Another nonprofit organization has come forward claiming to be the victim of mismanagement that resulted in the private gain of National Health Investors and National HealthCare Corp.
ElderTrust of Florida is a nonprofit nursing home organization formed in the summer of 2000 by NHI and NHC to run seven nursing homes. The entity’s lawsuit claims the move was part of the companies’ plan to minimize tax exposure and limit extra losses related to properties on which NHI had foreclosed.
Earlier this month, ElderTrust sued NHI and NHC in Davidson County Chancery Court, asking the court, among other things, to declare that the companies’ 2000 property deals exceeded fair market value — ElderTrust paid more than $40 million when the nursing homes were worth about $18 million — and that NHI and NHC have consistently charged ElderTrust excessive management fees and exerted “adverse and abusive dominion and control” over the entity.
NHI in 2011 proposed to buy back ElderTrust’s properties but was thwarted by Tennessee Attorney General Robert Cooper. After a revised offer also failed, Cooper moved in September of last year to put ElderTrust in receivership so its finances can be fixed.
ElderTrust’s suit is the third such case in four years to be filed against NHI and NHC. Last fall, an entity called SeniorTrust sued the companies in similar fashion. That complaint came a few years after the new board of Care Foundation of America had agreed to a settlement with NHI whereby the latter would buy back other nursing homes and leave Care Foundation with $44 million in the bank.
ElderTrust’s suit asks for a declaratory judgment, but doesn't mention a value. NHI officials, in a filing with the Securities and Exchange Commission, say they NHI “adamantly” deny ElderTrust's claims and will defend themselves in court.
As in the cases of Care Foundation and SeniorTrust, Paul Davidson and Frances Fenelon of Waller are representing ElderTrust. View the full complaint here.
- ALEX B FRUIN INHERITANCE TRUST; CANDACE F STEFANSIC INHERITANCE TRUST; CANDANCE F STEFANSIC INHERITANCE TRUST; FRUIN, ALEX B TRUSTEE; FRUIN ALEX B INHERITANCE TRUST; STEFANSIC, CANDACE F TRUSTEE; STEFANSIC CANDACE F INHERITANCE TRUST; STEFANSIC CANDANCE F INHERITANCE TRUST
- ROSS, BRIDGETT D
- COOKE, ETHEN LANYARD TRUSTEE; COOKE, ETHEN LEWIS ESTATE
- JACOBS, JESSICA ALEXANDRA; JACOBS, ERIKA BESS