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Too many lawsuits or bad nursing home care? What’s behind bankruptcy, injuries, deaths at Texas-based chain

Scott and his wife live on a 155-acre property in Celina that’s valued at $3.7 million, records show. Scott owns several other properties in Collin and Grayson counties, as well as a home in Fort Lauderdale, property records show. For years, his company Preferred Care Inc. has sponsored a charity golf tournament benefiting the American Red Cross of North Texas.

Scott, 62, declined multiple requests for comment.

Lawyers for the company say the facilities are well run and point to the fact that homes in the Preferred Care brand have been allowed to remain open, even after health inspectors identified quality and safety deficiencies. “We’re heavily regulated and heavily supervised,” McCartin, said in bankruptcy court. “They did not say, ‘You need to go out of business,’” he argued.

Riek said that these lawsuits are ultimately hurting the bottom line.

“The [bankruptcy] filings were the result of financial drains resulting from a significant amount of lawsuits from predatory personal injury lawyers,” he said in an email. “These filings will allow us to redirect these funds used to battle these predatory law firms back into the facilities for resident care.”

What happened at Preferred Care

The Preferred Care group underwent a large-scale acquisition spree between 2004 and 2012.

It grew from 14 facilities to about 74, with locations in Texas, Florida, Kansas, Iowa, Arizona, Mississippi, Nevada, Louisiana, Colorado and Oklahoma. That number grew again about five years ago, when the company added facilities in Kentucky and New Mexico.

This amount of ownership turnover is rarely good for patients because it rarely leads to better quality, according to a 2016 study funded by the National Institute on Aging that looked at nursing home mergers and acquisitions. Well after new chains scoop up poorly performing homes, major problems persist, the study said.

Preferred Care inherited 21 nursing homes in Kentucky from another chain, Extendicare, in 2012. In court, McCartin said Extendicare had undergone an “avalanche of litigation” before it gave the homes to Preferred Care.

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