The careful design of corporate agreements can protect operators who are trying to reduce the risks associated with the distressed properties of former entrepreneurs, according to legal experts.
Arnall Golden Gregory LLP briefed a JDSupra case, Milmoe v. Paramount Senior Living, including a negligence lawsuit filed against current and former senior citizens of West Virginia. Finally, two courts made the decision that the current employee cannot be held liable for the charges of bad behavior that occurred under the previous company.
The results provide information for other organizations.
Lawsuit began in 2019
Tony Milmoe filed a negligence and wrongful death lawsuit in August 2019 against Passage Midland Meadows Senior Living in Ona, WV. The inquest stated that the multiple escapes and falls resulted in medical bills, pain and suffering, and, ultimately, death for resident Thelma Sturgeon in November 2017.
Toledo, OH-based real estate investment trust Welltower owns the community and leases it to Delaware-based Passage. This may interest you : State Offers Summer Travel Tips | Lifestyle | thedailynewsonline.com. Filed for Chapter 11 bankruptcy protection in March 2017.
Shortly after Sturgeon’s death, the bankruptcy court granted Passage’s request to enter into a transfer of operations agreement with Paramount Senior Living to Ona LLC, which became effective in January 2018. Paramount renamed the community of Cabell Midland. Welltower remains in charge.
According to JDSupra’s article, the deal transferred “assets” in the form of community supplies to Paramount; it is not a sales contract. Assets listed included linens, appliances, medical supplies and office and maintenance records. Other assets, including cash, accounts payable and stock, were not included in the purchase agreement.
‘A clearer picture’ result
Milmoe’s lawsuit was filed after the agreement between Passage and Paramount, naming both of them as defendants. To see also : Michigan’s major health system restores abortion status. The Circuit Court of Cabell County ruled in February 2021 that Paramount “is not vicariously liable for alleged misconduct” by the former company.
The West Virginia Supreme Court agreed with the lower court’s decision, found on June 13 that “Paramount merely operated a defunct nursing home formerly operated by Passage, ” and that “he just hired a former employee and served. he didn’t have enough previous customers to hire a new manager to replace the former manager.”
The court found that Paramount only acquired small assets and that all or most of the assets of the former company must be transferred in order to make the current company a successor company.
“Milmoe offers prospective senior housing investors in West Virginia a clear picture of how to protect themselves from the risks of liability arising from the actions or inactions of the former,” said a author. “Incoming operators can better structure their commercial agreements or reduce such obligations.”
According to the authors, the case offers some legal guidance for the upcoming companies, especially if the first company is insolvent.
“Under Milmoe, when assessing the possibility of changing the risk, the prospective employee must consider the structure of the transaction and the agreement that must be put in place to protect himself,” he said. graduate writers.
