{"id":344636,"date":"2025-12-12T15:39:14","date_gmt":"2025-12-12T15:39:14","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/344636\/"},"modified":"2025-12-12T15:39:14","modified_gmt":"2025-12-12T15:39:14","slug":"local-nursing-home-owners-bankruptcy-leaves-victims-families-empty-handed","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/344636\/","title":{"rendered":"Local Nursing Home Owner’s Bankruptcy Leaves Victims’ Families Empty-Handed"},"content":{"rendered":"

By\u00a0Jordan Rau<\/a>\u00a0|\u00a0KFF Health News<\/a>\u00a0<\/p>\n

\"\"<\/a>File photo.<\/p>\n

Nancy Hunt arrived at an emergency room from a Genesis HealthCare nursing home in Pennsylvania in such dreadful shape, including maggots infesting her gangrened foot, that the hospital called an elder abuse hotline and then the police, her son alleged in a lawsuit.<\/p>\n

Hunt died five days later. Her death certificate said the foot injury was a \u201csignificant\u201d factor. Genesis denied wrongdoing but agreed to pay $3.5 million in a settlement Hunt\u2019s son signed in August 2024.<\/p>\n

Yet Genesis hasn\u2019t paid most of that debt, court records show. It may never have to.<\/p>\n

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Once the nation\u2019s largest nursing home chain,\u00a0Genesis says<\/a>\u00a0it was spending $8 million a month defending and settling lawsuits over resident injuries and deaths in recent years. But the company is now poised to wipe the liability slate clean by seeking refuge in the most protective corner of the legal system for the nursing home industry: bankruptcy court.<\/p>\n

The Genesis case, one of 11 large senior care bankruptcies this year, illustrates how health care companies can dodge public and financial accountability for alleged negligence through delays, confidentiality clauses, and bankruptcy maneuvers, a KFF Health News investigation found.<\/p>\n

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When it filed for bankruptcy in Dallas in July, Genesis estimated its total liability for nearly a thousand settled and pending lawsuits at $259 million. A KFF Health News review of the terms of 155 settlement agreements and\u00a0corporate financial statements<\/a>\u00a0shows Genesis officials knew insolvency was possible yet included provisions in its settlement agreements allowing it to defer payment, often for a year or more.<\/p>\n

As a result, Genesis paid nothing in 85 cases and only a portion in the other 70, according to civil court records and bankruptcy claims made available through people with access to them. It still owes $41 million of the $58 million it had agreed to pay in those cases, the records show.<\/p>\n

\u201cIt just feels like they killed my mom and got away with it,\u201d said Vanessa Betancourt, whose mother, Nellie Betancourt, a retired nurse, fractured her hip at a Genesis home in Albuquerque, New Mexico \u2014 an injury the medical examiner\u2019s report said led to her death. Genesis agreed to a $650,000 settlement with Betancourt\u2019s family in April under the condition it would not need to pay the first of seven installments for another year, according to the settlement document.<\/p>\n

Genesis denied wrongdoing in all lawsuits and settlements. In a written statement, the company did not answer questions about individual personal injury cases. The statement said Genesis remained \u201cfocused on delivering high-quality, compassionate care to our patients and residents without disruption\u201d during bankruptcy.<\/p>\n

One lawsuit Genesis settled for nearly $1 million alleged nursing home managers ignored repeated warnings about a male resident\u2019s behavior before he sexually assaulted a female Alzheimer\u2019s patient, according to court records. In a case the company resolved for $500,000, a Genesis nursing home was accused of delaying the hospitalization of a resident who had vomited brown mucus. He died of a bowel obstruction. Genesis has paid nothing for either settlement, according to bankruptcy claims.<\/p>\n

Creditors, including families of the deceased, are expected to salvage a fraction of what they were promised, if anything. On Dec. 10, the company\u2019s owners were scheduled to seek approval by the U.S. Bankruptcy Court for the Northern District of Texas to sell its nursing homes and other assets to its largest investor, a private equity firm. In court papers, lawyers for residents and other creditors say the complex plan will\u00a0prevent them<\/a>\u00a0from pursuing Genesis\u2019 new ownership and other companies\u00a0they blame for<\/a>\u00a0the company\u2019s collapse.<\/p>\n

John Anthony, a bankruptcy attorney representing 340 personal injury claims against Genesis, said, \u201cThey never had any intention to honor these deals.\u201d<\/p>\n

Low Ratings and Fines<\/p>\n

During years of financial turmoil, Genesis has frequently struggled to provide top-notch care, federal records show. Using its five-star system, the Centers for Medicare & Medicaid Services\u00a0rated 58% of homes<\/a>\u00a0affiliated with Genesis as below average or much below average. CMS\u00a0has fined<\/a>\u00a0Genesis homes $10 million for violating federal health standards over the past three years.<\/p>\n

In 2022,\u00a0Connecticut health regulators shuttered<\/a>\u00a0a Genesis home after two deaths and multiple violations. The company\u00a0closed another Connecticut nursing home<\/a>\u00a0this year after residents twice were evacuated over safety concerns.<\/p>\n

In its\u00a0Chapter 11<\/a>\u00a0filing, Genesis said it cared for about 15,000 residents in 165 nursing homes and 10 assisted living facilities in 18 states. They are centered in Pennsylvania, West Virginia, New Mexico, New Hampshire, New Jersey, Maine, Alabama, Maryland, and North Carolina, according to the bankruptcy filing. The company operates the Crestview Center facility in Middletown Township.<\/p>\n

The company said it owed $709 million in secured debt to lenders and the IRS. Under bankruptcy rules, those debts, backed by Genesis collateral, take precedence over the $1.6 billion in unsecured debt Genesis said it owes. Unsecured creditors include a pension fund; contractors that provided health services and equipment; Pennsylvania, New Mexico, and West Virginia for unpaid provider taxes; and former residents and their families who sued.<\/p>\n

Dangers in Memory Care<\/p>\n

Sandia Ridge Center, a Genesis home in Albuquerque, was repeatedly faulted by health regulators for not preventing sexual misbehavior in its memory care unit. In November 2021, CMS\u00a0cited the home<\/a>\u00a0for lacking enough nurses to prevent sexual abuse among residents. An inspection report the following August\u00a0identified more<\/a>\u00a0inappropriate sexual contact. Police were called to investigate sexual assault allegations in\u00a0February<\/a>\u00a0and\u00a0March<\/a>\u00a0of 2023, police reports show; neither resulted in criminal charges.<\/p>\n

Then in April 2023, a 61-year-old male resident with alcohol-related dementia sexually assaulted a female resident with Alzheimer\u2019s in the dining room, according to a\u00a0police report<\/a>\u00a0and an\u00a0inspection report<\/a>. When the resident screamed for him to stop and that he was hurting her, he responded \u201cshut up bitch I know you like this,\u201d according to a lawsuit brought on behalf of the woman, identified in court papers as R.S.<\/p>\n

Sandia Ridge management had been aware of the male resident\u2019s behavioral issues for months, according to employee depositions in the case. Police had investigated a\u00a0prior sexual assault allegation<\/a>\u00a0against him the previous year without bringing charges. In one deposition, a former activities assistant testified he hit her and twice pushed her into a bathroom while announcing, \u201cI want to have sex with you.\u201d When she reported him to a senior Genesis manager, she said in the deposition, the manager put his finger over his lips and said, \u201cShhh.\u201d<\/p>\n

The activities worker testified that R.S. used to happily sing along with Elvis Presley songs. After the assault, the worker said, R.S. \u201cdon\u2019t sing anymore.\u201d<\/p>\n

Inspectors cited the home for failing to protect R.S. The same report said the home didn\u2019t provide a therapist for another female resident who was being sexually harassed. Medicare fined Sandia Ridge Center $91,247. Genesis denied liability but settled R.S.\u2019 lawsuit for $925,000 in May, according to the bankruptcy claim.<\/p>\n

\u201cWe just felt we have to hold them accountable,\u201d R.S.\u2019 daughter said in an interview, speaking on the condition that she and her mother not be identified, because of the nature of the assault. \u201cMaybe I\u2019m wrong, maybe I\u2019m naive, but the only way to do that is to sue someone, right?\u201d<\/p>\n

Genesis has not paid any of the settlement, according to the family\u2019s claim filing.<\/p>\n

Growth and Debt<\/p>\n

Genesis\u2019 downfall can be\u00a0traced to 2007<\/a>, when affiliates of two private equity firms acquired the company in a $1.5 billion leveraged buyout, taking on substantial debt, according to its bankruptcy filing. Private equity also has been involved in other health care bankruptcies, including those of the\u00a0HCR ManorCare<\/a>\u00a0nursing home chain, the prison health care contractor\u00a0Corizon Health<\/a>, and two for-profit hospital systems,\u00a0Steward Health Care<\/a>\u00a0and\u00a0Prospect Medical Holdings<\/a>.<\/p>\n

In 2011, Genesis raised $2.4 billion by transferring substantially all its nursing home buildings and other real estate to Welltower, a publicly traded real estate investment trust, according to Genesis\u2019 bankruptcy filing. Genesis then rented the buildings back from Welltower, which made leasing costs a significant expense.<\/p>\n

Genesis went on a nationwide buying spree. At its peak in 2016, it had grown to more than 500 nursing homes. In a court declaration, Louis Robichaux IV, a consultant overseeing Genesis\u2019 bankruptcy restructuring, wrote that as the company expanded, it became harder to manage and \u201cmired in corporate inefficiencies.\u201d Robichaux wrote that Genesis\u2019 financial woes were exacerbated by rapidly increasing labor costs and lawsuits, including some predating the covid pandemic.<\/p>\n

Starting in 2021, Genesis avoided bankruptcy after\u00a0receiving $100 million in loans<\/a>\u00a0from a\u00a0private equity firm<\/a>\u00a0founded by Joel Landau, the owner of a\u00a0Brooklyn-based nursing home chain<\/a>, according to Robichaux\u2019s filing.<\/p>\n

But Genesis continued to teeter on the edge of insolvency. In\u00a0audited financial statements<\/a>\u00a0for 2022 and 2023 submitted to a California oversight agency, management and auditors said rent and debt obligations raised \u201csubstantial doubt about the company\u2019s ability to continue as a going concern.\u201d<\/p>\n

In a court filing, a committee appointed by the U.S. Trustee\u2019s Office to represent the unsecured creditors in the bankruptcy accused Landau and Welltower of\u00a0orchestrating a covert plan<\/a>\u00a0that allowed Welltower to keep getting its rents while Landau could run the company and \u201csiphon value to himself.\u201d The committee alleged their efforts forced the company into insolvency while \u201cstaffing levels and patient care declined precipitously.\u201d Landau and Welltower did not respond to requests for comment.<\/p>\n

Drawn-Out Lawsuits<\/p>\n

Erin Pearson sued Genesis over the death of her father, James Sanderson, a retired mining company executive who died in 2018 after spending less than a month at Bear Canyon Rehabilitation Center in Albuquerque. In the memory care unit, Sanderson fell repeatedly, suffered medication errors made by nursing home staff, and developed a bowel obstruction and sepsis, according to the lawsuit, filed in 2019. Pearson\u2019s lawyers said he was not hospitalized until eight days after nurses noticed he was vomiting brown mucus.<\/p>\n

After the judge rejected Genesis\u2019 request to force Pearson into arbitration, Genesis appealed. It took 2\u00bd years before an appeals court affirmed the original decision to let the case go forward in court, records show.<\/p>\n

This past May, more than five years after suing, Pearson reached a $500,000 settlement, with the first payment required by November, according to a copy of the agreement. Nothing was paid, according to the bankruptcy claim.<\/p>\n

\u201cIt was so drawn out and for so long,\u201d Pearson said in an interview, calling Genesis\u2019 bankruptcy \u201cdespicable.\u201d<\/p>\n

Payouts Postponed<\/p>\n

Jennifer Foote, an Albuquerque attorney who represents clients in multiple lawsuits against Genesis, including Pearson\u2019s, said the company frequently filed appeals. \u201cThey did not usually win them on these issues,\u201d she said, \u201cand our sense was that they were doing it as a delay tactic.\u201d<\/p>\n

Genesis started using installment payments around 2018, said Dusti Harvey, Foote\u2019s law partner. \u201cThe payments wouldn\u2019t start for several months out,\u201d Harvey said. Foote said Genesis\u2019 lawyers often wanted to time the payments to start the month the trial in the case was scheduled to occur.<\/p>\n

Families had to wait even when comparatively small amounts of money were involved, settlement agreements show. Genesis\u2019 settlement agreements also included a confidentiality clause prohibiting discussion of the incidents.<\/p>\n

Genesis agreed to pay $42,000 in a November 2024 settlement, but the first payment was not due until nine months later. It was not paid, according to the bankruptcy claim.<\/p>\n

A $250,000 settlement signed in October 2023 did not start paying out until the following September. When Genesis declared bankruptcy \u2014 21 months after the case was resolved \u2014 it still owed $100,000, according to the family\u2019s claim.<\/p>\n

\u2018We Never Found Out the Truth\u2019<\/p>\n

Settling cases allowed Genesis to avoid the expense and publicity of a trial, at which details of how its nursing homes functioned might have been revealed. In October 2020, Margarett Johnson, a retired school bus driver, fell out of her wheelchair at a Genesis nursing home in Waldorf, Maryland, fracturing her jawbone, nose, and neck, according to a lawsuit brought by her family. Johnson was sent to a trauma center and placed on a ventilator. She died three months later, at age 76, from ventilator-associated pneumonia, the lawsuit said.<\/p>\n

\u201cIt looked like she was hit by a truck,\u201d Angelina Harley, one of her daughters, said in an interview. \u201cI knew my mom was not going to come home. I knew the Lord was not going to punish her more.\u201d<\/p>\n

The company denied negligence and blamed the accident on Johnson\u2019s jacket getting tangled in the wheel of her wheelchair, according to the lawsuit. Harley and her sister Angela Swann were dubious.<\/p>\n

\u201cWe never found out the truth,\u201d Harley said. \u201cThey wanted to settle out of court.\u201d<\/p>\n

The company denied liability but agreed to a $950,000 settlement in October 2024. It never paid the final $112,500 installment, according to a letter Johnson\u2019s five children sent to the bankruptcy judge.<\/p>\n

\u201cIf you settle out of court, you know doggone well you did something wrong,\u201d Harley said.<\/p>\n

Maddening Judges<\/p>\n

By summer 2025, judges in some civil cases had run out of patience.<\/p>\n

Alma Brown, a retired day care manager and accordion teacher living in a Genesis nursing home in Clovis, New Mexico, suffered falls, infections, bedsores, and other neglect that hastened her death in 2023, according to her estate\u2019s lawsuit. In Santa Fe District Court, Judge Kathleen McGarry Ellenwood castigated Genesis after it failed to pay $2 million of the $3 million settlement to Brown\u2019s estate or explain the delay.<\/p>\n

Genesis \u201cobviously benefited by not having to go to trial,\u201d McGarry Ellenwood said in one hearing, according to a court transcript. \u201cThey assure me that they\u2019re not trying to renege on their contract, but it certainly seems like they haven\u2019t lived up to what the bargain was.\u201d<\/p>\n

Genesis declared bankruptcy the day McGarry Ellenwood announced she would impose more than $100,000 in fines, plus $10,000 more each day until the settlement was paid.<\/p>\n

In Pennsylvania, Greg Hunt petitioned a judge to punish Genesis after it stopped payments of the $3.5 million settlement after the death of his mother, Nancy, the resident with the gangrenous foot. She had spent eight months in 2019 at Brandywine Hall, a Genesis facility in West Chester that was later sold and renamed.<\/p>\n

In a filing with the Common Pleas Court of Montgomery County, Genesis admitted it was in arrears but asked the judge for more time, citing \u201cunforeseen and exigent financial challenges.\u201d Genesis said care for patients at its nursing homes would suffer if it had to pay immediately.<\/p>\n

Unswayed, Judge Richard Haaz in June ordered Genesis to pay up, along with punitive interest. But the bankruptcy court stayed that order. Genesis still owes $1.4 million of the $2 million it was supposed to pay, according to Hunt\u2019s claim. (The rest of the $3.5 million settlement is supposed to be paid by an insurer in January 2026.) Ian Norris, Hunt\u2019s lawyer, declined to comment, citing confidentiality provisions in the settlement.<\/p>\n

Court records indicate Genesis lawyers never disclosed in either case that it was preparing to declare bankruptcy.<\/p>\n

\u2018Bankruptcy as a Tool\u2019<\/p>\n

In the first nine months of 2025, 10 other senior living companies with liabilities over $10 million entered Chapter 11 bankruptcy, according to\u00a0Gibbins Advisors<\/a>, a consulting firm.<\/p>\n

Hamid Rafatjoo, a bankruptcy lawyer representing nursing homes who is not involved in the Genesis bankruptcy case, said filings may increase as the industry has become costlier to run and class action lawsuits have become a fixture.<\/p>\n

\u201cNursing homes get sued all the time for everything,\u201d Rafatjoo said. \u201cA lot of operators wait too long to use bankruptcy as a tool.\u201d<\/p>\n

On Dec. 1, Genesis announced the\u00a0results of its auction<\/a>, saying it had elected to\u00a0sell its assets<\/a>\u00a0to a private equity firm controlled by Landau. In a court filing, Anthony, the attorney for the personal injury claimants,\u00a0alleged the auction was stacked<\/a>\u00a0in Landau\u2019s favor despite an \u201cobjectively better and higher competing bid\u201d from another private equity investor that would have provided more money to creditors. Genesis said in its statement that Landau\u2019s group had increased its bid during the auction.<\/p>\n

Sen. Elizabeth Warren (D-Mass.) and two other senators last month\u00a0asked the U.S. Trustee\u2019s Office<\/a>\u00a0to intervene in the case, out of concern that \u201cindividuals who already own or control Genesis are trying to sell it to themselves, wiping away legal and other creditor debts in the process.\u201d Lawyers representing those in charge of the auction did not respond to a request for comment.<\/p>\n

Families of former Genesis residents said they fear the capacity to purge lawsuits through bankruptcy emboldens nursing home owners who provide deficient care.<\/p>\n

\u201cThey can file bankruptcy again,\u201d said Gabe Betancourt, whose wife, Nellie, died after her stay at Uptown Rehabilitation Center in Albuquerque. \u201cAnd we\u2019re the ones that will pay for it, with our memories, our lives.\u201d<\/p>\n

KFF Health News<\/a>\u00a0is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at\u00a0KFF<\/a>\u00a0\u2014 the independent source for health policy research, polling, and journalism.<\/p>\n","protected":false},"excerpt":{"rendered":"By\u00a0Jordan Rau\u00a0|\u00a0KFF Health News\u00a0 File photo. Nancy Hunt arrived at an emergency room from a Genesis HealthCare nursing…\n","protected":false},"author":2,"featured_media":344637,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[59],"tags":[97,252,253],"class_list":{"0":"post-344636","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-health-care","8":"tag-health","9":"tag-health-care","10":"tag-healthcare"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/344636","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=344636"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/344636\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/344637"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=344636"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=344636"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=344636"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}