Preferred Care-Affiliated Nursing Homes Seek Bankruptcy After Lawsuits

November 14, 2017

By Tom Hals and Tracy Rucinski

(Reuters) - Thirty-three nursing homes affiliated with Preferred Care Group, one of the largest U.S. nursing home chains, filed for Chapter 11 bankruptcy due to multi-million dollar personal injury lawsuits in Kentucky and New Mexico, according to court filings.

Preferred Care Group is owned by Thomas Scott of Plano, Texas, according to the court filings. Scott also owns another company, Preferred Care Inc, which is the master lessee of some of the facilities and also filed for bankruptcy on Monday.

The operators of the nursing homes said in a statement issued by Preferred Care Inc that the bankruptcy filings will allow them to stay in business, pay employees and vendors and care for 2,900 residents while seeking to restructure.

Preferred Care blamed the bankruptcies on 163 personal injury cases the company is defending, most of which have been lodged by the Wilkes & McHugh law firm of Tampa, Florida, according to court records.

In its filing in the U.S. Bankruptcy Court in the Northern District of Texas, a $28 million judgement in favor of the family of a man who was injured in one of its nursing facilities in Kentucky was listed as its largest claimant.

A spokeswoman for Wilkes & McHugh did not immediately respond to a request for comment. The law firm describes itself as "the go-to firm for nursing home abuse and neglect cases" on its website.

"The health, safety, and comfort of the residents will be the primary concern going forward," a spokesman for the operators of the facilities said in a statement.

Preferred Care Partners Management Group LP and Kentucky Partners Management LLC, unaffiliated companies that manage non-clinical operations at Preferred Care facilities, also filed separate bankruptcy cases on Monday, according to court filings.

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