Preferred Care Inc., which filed for bankruptcy in November of last year, has transferred its 21 skilled nursing facilities in Kentucky to Sapphire Care Group, The Wall Street Journal reported Monday.
Thirty-three of the Plano, Texas-based Preferred Care’s facilities filed for Chapter 11 bankruptcy protection last year in the face of 163 personal injury lawsuits. The largest judgment, which involved a Kentucky facility, was for $28 million.
Judge Mark Mullin of the U.S. Bankruptcy Court for the Northern District of Texas, signed off on the order to put the facilities under the control of Sapphire on Friday.
Sapphire will employ at least 70% of Preferred Care’s employees at each of the facilities when the transfer is complete, according to the June 27 motion to transfer the operations and related assets of the Kentucky facilities.
Kentucky is a notoriously challenging environment for SNFs facing lawsuits, and Preferred Care has blamed tort law in the state for making it hard to turn a profit there, the WSJ noted. Of the 163 lawsuits it faced, 97 were in Kentucky, according to the Journal.
Sapphire will not pay for the Kentucky facilities, and it is shielded from the lawsuits under the transfer deal. According to the Journal, Sapphire is already a licensed nursing home operator in Kentucky.
Sapphire — which appears to be a group of nursing homes based in the Buffalo, N.Y., area according to a LinkedIn page — did not respond to phone calls or e-mail messages from Skilled Nursing News as of press time.
Written by Maggie Flynn