TAMPA: The owners of a multistate chain of nursing homes may have committed fraud by transferring liabilities to a shell company that later lost more than $2 billion in jury verdicts to families who claimed relatives died of neglect, a federal judge said in a tentative ruling.
Fundamental Long Term Care Holdings LLC’s owners engaged in a “carefully orchestrated sham transaction” by selling a Trans Healthcare Inc. unit in 2006 to a retired graphic artist who didn’t know he bought the company, U.S. Bankruptcy Judge Michael Williamson in Tampa, Florida, said at a hearing today.
Fundamental, or FLTCH, a Sparks, Maryland-based company, kept the unencumbered assets of Trans Healthcare, while the other unit was saddled with the liabilities, including judgments in Florida that have never been paid over the deaths of four residents, according to a complaint by the residents’ families and the bankruptcy trustee for the company left holding the debts.
The transfer “bears all the hallmarks of fraud,” Williamson said today.