November 16, 2017

Preferred Care-affiliated nursing homes file for Chapter 11 bankruptcy


On November 13, thirty-three nursing homes affiliated with Preferred Care Group, one of the largest U.S. nursing home chains, filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court in the Northern District of Texas. According to Plano-based Preferred Care, multi-million dollar personal injury lawsuits in Kentucky and New Mexico were the cause that led them to file for bankruptcy.

Preferred Care, ranked in 2016 as the 12 largest nursing facility company in the US, is currently defending itself against 163 lawsuits, of which 97 are pending in Kentucky and 27 are pending in New Mexico. Most of the lawsuits are said to be lodged by a Florida-based law firm, Wilkes & McHugh.

Plano-based Thomas Scott owns Preferred Care Group as well as Preferred Care Inc, which is the master lessee of some of the facilities and also filed for bankruptcy on November 13.

According to the court filing, a $28 million judgment in favor of the family of a man who was injured in one of Preferred Care’s nursing facilities in Kentucky was listed as its largest claimant.

The filing also read, “The future costs, expenses and potential exposure associated with defending the pending litigation has left the Debtors with limited resources.”

By filing for Chapter 11 bankruptcy, Preferred Care said, the facilities will be able to take “a breathing spell” and that it would be able to stay in business, pay employees and vendors, and continue care for nearly 3,000 patients as it restructures.

Separate chapter 11 suits were also filed by Preferred Care Partners Management Group LP and Kentucky Partners Management LLC, unaffiliated businesses that oversee non-clinical operations at Preferred Care nursing homes.

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