5 million judgment against Retreat's parent company, NR Pennsylvania Associates, for unpaid loans dating back several years.

The transcript of Schorr's testimony reveals his company's bank accounts were frozen after the judgment, and that "there were no funds available to pay food costs and other operating costs" at least as far back as May 8.

Schorr also revealed in his testimony that money would flow back and forth between his Pennsylvania and Florida businesses, depending on which operation was doing better or worse.

"The only way Retreat has been funding its operation in the past month have been because you, yourself… have put funds in," an attorney representing the creditor asks Schorr.

"Correct," Schorr replies.

"When I came to Lancaster County 14 years ago… recovery wasn't something that was prevalent in the community. And we really made a difference," Schorr tells the court. "We treated over 40,000 people.

"I'm willing to put my money in it because I believe in what we are doing… I don't care about making the money. I care about helping people."

WPTV Investigates

'A SLIPPERY SLIDE': What happened during the final days at Retreat?

Jamie Ostroff 5:33 PM, Jun 27, 2024

Shauna Eastman, a former patient at Retreat, remembers the impact Schorr had on her life, along with Chief Administrative Officer Scott Korogodsky, who took his own life last week, days after Schorr died.

"We remember them and their faces, and they're reaching out to us and feeding us our hot dogs every day," Eastman said. "You're just reminiscing about that stuff. And your safe haven that was there so long is gone."

Eastman received treatment for depression at Retreat roughly 15 years ago. She traveled to Palm Beach County from her home in Indiana largely because of Retreat's good reputation, and today credits Schorr, Korogodsky and their employees for saving her life.

"Everybody has their issues. Everybody has their stuff nobody knows about," Eastman said. "It's unfortunate that that happened. But it's like -- but there's two people -- two lives there that impacted so many lives for the good."

When asked in court how long he could continue funding retreat with his own money, Schorr answered, "I don't know."

Schorr testified that after a financially difficult year for Retreat in 2023, his companies were on track to break even in 2024.

The judge in Pennsylvania appointed a temporary receiver to oversee the company's Pennsylvania arm following Korogodsky's death.

Retreat employees in Florida said Thursday they still haven't received paychecks for their last three weeks of work.