The Commercial Observer had an interesting article on the recent litigation involving Sava owners and operators and how expert accountants were needed to explain the complex web of corporate shell games. Two top forensic accountants were retained in a decisive battle in a legal war for control of about 170 nursing homes.

The trial in New York Supreme Court had its origins eight years ago, when real estate investor Ruby Schron teamed up with his lawyer, Leonard Grunstein, in a labyrinthine $1.3 billion leveraged buyout that created SavaSeniorCare. At issue for the two expert witnesses: the exact whereabouts of $100 million.”  In the nursing home case, the accounting helped determine that Mr. Schron could acquire the company without any further investment by simply assuming the debt. On Mr. Schron’s side was Harvey R. Kelly. Providing expert testimony for Defendants was David S. Williams. The rival accountants’ task was to sort out transactions among some 30 people and entities involved in the buyout, as well as the movement of money through an escrow account from entities on Mr. Schon’s side of the deal to Mr. Grunstein and his companies, to establish whether, and how much of, the money was lent.  The case, which hinged on how much money from a $100 million loan by Mr. Schron actually found its way to Sava. The accountants in Schron v. Grunstein were more than $110 million apart in their estimates of how much money was lent.

“In 2004, Mr. Grunstein and investment banker Murray Forman approached Mr. Schron with a proposal to buy Mariner Health Care Inc., a public company that operated more than 250 nursing homes and owned real estate associated with about 170 of them.”  “Grunstein and Forman proposed a complex transaction employing a ‘PropCo/OpCo’ structure whereby Old Mariner’s real estate would be separated from the nursing home operations.”

A newly formed company, National Senior Care Inc., bought all of the shares of Old Mariner, then sold the real estate to one of Schron’s companies, SMV. That entity then leased the properties to another newly formed company, SavaSeniorCare, controlled by Mssrs. Grunstein and Forman. National Senior Care retained the operations of about 100 nursing homes located on properties that were leased from third parties.

While neither Mr. Grunstein nor Mr. Forman put any of his own money into the deal, Mr. Schron raised about $1.1 billion in financing, acquiring real estate valued at about $800 million. According to documents signed at closing, the financing included a $100 million loan to the owner of Sava that gave him an option to acquire the company, the judge wrote.

Mr. Kelly said a promissory note signed by both sides at the time of closing—and amended and restated in 2006 when a second, $20 million loan was made—was the best evidence that the loan existed. And he said documents showed that the nursing home company had made use of the money, including making a $65 million loan to the “New Mariner” entity on the day of the transaction.

Documents included “audited financial statements of SavaSeniorCare that an outside independent audit firm rendered the opinion that [an entity controlled by Mr. Grunstein] had contributed $100 million,” he said. “So, you’ve got years’ worth of very consistent documents demonstrating that. I find that the most credible evidence.”

The biggest problem Murray Forman and Leonard Grunstein had was their obvious lack of credibility.  “Apart from the fact that all of the documentary and non-party witness evidence contradict their testimony, their evasive answers and manner on the witness stand left the court with a firm belief that both gave testimony that was less than candid,” the judge wrote. He ordered the defendants to proceed with the transfer of control of the company “without further delay.”


The child of a deceased long-term care resident is not bound to an arbitration agreement because she signed it on behalf of her mother — not herself — an Illinois court ruled.

Following the death of her mother, Joyce Gott, at Odin Healthcare Center, Sue Carter filed a wrongful death claim and sought damages for negligent care against the parent company, SSC Odin Operating Company, LLC. Odin countered that Carter and Gott had signed binding arbitration agreements in 2005 and 2006.  The court, however, agreed with lower courts that Carter “cannot be compelled to arbitrate the wrongful-death claim against defendant.”

Plaintiff, as Gott’s personal representative in the wrongful-death action, is merely a nominal party, effectively filing suit as a statutory trustee on behalf of the next of kin,” Judge Mary Jane Theis wrote. “Plaintiff is not prosecuting the wrongful-death claim on behalf of Gott, and thus plaintiff is not bound by Gott’s agreement to arbitrate for purposes of this cause of action.”


Below is Dechert’s press release about the recent lawsuit involving Murray Forman and Leonard Grunstein for ownership and operational control of the national for profit chains Sava Senior Care, Mariner Health Care, Inc., and Fundamental Long Term Care.

“Following a two-week bench trial before Justice O. Peter Sherwood of the New York Supreme Court, Dechert achieved a victory today on behalf of Rubin Schron and Cammeby’s Equity Holdings with the court’s ruling that Cam Equity may acquire SavaSeniorCare LLC, a national nursing-home company, through the assumption of $100 million in outstanding debt.  In so doing, Justice Sherwood rejected the claims of Sava’s owners, Leonard Grunstein and Murray Forman, that Schron had fallen $120 million short on his lending commitments as a “prevarication” and concluded that the “mendacity of Grunstein and Forman” entitled their story to be given no weight.

In its decision, the court ruled that Cam Equity “is entitled to reap the benefit of its bargain now” and ordered Grunstein, Forman, and their companies “without further delay” to move forward with transferring control of the company to Cam Equity.

The trial ruling represents the latest victory for Dechert in its longstanding representation of Schron, Cam Equity and affiliated companies in litigation regarding the control of a multi-billion nursing-home company and related fiduciary duty and malpractice claims brought by Schron against the operating company’s owners and Schron’s former attorneys and investment banker.

The victory follows a series of rulings that Dechert has won on behalf of Cam Equity and affiliated companies in seeking to vindicate their rights to acquire SavaSeniorCare and two other nursing-home companied controlled by Grunstein and Forman. Previously, the New York Supreme Court’s Appellate Division, First Department, affirmed an earlier victory before the New York Supreme Court (Commercial Division) upholding the validity of the Sava option. The First Department issued an order resolving another Schron-related lawsuit, concerning a separate option that a Schron company, Cammeby’s Funding LLC, has to acquire one-third of the shares of Fundamental Long Term Care Holdings LLC.  The New York Supreme Court has also granted summary judgment in favor of Cam Equity’s right to acquire two-thirds of Mariner Health Care, Inc.

“We are extremely pleased with the court’s decision,” said Dechert chairman and litigation partner Andrew J. Levander, who led the representation of Schron and Cam Equity along with partner Steven A. Engel. “Today’s ruling confirms that Mr. Schron fulfilled all of his commitments in connection with these transactions and squarely rejects the incredible stories that the defendants have advanced to obstruct Mr. Schron’s contractual rights. Per the court’s decision, Cam Equity should now be able to move forward with acquisition.”

Caption: Schron et al. v. Grunstein et al., case number 650702/2010, in the Supreme Court of the State of New York, County of New York.

“Three Myths of Senior Living Communities” is an article written by Dwayne J. Clark, founder and chief executive officer of Aegis Living.  He was nice enough to allow us to share it with our readers.

It’s difficult to overcome stereotypes of senior living communities. Despite the fact that the level of available care and amenities, and the choice and type of facilities, have evolved significantly over the past several decades, people still tend to think of senior housing as the “old folks’ homes” of the past: antiseptic, white-walled, linoleum-lined institutions with cold nurses, hot temperatures, and nasty food. It’s no wonder then that the majority of people continue to buy into three myths about senior living institutions that are not only flat-out wrong but can actually be detrimental to the well-being of their aging loved ones. The three myths of senior living communities are:

1. All senior housing options are the same. The reality is that today’s senior living industry is similar to the hotel industry with a range of choices for every lifestyle, need and budget. You can find low-end chains that offer only the very basic in care and amenities, similar to a Motel 6. There are family-run operations, set up in residential homes, not unlike bed-and-breakfasts. And then there are high-end luxury options, comparable to a Four Seasons hotel. Too often, family members and seniors avoid even considering senior living options out of fear of the unknown and a misunderstanding of what present-day senior communities are all about. They are, unfortunately, relying on outdated childhood memories of when a grandparent or a great-aunt went off to a nursing home and never came back.

This does not have to be the case. At the higher end, senior living communities can provide lifestyle activity coordinators instead of program directors, and employ chefs instead of dieticians. They can offer on-site spas and appropriately equipped gyms, massage therapy services, manicures and pedicures, movie theaters, outdoor gardens, and gourmet dinners with wine on the menu. One new site even has a “man cave,” complete with pool tables and beer taps.

2. Entering a senior living community actually hastens the end of someone’s life. Assuming that a senior is better off “aging at home” can result in unnecessary suffering and even tragedy. Many seniors who could benefit from just a little added care are often found living alone, far away from family, largely isolated and devoid of much human interaction, and typically at high risk of physical falls, malnourishment, and depression. These seniors are perfect candidates for an assisted living community because, once they are living in a place where they have access to medical care, personal assistance, medication management, good nutrition, opportunities for mental and physical activity, and a chance to make friends and socialize, they truly thrive. In fact, several new studies show that not only does a move to an assisted living community not hasten a resident’s demise but, in fact, it can actually ensure a greater quantity—and a better quality—of life.

At many senior living communities there are residents who have renewed their childhood hobbies, or taken up new ones like writing, painting or billiards. There are residents who always have a dinner or coffee companion. They can enjoy on-site book groups and religious services. They can play checkers or Wii. Residents often enjoy unexpected romances and, in some cases, marriages. Family members, freed from the worry and guilt of seeing their loved ones in less-than-ideal circumstances, tend to visit more often, strengthening long-worn family ties through new opportunities for quality time and stress-free activities.

3. Only the very wealthy, and the very poor, can afford to live in a senior living community. The fact is that retirement and assisted living communities have been consciously created by senior housing developers to be very affordable for middle-class consumers. The monthly cost of assisted living varies, but the average for a more upscale residence is between $4,200 and $6,200 a month. At first glance, that sounds like a lot of money, and many a family member immediately thinks, “There is no way my mother can afford that.”

But the cost of assisted living needs to be carefully compared with the total cost of living at home. Ongoing expenses of seniors staying in their houses might include rent or mortgage payments; property taxes and homeowners insurance; utilities, such as electricity, heating oil or propane, water, trash pickup, cable, phone and Internet service; home maintenance costs, including lawn care, snow removal, tree care; routine and major repairs to the home (and appliances and other needed home equipment like an air conditioner or furnace); car maintenance; and food and cleaning supplies. Additionally, as a parent or sibling ages, there are likely to be new costs including outside help with laundry, housekeeping, home upkeep and meal preparation; real-time monitoring devices and medical equipment; home health care; and transportation for medical appointments and other necessities. Those expenses, when taken in their entirety, are likely to be almost as much as or equal to the flat-fee monthly cost of an assisted living community. And most people are surprised when they realize that not only can their parents afford to live at one of these communities, but they actually have leftover funds.

Some seniors, of course, won’t have quite enough monthly income to pay the total or to pay for incidentals and will have to begin to tap their financial assets, whether that means selling their home, pulling funds out of an IRA or 401K or beginning to pay down their life savings. In other cases, children or siblings will help pay for the difference. And there are other options as well. Couples can share a unit, making for a discounted overall rate. Many communities offer smaller studio apartments and two residents can share a two-bedroom suite, which helps cut the monthly cost.

What most aging seniors need is some oversight by professionals who understand their unique needs. They need to be treated with kindness and dignity, like any other person whether they’re still sharp or are prone to forgetfulness, and whether they remain physically strong or are in need of a walker. Seniors will find all of that in abundance at today’s retirement and assisted living communities. For new residents, living away from the life they’ve always known is an adjustment, but—more often than not—they quickly realize that it’s a change for the better. And their family members and other loved ones soon realize that the three myths about senior living communities are just that.


Dwayne J. Clark is the founder and CEO of Aegis Living, currently with 28 senior living communities in Washington, California, and Nevada, and the author of “My Mother, My Son.” Visit him online at

The National Institute on Aging (NIA) announced the expansion and updating of NIHSeniorHealth, the National Institutes of Health (NIH) health and wellness website designed for older adults. The redesigned site includes more menu choices, longer pages, and a new search feature that offers access to a wider range of senior-related health resources. Presented in an inviting, colorful, and still easy-to-use format, the new NIHSeniorHealth features nearly 60 health topics, more than 150 open-captioned videos, as well as frequently asked questions, quizzes, and web training materials—all especially designed for boomers and their parents.


Health information is one of the key topics that older adults search for online according to the Pew Research Center, and since its launch in 2003, NIHSeniorHealth has been an accessible source of reliable, up-to-date health information for adults 60 plus. Built to address cognitive and vision changes that commonly occur with age, NIHSeniorHealth includes senior-friendly features such as large type, simple navigation, and open-captioned videos that make the site especially easy for older adults to use.


Current topics cover healthy aging, memory and mental health, medical care, caregiving, and safety issues. Visitors to the site can also learn about ways to prevent, diagnose, and treat aging-related diseases and conditions such as COPD, arthritis, cancer, and glaucoma. Coming soon are topics on prescription drug abuse, hip replacement surgery, and older driver safety.


Visit the new NIHSeniorHealth at . Be sure to sign up for free updates and forward a link to the site to older friends and relatives.



The Philadelphia Inquirer had an article on the profitability of the senior housing sector driven by investment companies.  In the third quarter of 2011 alone, 39 senior housing deals worth $5.5 billion were completed, primarily by real estate investment trusts that specialize in housing for the elderly. That figure includes independent-living and assisted-living communities, but not nursing homes.

The total value of senior housing deals in the quarter ended Sept. 30 was greater than the combined total in the previous two full years, according to the National Investment Center for the Seniors Housing & Care Industry in Annapolis, Md.

Driving the consolidation in senior housing is the ability of real estate investment trusts to borrow cheaply in conjunction with the resilience of senior housing during the recession, giving investors confidence that strong returns will continue.

Steve Monroe, editor of the trade newsletters SeniorCare Investor and Senior Care Acquisition Report in Norwalk, Conn., cited the relatively small drop in the senior housing occupancy rate during the real estate collapse of recent years as reason for its attractiveness to investors.

Senior housing includes independent living and assisted living, which is for the elderly who can no longer live safely on their own but who do not need the more intense level of care provided in nursing homes.  For investors and operators, assisted living has an advantage over nursing homes in that it is not very dependent on government funding.  Assisted-living residents typically use private resources to pay rent.



CNN Money had an article about the epidemic of "dumping" and how budget cuts will increase this tragic problem.  For the elderly, state budget cuts could mean losing their beds at the nursing home. Here’s a look at what’s at risk for many of the nation’s elderly.

Shuttering nursing homes
Among the most dramatic of the proposed cuts is the severe reduction in Medicaid reimbursement rates to nursing homes in Texas. Facing a shortfall of up to $27 billion, state lawmakers want to reduce the rate by 10%. But payments to nursing homes would plummet by a total of 34% because they would also lose federal matching funds.  This would result in the closing of 850 of the state’s 1,000 nursing homes, forcing up to 45,000 elderly residents to find other accommodations, said David Thomason, chair of the Texas Senior Advocacy Coalition.

Losing their center
If New York State does not restore $27 million in funding for New York City’s senior centers. Without this money, Mayor Michael Bloomberg has said he’ll have to close 105 of the city’s 256 centers.  Most center’s services are critical to keeping senior citizens living at home, said David Gillcrist, executive director of Project Find.  They receive a nutritious meal and take classes that improve their balance, strength and confidence. Equally as important, they are able to socialize with friends and not become isolated and depressed.

Meals on Wheels saved for now
Senior services agencies in Georgia looked like they’d lose a million dollars of funding for Meals on Wheels. Agencies prepared to stop feeding a total of 138,000 elderly residents. Georgia reduced its support for Meals on Wheels in 2009, supplanting it with $1 million in federal stimulus money. That federal funding is running out this year. Gov. Nathan Deal did not replace it with state money.

Lawmakers agreed that the program was too important to gut. The state Assembly restored the funding in early March by cutting some other contracts in the budget, and the Senate is expected to follow suit soon.



The Asheville Citizen Times reported that Senior Care Group Inc. of Tampa which owns nursing homes in Western North Carolina has agreed to pay nearly $1 million to settle federal allegations that it defrauded the Medicare program following a multi-year investigation by the FBI and U.S. Department of Health and Human Services.  Investigators found that Senior Care’s rehabilitation contractor, Evergreen Rehabilitation LLC of Kentucky, put intense management pressure on its employees to maximize billing. Evergreen billed for unnecessary services and forwarded the billings to Senior Care, which then wrongfully billed those costs to Medicare.

Tompkins said the investigation began when the government received information about billing fraud at Sunrise Rehabilitation Center in the McDowell County community of Nebo and Brookside Rehabilitation Center in Burnsville.

Investigators determined that Evergreen routinely instructed its employees to “get their numbers up” or else be fired, Tompkins said. They also found that Senior Care failed to adequately supervise its contractor.

As a condition of the settlement, Senior Care was required to enter into a Corporate Integrity Agreement with the government under which it will be monitored for five years.

The Des Moines Register reported the investigation and charges filed against Emeritus (one of the nation’s largest senior living companies) for operating an unlicensed assisted living facility and misrepresenting their licensure status to the public.  Emeritus at Silver Pines is a Cedar Rapids home licensed as a residential care facility that can provide personal assistance and supervision, but no nursing care.  Over the past 30 months, the owners of the 72-bed facility have allegedly promoted the home as an assisted living center that is authorized, equipped and staffed to provide residents with a relatively high level of medical assistance and care. The Iowa Department of Inspections and Appeals has temporarily barred the home from accepting new residents, imposed a $13,000 fine and ordered the owners to hire a new administrator.

Emeritus is the nation’s largest assisted-living company, with annual revenue of $900 million. It operates 308 senior-living communities in 36 states, with a total potential capacity for 32,300 residents. The chain recently purchased an additional 140 homes from the bankrupt Sun West chain of care facilities.

Emeritus could face criminal charges for falsely claiming to be a state-licensed assisted living center.  It’s a crime in Iowa for a company to falsely claim that it’s a state-licensed assisted living facility, h, and the Iowa Department of Inspections and Appeals plans to refer the matter to county prosecutors for consideration of criminal charges.

Disabled Iowans – some near death and in need of constant supervision or skilled nursing care – signed contracts with the home that specifically described the facility as "licensed by the state of Iowa as an assisted-living facility." In some cases, residents were referred to Emeritus by physicians who were led to believe that the home was licensed to provide skilled nursing care.

Company records indicate the home has been charging each of the residents up to $3,800 per month in fees. In at least one instance, it allegedly charged a resident $10,000 as a nonrefundable "move-in fee."

The company’s false claims should have been uncovered in March when inspectors visited the home.  Emeritus was cited for having two residents whose medical needs could be met only by an assisted living center or a nursing home. The home promised that in the future it would only admit people who were suitable for a residential care facility. In July, inspectors revisited the home in response to a complaint and saw the problem was much larger in scope than they had previously believed. For at least 30 months, the home had been holding itself out as an assisted living center. Some of the residents were being treated for cancer, kidney failure and severe dementia. Some were receiving hospice care.  In all, 17 residents were judged to be in need of care above and beyond what could be legally provided by the home.

State inspectors determined the home’s new administrator, hired just a few weeks before, had no education or experience pertaining to the management of a residential care facility and didn’t meet the minimum legal requirements to run such a facility.

The home’s website and automated telephone system continued to promote the home as "the assisted living community of choice."

Emeritus Senior Living owns two other Iowa care facilities: Northpark Place Senior Living Community in Sioux City, a residential care facility the company purchased on Aug. 5, and Emeritus of Urbandale, a fully licensed assisted living facility that has faced numerous sanctions from the state in the past 18 months.  At one point, the Urbandale facility’s on-call registered nurse was a company official who lived in Urbana, Ill., a six-hour drive away.

One employee of the Urbandale facility allegedly admitted to inspectors that she had destroyed a patient’s medical records and then created new, fictional reports to conceal the fact that a dying resident’s children had to administer medication to their parent on several occasions because no nurse was available in the facility.

The Urbandale home has also been cited for housing a violent individual who assaulted and sexually fondled other residents over a period of several days until police were called and he was escorted from the building.


 Ken Teegardin had a traumatic time finding care for his father in Georgia so he created his own website ( with the goal of presenting the widest variety of senior care options (especially nursing homes) with objective information.

He has spent a lot of his personal time compiling a comprehensive list of senior care options so that others will have better support than he did when he had to make the critical decision.  The site is:
– The most comprehensive senior directory on the web. Users can search by care type, location, organization name, review status and more.
– Totally unbiased. The directory is based on government data combined with other independent sources. It is NOT a paid-inclusion corporate site so every senior care organization gets fair exposure.

The site features:
– Location based search – His advanced Geo-location search shows the nearest 50 senior care options to any desired location based on a zip code, city, or street address. Click on the map and get instant driving directions to each option.
– Hot lists – Users can build a custom list of possible services and print that list with full contact information.
– Complete listing information – We provide full contact information, photos, costs, and other details (where available) so users can compare apples to apples.
– Safe usage – There is no data taken about users. The goal of the site is share information, not to gather sales leads.
– Reviews – The site includes both positive and negative reviews.

AssistedSeniorLiving also donates $1 to non-profit senior care organizations for every review created.