Mon, 01 Dec 2025 16:24:32 -0800 marlon from private IP, post #19002721 /all private equity is a bad thing https://finance.yahoo.com/news/bankrupt-genesis-health-picks-insider-000704190.html Bankrupt Genesis Health picks insider bid for its nursing homes Signage is seen at the United States Bankruptcy Court for the Southern District of New York in Manhattan, New York City, U.S., August 24, 2020. REUTERS/Andrew Kelly · Reuters By Dietrich Knauth Mon, December 1, 2025 at 7:07 PM EST 3 min read By Dietrich Knauth Dec 1 (Reuters) - Genesis HealthCare said on Monday that an insider bid had won a bankruptcy auction for all of its assets, which would allow the same ownership group to maintain control of the company's nursing homes while using bankruptcy to slash debts and medical malpractice claims. The winning bid was submitted by CPE 88988 LLC, an affiliate of Genesis' private equity owner, Pima Capital Partners, according to court documents filed in bankruptcy court in Dallas. The bid includes $40 million in cash, as well as agreements to assume certain debts and bankruptcy expenses incurred by Genesis. The company will seek approval of the sale at a Dec. 10 court hearing. The sale may be opposed by Genesis' court-appointed creditors committee, which argued in a Nov. 25 court filing that the auction appeared to be "heavily skewed" in favor of the insider bid. Genesis' decision to sell to insiders was criticized by Massachusetts Senator Elizabeth Warren, a Democrat, who said Monday that the proposed sale would reward the very people who she says caused the company's decline by loading it up with debt and subjecting patients to substandard care. Genesis did not immediately respond to a request for comment on Warren's statement. Genesis, which operates 175 skilled nursing facilities and assisted living facilities in 18 U.S. states, filed for bankruptcy on July 9 with over $2.3 billion in debt. The company faces more than 200 lawsuits alleging malpractice, wrongful death or other injury. At the time of its bankruptcy, the company said it owed $259 million to plaintiffs, including settlements that the company had agreed to pay, while plaintiffs have argued the company owes far more. Genesis was bought by private equity firms JER Partners and Formation Capital in 2007, and those owners added to the company's debt through a series of acquisitions while selling off the company's real estate. ReGen Healthcare, a subsidiary of Pinta Capital, bought most of the company's equity in a 2021 deal that also added to the company's debt. Genesis began its auction on Nov. 18, with CPE 88988 serving as a "stalking horse," whose initial bid would be accepted unless higher offers came in. Genesis received two other bids, and the subsequent auction led CPE 88988 to improve its bid by increasing the cash portion of its offer by $25 million from its $15 million starting point, according to court documents. Other private equity-backed health companies that have filed for bankruptcy in recent months include hospital chains Steward Health and Prospect Medical Group. Both of those companies, like Genesis, took on large amounts of debt during private equity buyouts, sold their real estate, and eventually collapsed into bankruptcy. The case is Genesis Healthcare Inc, U.S. District Court for the Northern District of Texas, No. 25-80185 Read more: Bankrupt nursing home company Genesis pauses lawsuits against owners, employees Hospital operator Prospect Medical files for bankruptcy Steward Health gets green light to repay creditors with litigation proceeds (Reporting by Dietrich Knauth in New York) Mon, 01 Dec 2025 16:25:25 -0800 marlon from private IP Reply #17623488 https://www.wsj.com/articles/doctors-warn-accountants-of-private-equity-drain-on-quality-you-could-be-next-1be0f0fd?mod=hp_lead_pos11 Doctors Warn Accountants of Private-Equity Drain on Quality: You Could Be Next Early opponents of corporate influence in healthcare see parallels in another trusted profession By Mark Maurer Follow May 7, 2025 6:00 am ET Closed hospital sign with information about the nearest hospital. Boston’s Carney Hospital closed last year after its owner, Steward Health Care, filed for bankruptcy. Steward was formerly private-equity backed. Photo: Steven Senne/Associated Press Many doctors have decried private-equity firms’ push into healthcare, saying patient care has eroded under their ownership. Now, as these firms make similar inroads in accounting, some medical professionals have a warning for CPA firms: Don’t make our same mistakes. Drs. Bob McNamara and James Keaney, both former longtime emergency-room physicians, were early critics of private equity in healthcare who now say such ownership in accounting could shake trust in an industry that investors rely on for getting trustworthy financial information about companies. “If accounting holds itself out as an ethical profession, which puts the client first, they should have never let private equity in because that’s what we did and it hurt the patients,” said McNamara, a professor and chair of emergency medicine at Temple University. Grant Thornton Washington DC regional office at sunset. Audit and consulting firm Grant Thornton last year sold a stake in its U.S. unit to a group led by New Mountain Capital. Photo: J. David Ake/Getty Images Roughly two dozen of the 100 largest U.S. accounting firms have either sold an ownership stake to private-equity investors or been acquired by a firm that has done so since 2021. The increasingly close ties between private equity and auditors have raised concerns over the potential threat to the independence of auditors, who are intended to be objective assessors of financial information. Accountants worry the typical three- to five-year investment window is detrimental to the CPA firms’ long-term plans for maintaining service quality and could spur them to accept higher-risk clients. But private-equity firms say they provide needed capital that allows accounting firms to boost hiring and improve their services. They say their investment in healthcare has helped hospitals and other medical practices, some of which were in dire financial straits, to continue offering care to patients, especially in regions where medical options are limited. Private-equity sponsors of accounting firms have said cost-cutting isn’t part of their mission. Early opponents In the ’90s, McNamara and Keaney were particularly vocal in warning of risks from hospitals contracting out emergency-room services to profit-making companies that often hired inadequately trained doctors. Both were interviewed about their concerns in a “60 Minutes” segment in 1993, which helped put the issue in the public spotlight. Many contract-management groups were eventually acquired by private-equity investors. “There’s been a reduction in the quality of care, a massive reduction in the trust of institutions,” said Keaney, who wrote the 1992 book “The Rape of Emergency Medicine.” “The analogy with accounting is perfect. If you compromise the auditors, then it’s a total coverup.” “I tell people to watch ‘The Pitt,’” McNamara said, referring to the popular emergency-room TV show, which depicted risks posed by private equity. Keaney and McNamara served as the first presidents of the roughly 8,000-member American Academy of Emergency Medicine trade group founded in 1993, a key opponent of private equity. The American Medical Association, America’s largest trade group for doctors representing more than 290,000, has opposed the corporate practice of medicine since at least the 1990s. That includes efforts by certain private-equity and hedge funds “that threaten physicians’ autonomy and operational authority in clinical care,” said Dr. Bruce Scott, AMA president. The overlap The healthcare industry has experienced a series of private-equity megadeals, including the $33 billion leveraged buyout of HCA—now called HCA Healthcare—by a group led by Bain Capital and KKR in 2006. The debate over corporate acquisitions of medical providers recently amplified in the wake of the bankruptcies of Steward Health Care and Prospect Medical Holdings, two formerly private equity-backed hospital systems. Meanwhile, more private-equity heavyweights such as Blackstone and Hellman & Friedman have made bets on accounting firms. Baker Tilly booth at the Expo Real trade fair in Munich. Baker Tilly, which is partially owned by Hellman & Friedman and Valeas Capital Partners, last month agreed to merge with Moss Adams, a $7 billion deal that would make the combined firm the largest yet to have received private-equity investment. Photo: Alexander Pohl/ZUMA Press Mark Reiter, professor and residency director of the University of Tennessee Health Science Center, said he has observed private-equity ownership of hospitals that resulted in decreased staffing and the hiring of people with less training and supervision. “You could see a similar thing in accounting that if you have a higher caseload, you might not be in the best position to do your best for each individual client,” said Reiter, a former AAEM president who has an MBA. Hospitals in some cases have obtained private-equity investments for the boost in capital and management expertise. Accounting firms, though not struggling, say the investments help address costly technology investments and provide outside business savvy. SHARE YOUR THOUGHTS Is it a good idea for accounting firms to sell stakes to private-equity firms? Join the conversation below. Private-equity firms like accounting firms for their steady recurring revenue from areas such as tax and audit. The investors generally aim to accelerate revenue growth by helping their targets buy up smaller accounting practices and ramp up offshoring, similar to the strategy employed in other markets such as carwashes and plumbing. Accounting firms’ new part owners have said they are investing heavily and aren’t on a cost-cutting mission. Minority stakes in accounting firms by outside investors might not be inherently harmful, said Dr. Jane Zhu, a physician and associate professor of medicine at Oregon Health & Science University. “Growth capital may allow private practices to expand, to keep up with IT, staffing demands and expansion,” Zhu said. “On net, there’s less empirical evidence about the effects of PE investment outside of leveraged buyout models.” The oversight Advertisement Accounting firms are generally prohibited by law from auditing their private-equity investors directly or funds that the private-equity firm manages. The rules are less specific when it comes to portfolio companies that the private-equity owner backs. PE-backed accounting firms set up structures to separate audit and nonaudit practices to comply with rules prohibiting the impairment of auditors’ objectivity. That way, private-equity firms can take a stake in an accounting firm and still comply with rules. Certified public accountants also need to represent the primary ownership of an audit business, ranging from 50% to fully owned depending on the state, according to U.S. CPA licensing laws. The closest parallel to those protections is a ban on the corporate practice of medicine, which most U.S. states have but which some groups have called ineffective. States such as California and New Mexico so far this year have introduced legislation that would give state authorities power to penalize corporate investors that influence medical care. Newsletter Sign-up WSJ | CFO Journal The Morning Ledger provides daily news and insights on corporate finance from the CFO Journal team. Tue, 02 Dec 2025 13:41:39 -0800 whiteguyinchina from private IP Reply #10561899 Yea absolutely the case. These private equity firms I believe go around certain markets disguised as no name subsidiaries and buy out doctor practices. The they aggregate to be another no name subsidiary group of physicians. Automate phone service so you can never reach a human. Answering service based in Philippines or Delhi. Health care is truly awful due to these participants. And I say this as a person who has been to hospitals in many other countries.Replies require login.
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