If you have your family in a nursing home, you know that both medical and nonmedical personnel treat them. This means that if your loved one experiences nursing home abuse or neglect, it could be medical malpractice, general negligence or some other personal injury. And, knowing that you have this many options, should you need them, may make you feel better. However, nursing homes have been creating ways to avoid full liability for claims filed against them.
Unless you are a lawyer, it is unlikely that you asked or researched the nursing home’s corporate structure. But many nursing homes create several entity layers to avoid liability. For example, the doctor who periodically sees your family at the nursing home may be a contractor. The people who manage the nursing home may be contractors and every employee could be employed by another entity or contractors themselves.
The Harrisburg or Philadelphia, Pennsylvania, company that you contracted with may not own the building or even be the only lessor. The company itself, even if it is a multistate company, has single-asset entities that own individual nursing homes who are part of portfolios that are part of larger portfolios.
They do this so that when you claim medical malpractice, they can push that liability off to a contractor or other entity to limit the liability of the ultimate parent corporation. However, that is who you want to sue because that is the entity with the most resources and is the one in control of everything.
Companies are using bankruptcy in two ways. First, they are restructuring their entities to transfer liabilities to new Harrisburg or Philadelphia, Pennsylvania, entities that limit their overall exposure and your ultimate ability to find civil justice.
However, even if they do not restructure, bankruptcy (and the threat of bankruptcy) is used to limit your ability to recover. This is because, once bankruptcy is filed, the entities and people who get paid first are secured creditors (who may include entities that are owned by the owners of the nursing home themselves). This means that litigants, even those who win their case, can only collect from the leftovers. To give you an idea of how bad this can be, recent cases show that litigants will only have access to less than 1% of company assets after winning their cases.
What can be done?
First, do your research beyond Google and Yelp. Ask your Harrisburg or Philadelphia, Pennsylvania, attorney to do litigation searches and look at the corporate structure. Inquire about insurance limits. And, most importantly, when you suspect malpractice, call your attorney immediately.