While Bruce Rauner is a newcomer to the political scene, the GOP candidate is already in the hotseat with allegations that his private equity firm, GTCR, was involved in the gross mistreatment of nursing home residents. GTCR was founded in 1980, and according to a recent Tribune article, the company “generated billions of dollars” in profits. If Rauner is to win the primary election on March 18th, these revelations could come to haunt him and his efforts to take Democratic Governor Pat Quinn’s seat this coming fall.
History of Nursing Home Abuse?
In fact, there have been over a half-dozen cases of nursing home neglect against GTCR. These cases ranged from wrongful death to patient-neglect, and exceeded $2.3 billion in damages. In other instances, personal attorneys accused GTCR of moving their assets in order to dodge paying damage claims.
But as the Tribune reported, most of these lawsuits occurred after GTCR had ceased to exist. Furthermore, Rauner was not named in any legal documents. At the same time, he was chairman of GTCR when it became involved in the nursing home business and financed $1 million in Trans Health Care Inc. (THI) in 1998. Once Rauner began his bid for the governorship in 2012, however, he left GTCR.
In 2003, THI made another announcement of further expansion into the long-term health care industry, and acquired seven more firms. At that juncture, GTCR proudly declared THI as “one of the leading long-term care companies in the United States.” Shortly thereafter, the firm was hit with numerous negligence lawsuits, and the company’s net income of $9.4 million wound up being a net loss of $26.6 million.
It should not be forgotten, that Rauner was part of GTCR during this period of time, so it comes as no surprise that the blogger, No-Rauner, was quick to report on this story.
Furthermore, earnings for THI continued to suffer in 2004 and 2005. By 2006, lenders claimed the company had defaulted on loans. At the same time, they sold off part of their assetsto Fundamental Long Term Care Inc. Things continued to worsen, and by 2009, THI had entered receivership.
With each year worsening for THI, GTCR saw every dollar of its $60 million investment disappear, $20 million of which was lost in one year – 2006 – when the company tried to restructure THI’s finances.
Regardless of the details, this story doesn’t bode well for a rookie like Rauner, and it is more than likely that it will be something with which he will have to contend if he becomes a serious contender in the upcoming governor’s race.
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