Jordan Rau, KFF Health News
Nancy Hunt arrived at an emergency room from a Genesis HealthCare nursing house in Pennsylvania in such dreadful form, together with maggots infesting her gangrened foot, that the hospital referred to as an elder abuse hotline after which the police, her son alleged in a lawsuit.
Hunt died 5 days later. Her demise certificates stated the foot damage was a “significant” issue. Genesis denied wrongdoing however agreed to pay $3.5 million in a settlement Hunt’s son signed in August 2024.
Yet Genesis hasn’t paid most of that debt, courtroom data present. It could by no means must.
Once the nation’s largest nursing house chain, Genesis says it was spending $8 million a month defending and settling lawsuits over resident accidents and deaths lately. But the corporate is now poised to wipe the legal responsibility slate clear by in search of refuge in probably the most protecting nook of the authorized system for the nursing house business: chapter courtroom.
The Genesis case, one in every of 11 massive senior care bankruptcies this yr, illustrates how well being care firms can dodge public and monetary accountability for alleged negligence via delays, confidentiality clauses, and chapter maneuvers, a KFF Health News investigation discovered.
When it filed for chapter in Dallas in July, Genesis estimated its whole legal responsibility for practically a thousand settled and pending lawsuits at $259 million. A KFF Health News assessment of the phrases of 155 settlement agreements and corporate financial statements reveals Genesis officers knew insolvency was potential but included provisions in its settlement agreements permitting it to defer fee, typically for a yr or extra.
As a consequence, Genesis paid nothing in 85 instances and solely a portion within the different 70, based on civil courtroom data and chapter claims made accessible via individuals with entry to them. It nonetheless owes $41 million of the $58 million it had agreed to pay in these instances, the data present.
“It just feels like they killed my mom and got away with it,” stated Vanessa Betancourt, whose mom, Nellie Betancourt, a retired nurse, fractured her hip at a Genesis house in Albuquerque, New Mexico — an damage the health worker’s report stated led to her demise. Genesis agreed to a $650,000 settlement with Betancourt’s household in April underneath the situation it might not must pay the primary of seven installments for one more yr, based on the settlement doc.
Genesis denied wrongdoing in all lawsuits and settlements. In a written assertion, the corporate didn’t reply questions on particular person private damage instances. The assertion stated Genesis remained “focused on delivering high-quality, compassionate care to our patients and residents without disruption” throughout chapter.
One lawsuit Genesis settled for practically $1 million alleged nursing house managers ignored repeated warnings a couple of male resident’s habits earlier than he sexually assaulted a feminine Alzheimer’s affected person, based on courtroom data. In a case the corporate resolved for $500,000, a Genesis nursing house 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 both settlement, based on chapter claims.
Creditors, together with households of the deceased, are anticipated to salvage a fraction of what they have been promised, if something. On Dec. 10, the corporate’s house owners have been scheduled to hunt approval by the U.S. Bankruptcy Court for the Northern District of Texas to promote its nursing houses and different belongings to its largest investor, a non-public fairness agency. In courtroom papers, legal professionals for residents and different collectors say the complicated plan will prevent them from pursuing Genesis’ new possession and different firms they blame for the corporate’s collapse.
John Anthony, a chapter lawyer representing 340 private damage claims towards Genesis, stated, “They never had any intention to honor these deals.”
Low Ratings and Fines
During years of economic turmoil, Genesis has continuously struggled to supply top-notch care, federal data present. Using its five-star system, the Centers for Medicare & Medicaid Services rated 58% of homes affiliated with Genesis as beneath common or a lot beneath common. CMS has fined Genesis houses $10 million for violating federal well being requirements over the previous three years.
In 2022, Connecticut health regulators shuttered a Genesis house after two deaths and a number of violations. The firm closed another Connecticut nursing home this yr after residents twice have been evacuated over security considerations.
In its Chapter 11 submitting, Genesis stated it cared for about 15,000 residents in 165 nursing houses and 10 assisted dwelling services in 18 states. They are centered in Pennsylvania, West Virginia, New Mexico, New Hampshire, New Jersey, Maine, Alabama, Maryland, and North Carolina, based on the chapter submitting.
The firm stated it owed $709 million in secured debt to lenders and the IRS. Under chapter guidelines, these money owed, backed by Genesis collateral, take priority over the $1.6 billion in unsecured debt Genesis stated it owes. Unsecured collectors embody a pension fund; contractors that supplied well being companies and gear; Pennsylvania, New Mexico, and West Virginia for unpaid supplier taxes; and former residents and their households who sued.
Dangers in Memory Care
Sandia Ridge Center, a Genesis house in Albuquerque, was repeatedly faulted by well being regulators for not stopping sexual misbehavior in its reminiscence care unit. In November 2021, CMS cited the home for missing sufficient nurses to stop sexual abuse amongst residents. An inspection report the next August identified more inappropriate sexual contact. Police have been referred to as to research sexual assault allegations in February and March of 2023, police studies present; neither resulted in felony expenses.
Then in April 2023, a 61-year-old male resident with alcohol-related dementia sexually assaulted a feminine resident with Alzheimer’s within the eating room, based on a police report and an inspection report. When the resident screamed for him to cease and that he was hurting her, he responded “shut up bitch I know you like this,” based on a lawsuit introduced on behalf of the girl, recognized in courtroom papers as R.S.
Sandia Ridge administration had been conscious of the male resident’s behavioral points for months, based on worker depositions within the case. Police had investigated a prior sexual assault allegation towards him the earlier yr with out bringing expenses. In one deposition, a former actions assistant testified he hit her and twice pushed her into a toilet whereas saying, “I want to have sex with you.” When she reported him to a senior Genesis supervisor, she stated within the deposition, the supervisor put his finger over his lips and stated, “Shhh.”
The actions employee testified that R.S. used to fortunately sing together with Elvis Presley songs. After the assault, the employee stated, R.S. “don’t sing anymore.”
Inspectors cited the house for failing to guard R.S. The identical report stated the house didn’t present a therapist for one more feminine resident who was being sexually harassed. Medicare fined Sandia Ridge Center $91,247. Genesis denied legal responsibility however settled R.S.’ lawsuit for $925,000 in May, based on the chapter declare.
“We just felt we have to hold them accountable,” R.S.’ daughter stated in an interview, talking on the situation that she and her mom not be recognized, due to the character of the assault. “Maybe I’m wrong, maybe I’m naive, but the only way to do that is to sue someone, right?”
Genesis has not paid any of the settlement, based on the household’s declare submitting.
Growth and Debt
Genesis’ downfall might be traced to 2007, when associates of two personal fairness corporations acquired the corporate in a $1.5 billion leveraged buyout, taking over substantial debt, based on its chapter submitting. Private fairness additionally has been concerned in different well being care bankruptcies, together with these of the HCR ManorCare nursing house chain, the jail well being care contractor Corizon Health, and two for-profit hospital techniques, Steward Health Care and Prospect Medical Holdings.
In 2011, Genesis raised $2.4 billion by transferring considerably all its nursing house buildings and different actual property to Welltower, a publicly traded actual property funding belief, based on Genesis’ chapter submitting. Genesis then rented the buildings again from Welltower, which made leasing prices a big expense.
Genesis went on a nationwide shopping for spree. At its peak in 2016, it had grown to greater than 500 nursing houses. In a courtroom declaration, Louis Robichaux IV, a advisor overseeing Genesis’ chapter restructuring, wrote that as the corporate expanded, it grew to become tougher to handle and “mired in corporate inefficiencies.” Robichaux wrote that Genesis’ monetary woes have been exacerbated by quickly rising labor prices and lawsuits, together with some predating the covid pandemic.
Starting in 2021, Genesis averted chapter after receiving $100 million in loans from a private equity firm based by Joel Landau, the proprietor of a Brooklyn-based nursing home chain, based on Robichaux’s submitting.
But Genesis continued to teeter on the sting of insolvency. In audited financial statements for 2022 and 2023 submitted to a California oversight company, administration and auditors stated lease and debt obligations raised “substantial doubt about the company’s ability to continue as a going concern.”
In a courtroom submitting, a committee appointed by the U.S. Trustee’s Office to characterize the unsecured collectors within the chapter accused Landau and Welltower of orchestrating a covert plan that allowed Welltower to maintain getting its rents whereas Landau might run the corporate and “siphon value to himself.” The committee alleged their efforts pressured the corporate into insolvency whereas “staffing levels and patient care declined precipitously.” Landau and Welltower didn’t reply to requests for remark.
Drawn-Out Lawsuits
Erin Pearson sued Genesis over the demise of her father, James Sanderson, a retired mining firm govt who died in 2018 after spending lower than a month at Bear Canyon Rehabilitation Center in Albuquerque. In the reminiscence care unit, Sanderson fell repeatedly, suffered treatment errors made by nursing house employees, and developed a bowel obstruction and sepsis, based on the lawsuit, filed in 2019. Pearson’s legal professionals stated he was not hospitalized till eight days after nurses seen he was vomiting brown mucus.
After the choose rejected Genesis’ request to drive Pearson into arbitration, Genesis appealed. It took 2½ years earlier than an appeals courtroom affirmed the unique determination to let the case go ahead in courtroom, data present.
This previous May, greater than 5 years after suing, Pearson reached a $500,000 settlement, with the primary fee required by November, based on a replica of the settlement. Nothing was paid, based on the chapter declare.
“It was so drawn out and for so long,” Pearson stated in an interview, calling Genesis’ chapter “despicable.”
Payouts Postponed
Jennifer Foote, an Albuquerque lawyer who represents shoppers in a number of lawsuits towards Genesis, together with Pearson’s, stated the corporate continuously filed appeals. “They did not usually win them on these issues,” she stated, “and our sense was that they were doing it as a delay tactic.”
Genesis began utilizing installment funds round 2018, stated Dusti Harvey, Foote’s legislation companion. “The payments wouldn’t start for several months out,” Harvey stated. Foote stated Genesis’ legal professionals typically wished to time the funds to start out the month the trial within the case was scheduled to happen.
Families needed to wait even when comparatively small quantities of cash have been concerned, settlement agreements present. Genesis’ settlement agreements additionally included a confidentiality clause prohibiting dialogue of the incidents.
Genesis agreed to pay $42,000 in a November 2024 settlement, however the first fee was not due till 9 months later. It was not paid, based on the chapter declare.
A $250,000 settlement signed in October 2023 didn’t begin paying out till the next September. When Genesis declared chapter — 21 months after the case was resolved — it nonetheless owed $100,000, based on the household’s declare.
‘We Never Found Out the Truth’
Settling instances allowed Genesis to keep away from the expense and publicity of a trial, at which particulars of how its nursing houses functioned may need been revealed. In October 2020, Margarett Johnson, a retired faculty bus driver, fell out of her wheelchair at a Genesis nursing house in Waldorf, Maryland, fracturing her jawbone, nostril, and neck, based on a lawsuit introduced by her household. Johnson was despatched to a trauma heart and positioned on a ventilator. She died three months later, at age 76, from ventilator-associated pneumonia, the lawsuit stated.
“It looked like she was hit by a truck,” Angelina Harley, one in every of her daughters, stated in an interview. “I knew my mom was not going to come home. I knew the Lord was not going to punish her more.”
The firm denied negligence and blamed the accident on Johnson’s jacket getting tangled within the wheel of her wheelchair, based on the lawsuit. Harley and her sister Angela Swann have been doubtful.
“We never found out the truth,” Harley stated. “They wanted to settle out of court.”
The firm denied legal responsibility however agreed to a $950,000 settlement in October 2024. It by no means paid the ultimate $112,500 installment, based on a letter Johnson’s 5 youngsters despatched to the chapter choose.
“If you settle out of court, you know doggone well you did something wrong,” Harley stated.
Maddening Judges
By summer time 2025, judges in some civil instances had run out of endurance.
Alma Brown, a retired day care supervisor and accordion trainer dwelling in a Genesis nursing house in Clovis, New Mexico, suffered falls, infections, bedsores, and different neglect that hastened her demise in 2023, based on her property’s lawsuit. In Santa Fe District Court, Judge Kathleen McGarry Ellenwood castigated Genesis after it did not pay $2 million of the $3 million settlement to Brown’s property or clarify the delay.
Genesis “obviously benefited by not having to go to trial,” McGarry Ellenwood stated in a single listening to, based on a courtroom transcript. “They assure me that they’re not trying to renege on their contract, but it certainly seems like they haven’t lived up to what the bargain was.”
Genesis declared chapter the day McGarry Ellenwood introduced she would impose greater than $100,000 in fines, plus $10,000 extra every day till the settlement was paid.
In Pennsylvania, Greg Hunt petitioned a choose to punish Genesis after it stopped funds of the $3.5 million settlement after the demise of his mom, 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 offered and renamed.
In a submitting with the Common Pleas Court of Montgomery County, Genesis admitted it was in arrears however requested the choose for extra time, citing “unforeseen and exigent financial challenges.” Genesis stated take care of sufferers at its nursing houses would undergo if it needed to pay instantly.
Unswayed, Judge Richard Haaz in June ordered Genesis to pay up, together with punitive curiosity. But the chapter courtroom stayed that order. Genesis nonetheless owes $1.4 million of the $2 million it was presupposed to pay, based on Hunt’s declare. (The remainder of the $3.5 million settlement is meant to be paid by an insurer in January 2026.) Ian Norris, Hunt’s lawyer, declined to remark, citing confidentiality provisions within the settlement.
Court data point out Genesis legal professionals by no means disclosed in both case that it was making ready to declare chapter.
‘Bankruptcy as a Tool’
In the primary 9 months of 2025, 10 different senior dwelling firms with liabilities over $10 million entered Chapter 11 chapter, based on Gibbins Advisors, a consulting agency.
Hamid Rafatjoo, a chapter lawyer representing nursing houses who will not be concerned within the Genesis chapter case, stated filings could enhance because the business has change into costlier to run and sophistication motion lawsuits have change into a fixture.
“Nursing homes get sued all the time for everything,” Rafatjoo stated. “A lot of operators wait too long to use bankruptcy as a tool.”
On Dec. 1, Genesis introduced the results of its auction, saying it had elected to sell its assets to a non-public fairness agency managed by Landau. In a courtroom submitting, Anthony, the lawyer for the private damage claimants, alleged the auction was stacked in Landau’s favor regardless of an “objectively better and higher competing bid” from one other personal fairness investor that might have supplied more cash to collectors. Genesis stated in its assertion that Landau’s group had elevated its bid in the course of the public sale.
Sen. Elizabeth Warren (D-Mass.) and two different senators final month asked the U.S. Trustee’s Office to intervene within the case, out of concern that “individuals who already own or control Genesis are trying to sell it to themselves, wiping away legal and other creditor debts in the process.” Lawyers representing these in control of the public sale didn’t reply to a request for remark.
Families of former Genesis residents stated they worry the capability to purge lawsuits via chapter emboldens nursing house house owners who present poor care.
“They can file bankruptcy again,” stated Gabe Betancourt, whose spouse, Nellie, died after her keep at Uptown Rehabilitation Center in Albuquerque. “And we’re the ones that will pay for it, with our memories, our lives.”