“If it was just a tiny nursing home chain in Indiana no one would care,” said Harrington, who specializes in the nursing home industry. Under the bankruptcy order, which was approved last December, unsecured creditors, including the families with pending legal actions, are expected to recover only 0.7 percent of their claims.Ĭharlene Harrington, professor emeritus of social and behavioral sciences at the University of California, San Francisco, said Consulate’s bankruptcy strategy and its corporate structure have proven successful in protecting itself from legal responsibility. When a company files for bankruptcy, all ongoing legal actions are frozen and plaintiffs must seek relief from the bankruptcy court. Nursing home watchdogs say the Consulate affiliates’ bankruptcy case set a troubling precedent. Such tactics, while legal, have prompted calls for holding nursing home chains more accountable, and the Biden administration has announced it will take steps to make homes’ ownership and finances more transparent. Taken together, Consulate left families like the Romeros with little chance of recourse for alleged wrongdoing. Before bankruptcy, the company used a convoluted corporate structure that stymied litigation, including dividing up ownership of its nursing homes and keeping paltry liability insurance. In the six-year run-up to the bankruptcy filing of six Consulate affiliates, at least 137 plaintiffs across a half-dozen states had sued the affiliates on allegations ranging from negligence and wrongful death to Medicare fraud, according to an online search of legal databases many cases were settled and the outcome of others was unclear.Ī STAT investigation found that in many of these cases, lawyers for Consulate affiliates leveraged the threat of bankruptcy in seeking to lower settlements, and that the companies’ actions fit a larger pattern.

Romero’s family is one of many who faced similar hardball tactics, plaintiffs’ lawyers said. Exclusive analysis of biotech, pharma, and the life sciences Learn Moreįor-profit nursing homes and hospices are a bad deal for older Americans

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