- Plan approval hearing set for April
- Government questions treatment of potential abuse claims
(Reuters) – A lawyer for the U.S. Department of Justice’s bankruptcy watchdog on Friday signaled the government would object to a Florida-based nursing home operator’s approach to dealing with potential abuse and negligence claims in its plan to wind down its operations.
Joseph McMahon, representing the U.S. Trustee’s office, said during a hearing before U.S. Bankruptcy Judge Karen Owens in Wilmington, Delaware, that his office will challenge what he described as non-consensual releases of certain legal claims brought by residents and their families against Gulf Coast Health Care and people and entities with ties to the company.
Gulf Coast, which operates 28 nursing homes across Florida, Georgia and Mississippi, filed for bankruptcy in October with more than $200 million in debt, including $49 million in rent owed to its principal landlord, Omega Healthcare Investors. Gulf Coast has been in the process of transferring its facilities to new operators, including Consulate Health Care, Ventura Services – Florida, Citadel Care Centers and Bedrock Care.
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The company, which ran more than 50 facilities at its peak, blamed the COVID-19 pandemic for the decrease in occupancy levels, staffing shortages and increased costs for labor and personal protective equipment. It was one of several nursing home systems to seek bankruptcy relief as the pandemic led to nursing shortages and higher death rates among the elderly. One of the new operators taking over Gulf Coast facilities, Consulate Health Care, went through its own bankruptcy last year.
Owens, who gave Gulf Coast the green light to solicit creditor votes for its plan on Friday, said she was “not surprised” to hear McMahon’s concern.
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