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Involuntary bankruptcy possible for nursing home chain


Some creditors of a nursing home chain are seeking to force the nursing homes in to a bankruptcy proceeding so that they can have a chance at collecting on business debt the nursing homes owe them.

The move seems to be a tactical one to protect the unsecured creditors' legal rights, as there seems to be some fear that the home will not make good on the over $250,000 owed to the creditors. Moreover, a major investor in the nursing home world, which is also the fledgling chain's landlord, has recently initiated a receivership proceeding in a state court. The landlord is claiming over $10 million in back rent.

A receivership is another means by which a debtor, or its creditors, can resolve its debts. However, in this case, the applicable state laws offer no protection to the unsecured in the receivership, meaning they can be left without any payment or any say in how the nursing home chain gets operated in the future.

Louisville, Kentucky, residents who have questions about this state's receivership process or want to evaluate it as an option should contact an experienced debt relief attorney.

This case also illustrates that bankruptcies are not necessarily voluntary, and creditors may decide that, instead of a creditor lawsuit, they should compel a business to go through the bankruptcy process. They may only do so under certain legal conditions, however, and a business or individual that is the target of an involuntary petition has the right to defend itself and suggest alternatives. Doing so, however, involves some legal complexities and nuances that even an experienced Kentucky business owner might not fully understand.

Source: The Philadelphia Inquirer, "Creditors attempt to put nursing home into bankruptcy," Harold Brubaker, Jan. 22, 2018.

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