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* The Tribune has dispatched a reporter to cover the federal bankruptcy trial of a nursing home company once owned by Bruce Rauner’s firm. This part of the story is really disturbing…
At the trial in U.S. Bankruptcy Court, plaintiff attorneys played videotaped deposition testimony from an elderly graphic artist with no nursing home experience who expressed bewilderment over how he came to be listed as the sole shareholder of a company that bought nursing home chain Trans Healthcare Inc. as it was in financial freefall in 2006.
“I don’t know that company,” Barry Saacks testified when asked if he remembered signing papers to buy Trans Healthcare. “Somebody must believe me.” […]
On the taped interviews, recorded in 2012 and 2014, Saacks often sounded disoriented and confused about many questions posed to him by lawyers, sometimes flashing a sense of humor about his level of ignorance of a company he purportedly owned. In the latter of the interviews, Saacks was seated in a wheelchair and wearing a hospital gown.
Heavyset and wearing a white beard that flowed to the middle of his torso, Saacks recalled having a few discussions about buying computer equipment with a lawyer he knew socially. That lawyer, Leonard Grunstein, is a business associate of New York real estate investor Rubin Schron who was a partner with GTCR in the nursing home chain. […]
Saacks said as far as he knew the deal for him to buy computers never went through. He said he never received any computers and he’s never seen any money from the business. However, Brett Baker, a lawyer for the firm that handled the stock sale to Saacks, has testified in a deposition that Saacks was paid cash to sign closing documents, something Baker said he raised concerns about at the time with his superiors because it was so unusual.
* Former AFSCME honcho Henry Bayer sent this snarky note to the folks on his e-mail list today…
I understand that Rauner’s secret plan to deal with Illinois’s $100 billion pension liability is to sign it over to Barry Saacks, the same guy he unloaded the nursing home liabilities on.
Those cynical folks who think Rauner’s just being cagey and has no plan to fix the pension mess don’t understand how business works and don’t know how to apply its “principles” to a stodgy, uncreative government .
Barry, hold on to your wallet if you still have one with anything left in it.
I’ve been telling Henry for months that he ought to start his own blog.
*** UPDATE 1 *** From the Quinn campaign…
Bruce Rauner Called to Explain Nursing Home Deceptions
Billionaire’s Lack of Truthfulness in Wrongful Death Suits Exposed By Press
CHICAGO - Republican billionaire Bruce Rauner was called on Tuesday to explain the outright deception he used to avoid responsibility for wrongful deaths at a chain of nursing homes he owned and controlled.
The Chicago Tribune reported Monday that Rauner was not being truthful when he claimed to have a distant relationship to Trans Healthcare Inc. (THI). In fact, the Tribune reported for the first time, Rauner was not only seeking to profit from the nursing homes but actually part of the group “calling the shots,” and deeply involved in day-to-day operations. He personally signed off on decisions there.
Equally disturbing, Rauner’s firm may have exploited an elderly, nursing home-bound man to be the fall guy in avoiding $1 billion in settlements for the horrific conditions that led to six deaths in Florida alone.
Democratic nominee for Lt. Governor Paul Vallas joined legislators and senior advocates Tuesday at a Chicago senior housing complex calling for answers.
“Bruce Rauner was in the driver’s seat at THI and he did not tell the truth. He did not tell the media the truth. He is not telling the people of Illinois the truth now. Why the deception? What more is he hiding?” Vallas asked.
“Bruce Rauner has a responsibility to tell us why he deceived the public about his control of this nursing home chain. He should be called to account for the deplorable conditions there under his watch and as a direct result of business decisions he made. And he should explain just why someone who so frequently dodges accountability should be placed in charge of agencies that serve our most vulnerable citizens in Illinois.”
“I’ve spent my career working to protect the most vulnerable, and these issues are close to my heart,” State Representative Greg Harris (D-Chicago) said. “How you treat our most vulnerable is a good indication of your values. First we learned that Bruce Rauner’s business record includes abuse and neglect that led to tragic deaths at his nursing homes in Florida. Now we are learning more about how Mr. Rauner handled this matter — he ducked responsibility and he didn’t tell the truth.”
*** UPDATE 2 *** Fact check from the Rauner campaign…
The Plaintiffs’ Charges Against GTCR With Regard To Barry Saacks And The “Sham” Company Were DISMISSED By The Federal Judge In March. “The complaint does plausibly allege that the Debtor was essentially created as a sham corporation. According to the complaint, the Debtor was formed for the sole purpose of receiving THMI’s liabilities, while its assets were secreted away to FLTCH. But there is no allegation that the GTCR Group had any actual involvement in the Debtor’s creation or that GTCR had any control over the Debtor.” (Memorandum Opinion On Motions To Dismiss, In Re: Fundamental Long Term Care Inc., United States Bankruptcy Court Middle District of Florida, Case No. 8:11-bk-22258-MGW, 3/14/14, p. 20)
GTCR Maintains That The Firm Had No Knowledge That Barry Saacks Was Involved In The Sale Of THMI. “Defendants expect Plaintiffs to make much ado about the role Barry Saacks played in the transaction. But neither Jannotta, Holdings, nor the GTCR Entities had any interaction with Saacks, much less knowledge that Saacks owned FLTCI. In a January 17, 2006 memo to GTCR’s Investment Committee, Jannotta stated that ‘Holdings has preliminarily agreed to sell Baltimore and THI of Nevada II, Inc. to Fundamental, which appears to be affiliated with ABE Briarwood Corp., and [THI] has preliminarily agreed to sell Management, Inc., to Fundamental (or an affiliate).’ Again, Defendants understood the buyers were affiliated Fundamental entities.” (OPENING STATEMENT OF DEFENDANTS GTCR GOLDER RAUNER, LLC et. al, In re: FUNDAMENTAL LONG TERM CARE, INC, United States Bankruptcy Court Middle District Of Florida, Case No. 8:11-bk-22258-MGW, 9/18/14, p. 7)
GTCR’s Contemporaneous Investment Committee Memos Show That GTCR Believed That Fundamental Long Term Care Holdings (FLTCH) And Fundamental Long Term Care Inc (FLTCI) Were One And The Same. “Holdings has preliminarily agreed to sell Baltimore and THI of Nevada II, Inc. to Fundamental, which appears to be affiliated with ABE Briarwood Corp., and [THI] has preliminarily agreed to sell Management, Inc., to Fundamental (or an affiliate).” (GTCR Investment Committee Memo, 1/17/06, p. 14)
posted by Rich Miller
Tuesday, Sep 23, 14 @ 9:51 am
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I second the blog motion.
Comment by Irked Tuesday, Sep 23, 14 @ 9:56 am
we should get updates about Barry. someone needs to worry about his welfare.
Comment by Amalia Tuesday, Sep 23, 14 @ 9:57 am
Lesson?
You go into business with GTCR and you are still wondering who the pigeon is at the table, it’s you.
I guess Phillip Green was too busy being the front guy for the Tangiers?
Comment by Oswego Willy Tuesday, Sep 23, 14 @ 9:58 am
“When pressed about the arrangement, Bruce Rauner said he was the Food and Beverage Director, before quietly leaving town.”
(snark)
Comment by Oswego Willy Tuesday, Sep 23, 14 @ 10:00 am
It seems Mr. Saacks was used, for some reason…
Comment by Mcleaniac Tuesday, Sep 23, 14 @ 10:02 am
The benefits of not dying in Bruce Rauner’s nursing home? You get to own it, yay!
Comment by Ducky LaMoore Tuesday, Sep 23, 14 @ 10:02 am
The Saacks angle on this nursing home story begs the question, where is the U.S. Attorney’s office in this matter? There certainly seems to have been fraud here. Saacks owning the nursing home mirrors the scam sketch in ‘Chinatown,’ where a bunch of people in an old folks home end up owning, unbeknownst to them, acres of orange groves in the San Fernando Valley. This whole thing is a con from start to finish.
Comment by Roland the Headless Thompson Gunner Tuesday, Sep 23, 14 @ 10:05 am
sketched in ‘Chinatown.’ (Typo…)
Comment by Roland the Headless Thompson Gunner Tuesday, Sep 23, 14 @ 10:07 am
I think it is against the law to financially defraud citizens who are senior or disabled, unable to understand what they are signing. This should be looked into right away. If Rauner is open to this type of abuse of seniors, what is he going to do to retired people in Illinois?
Comment by DuPage Tuesday, Sep 23, 14 @ 10:10 am
If this story is true it is deeply disturbing, borne by greed and avoidance of responsibilities.
Comment by Great Caesar's Ghost Tuesday, Sep 23, 14 @ 10:13 am
That lawyer, Leonard Grunstein…
I’m not, but shouldn’t the lawyer be an expert on law?
Comment by Pete Tuesday, Sep 23, 14 @ 10:21 am
Rauner talking points, (not exact quotes but messages he has used:
“It wasn’t me. It was him. He’s liable.”
[If anything goes seriously wrong with anything we touch.]
“That CEO was at fault, not our firm. We were shocked and disappointed.”
[Even as we brag about how well we vet and recruit CEOs for our companies.]
“I have been successful at everything.”
[If it all goes right, it’s my skills and genius at work.]
“We invested in 100s of companies. We didn’t run them.”
[Rauner personally sitting on the Board of some with real problems — never to be mentioned.]
Rauner clearly knows how to make money from other people’s money. Probably brilliant at that at certain times in his career. He has used smart ways to avoid accountability, then and now.
But for the life of me I am having trouble discovering the skills Rauner has demonstrated that would help in the Governor’s role. I would have to assume his financial skills were deliberately misplaced with his “Blueprint”.
Comment by walker Tuesday, Sep 23, 14 @ 10:40 am
I think Henry should have a blog too. It should be called “Uninformed and You’re Paying for It”.
Comment by Meanderthal Tuesday, Sep 23, 14 @ 10:41 am
Henry seemed to understand when it was time to exit the stage. The snarky encore suggests maybe not. His union led the most embarrassing display at the State Fair with Pat Quinn speaking over the hissing. Now, he’s their guy. Truth is much stranger than fiction.
Comment by A guy... Tuesday, Sep 23, 14 @ 10:42 am
Back when the Metra story broke, I noted that while I believe the public general accepts that politicians make calls to help get folks jobs, Madigan probably distinguished himself by advocating for raises.
Bruce Rauner has certainly distinguished himself here.
Voters accept that “everybody does it” when it comes to the accusation of putting profits before people.
But you will not find even one business person defending what went on here.
To prove my point: call Todd Maisch and keep calling him, until the Illinois Chamber of Commerce tells you whether they think this is an acceptable way to run a business.
Beyond. The. Pale.
Comment by Yellow Dog Democrat Tuesday, Sep 23, 14 @ 10:48 am
An observation
I read the dueling press releases by the campaigns in this post and I can understand and connect with Quinn’s.
I do not have a doctorate in law and have really no idea what the blurbs in Rauner’s fact check are saying-nor do I really want to spend alot of time or effort trying to decipher what they are saying. I just know that people like BR pay lawyers lots of bucks to hide stuff in spun meaningless jibberish like in his press release.
Bruce–get a clue. People want to hear you at their level. They don’t care what your multi-million retainer attorney can splice together in meaningless lawyerspeak.
Rauner needs to get a half way understandable explanation out there before this thing gets some legs. Quinn appears to have a believable and understandable attack. Rauner needs to have a believable and understandable explanation out there pronto.
Comment by train111 Tuesday, Sep 23, 14 @ 10:52 am
GTCR obviously had no control over any of its holdings. They were victims, always — except when it came time to cash the checks.
Where is the Rauner feel-good spot about his successful business history?
You spend your whole life doing something and you don’t have a positive story to tell? Creating jobs, saving companies, etc?
Comment by wordslinger Tuesday, Sep 23, 14 @ 10:52 am
==”…GTCR Believed That Fundamental Long Term Care Holdings (FLTCH) And Fundamental Long Term Care Inc (FLTCI) Were One And The Same.”
Something tells me this “belief” is the only thing standing between GCTR and 1 billion in liabilities. The good news is they still have 10 billion left over.
Comment by Jocko Tuesday, Sep 23, 14 @ 10:54 am
@Team Rauner-
That press release is garbage. It looks as though you printer was in ‘test’ phase and printed out some nonsensical words to ensure the font was correct, and the printer head was aligned.
Please send out the real response that people can read and understand.
Comment by How Ironic Tuesday, Sep 23, 14 @ 11:01 am
Could the Rauner response be any more incomprehensible? Lawyerese, legal terms, acronyms? That’s hitting the bottom of a lot of trash cans. Another great job.
Comment by Archiesmom Tuesday, Sep 23, 14 @ 11:02 am
The charges were previously dismissed by a federal court?
I asked yesterday why Rauner was not deposed or called to testify in this matter. Is he that minor or irrelevant of a figure in all of this? So far, I still can’t come up with an answer to this question.
Comment by Louis G Atsaves Tuesday, Sep 23, 14 @ 11:05 am
@How Ironic
I think the team took one look at a response that was understandable and the one member of Team Rauner who DIDN’T immediately faint ordered the creation of the response that was released
Comment by former southerner Tuesday, Sep 23, 14 @ 11:06 am
whoops, posted on the wrong post earlier…
with respect to Rauner’s involvement or lack thereof, either:
1) he was a Director, but breached his fiduciary duty because he “wasn’t involved”
2) he lied and WAS involved because he was a Director
sorry, but it cuts against him regardless of what version of his story you choose to accept
Comment by the koala Tuesday, Sep 23, 14 @ 11:11 am
Obviously the GTCR lawyers wrote the “fact check”, but it’s still a very bizarre response for a political candidate.
Comment by Chicago Cynic Tuesday, Sep 23, 14 @ 11:11 am
I would choke a little if I said this out loud…but..Quinn is looking better*&%$
Comment by Jasper Tuesday, Sep 23, 14 @ 11:15 am
How is it you can sit on a board of a company and not be responsible for anything the company does?
I, too, why Rauner wasn’t deposed.
Comment by Frenchie Mendoza Tuesday, Sep 23, 14 @ 11:17 am
I hope voters are not going to make the same mistake they made with Ryan, finding out only after the deaths of the Willis kids that his office was responsible. Will we elect Rauner and find out afterwards of his culpability in the nursing home mistreatment and deaths. All the warning signs are there. Fool me once …
Comment by truthteller Tuesday, Sep 23, 14 @ 11:43 am
I just love how the campaign puts “sham” in scare quotes then a sentence later quotes the judge saying yeah this company essentially was a sham corportation. LOL.
Comment by hisgirlfriday Tuesday, Sep 23, 14 @ 11:47 am
Um, “senior” doesn’t equal disabled or demented,
DuPage, although many appear to believe that is the case. Astonishing, given that our likely next President will be, I believe, 69 when she is inaugurated and in her late seventies when she leaves office.
As to Mr. Saacks, we don’t know (and are not entitled to know) the nature of his impairment or if he was impaired at the time he signed the paperwork.
As to Rauner, the financial experts will have to tell us how common these financial maneuvers are in the US financial world. And how many are being prosecuted by the feds or other L/Enf. Not that many, I would guess. Nobody has to vote for Rauner but we should all admit to some hypocrisy with respect to the activities of the US financial system and our collective fondness for letting rich folks off easy with respect to taxes, say, capital gains.
Comment by Cassandra Tuesday, Sep 23, 14 @ 11:49 am
@Louis Atsaves:
Reviewing the memorandum they cited re: dismissal… some of the claims made by Plaintiffs against GTCR were dismissed and other claims were not dismissed by that opinion.
That is why this case is ongoing.
Comment by hisgirlfriday Tuesday, Sep 23, 14 @ 11:55 am
1. Great issue for Quinn because he has no private industry record to compare too, it is the art of being a democrat by definition. Don’t do anything so no one can criticize you.
2. The problem for Quinn on this stuff it is that all of gets vetted by the feds and no one charged Rauner with crimes.
Comment by the Patriot Tuesday, Sep 23, 14 @ 12:09 pm
You can’t clean something without getting something else dirty. Barry Saacks was the discarded paper towel, here.
Comment by Shark Sandwich Tuesday, Sep 23, 14 @ 12:12 pm
“Quinn talking points, (not exact quotes but messages he has used:
“It wasn’t me. It was him. He’s responsible.”
“That [state employee I hired] was at fault, not the governor’s office. We were shocked and disappointed.””
Both of them disgust me.
Comment by Chris Tuesday, Sep 23, 14 @ 12:20 pm
This story is one of the crazier things to emerge in this race.
Was Mr. Saacks essentially a co-conspirator looking for an easy payday who took the cash and ran? Or was this a bunch of wealthy guys exploiting a clueless and vulnerable person?
Troubling business no matter how you slice it.
Comment by Formerly Known As... Tuesday, Sep 23, 14 @ 12:36 pm
Also, this == Saacks was paid cash to sign closing documents == is a red flag, unless there is some misunderstanding.
How often do you buy == computers ==, or stock in a company, and they pay you cash for making the purchase? Very strange.
Comment by Formerly Known As... Tuesday, Sep 23, 14 @ 12:41 pm
this story will play great on tv. abusing the elderly is not popular.
Comment by Amalia Tuesday, Sep 23, 14 @ 12:42 pm
I get the feeling Mr. Saacks wasn’t expected to be capable or even around to tell his side.
Comment by B4L Tuesday, Sep 23, 14 @ 12:52 pm
“How often do you buy == computers ==, or stock in a company, and they pay you cash for making the purchase? Very strange.”
Shouldn’t he have been handing over a check, not receiving cash?
Comment by Say It Ain't So!! Tuesday, Sep 23, 14 @ 12:58 pm
Once again, Bruce Rauner is either ignorant or dishonest.
Or both.
– MrJM
Comment by MrJM Tuesday, Sep 23, 14 @ 1:02 pm
If Mike Schrimpf can get through this one they should double his salary.
Comment by Jocko Tuesday, Sep 23, 14 @ 1:09 pm
Rauner’s response sounds like the plot of a John Grisham novel. The real question is who set up the sham company and how many layers are between that company and GCTR. What people don’t understand is that persons like Rauner set up corporations to avoid legal liability and a judge is limited in bankruptcy to the level he can “pierce the corporate veil”. Business Law 101
Comment by A Jack Tuesday, Sep 23, 14 @ 1:12 pm
This is a scam that even Angel Martin would be proud of. Wonder if Jim Rockford had any hand in it?
Comment by Big Joe Tuesday, Sep 23, 14 @ 1:17 pm
The words “plausible deniability” keep coming to mind when I read this story.
Comment by Anonymous Tuesday, Sep 23, 14 @ 2:25 pm
== Shouldn’t he have been handing over a check, not receiving cash? ==
Right? When I “buy” something, computers or stocks, I typically pay them for it.
Not the other way around.
Comment by Formerly Known As... Tuesday, Sep 23, 14 @ 2:34 pm
@Chris: Good, fair comment.
Comment by walker Tuesday, Sep 23, 14 @ 2:45 pm
–Saacks said as far as he knew the deal for him to buy computers never went through. He said he never received any computers and he’s never seen any money from the business.–
FKA, the old man says he doesn’t know what’s going on.
–However, Brett Baker, a lawyer for the firm that handled the stock sale to Saacks, has testified in a deposition that Saacks was paid cash to sign closing documents, something Baker said he raised concerns about at the time with his superiors because it was so unusual.–
Next question: who were his superiors? And why were they paying Saack’s cash to “buy” a company?
Read the Rauner crew response and tell me the clear answer to those questions.
This thing stinks on ice.
Comment by wordslinger Tuesday, Sep 23, 14 @ 2:47 pm
To the Rauner update,
So did Bruce Rauner ever work with, know of, hire…
Mr Saacks?
I don’t even know if Mr. Saacks knows, as to insulate(?)
Insulate who? I have no clue.
Smelly business here.
Comment by Oswego Willy Tuesday, Sep 23, 14 @ 3:12 pm
There was a lawyer, Kobayashi …
Comment by The Captain Tuesday, Sep 23, 14 @ 3:15 pm
Wordslinger:
Congrats on your accolades.
In response to your inquiry and on behalf of the chair:
There will be no business leader ads.
As I noted, Rauner pivoted to “community leader” the day after the primary.
Rauner should not be running ANY positive spots until three days before the election.
The suburban women ads? Defending = Losing.
If this election is about who voters can trust on social issues, Rauner is done. Because no one trusts him.
Comment by Yellow Dog Democrat Tuesday, Sep 23, 14 @ 3:37 pm
- But neither Jannotta, Holdings, nor the GTCR Entities had any interaction with Saacks, much less knowledge that Saacks owned FLTCI. -
Anyone else reminded of Joe Pesci in JFK?
It’s a mystery, it’s a mystery wrapped in a riddle inside of an enigma!
NSFW
http://www.youtube.com/watch?v=3ema7lfEAMk
Comment by Anonymous Tuesday, Sep 23, 14 @ 4:40 pm
== the old man says he doesn’t know what’s going on ==
wordslinger, that is the confusing part to me. You have a man who says he never received any computers or saw any money.
But you also have a lawyer who has sworn during deposition that not only was the old man paid cash upon his “purchase”, but the lawyer alerted his supervisors something seemed fishy.
Wouldn’t it seem odd to purchase some computers or stock, and have them promptly hand you a pile of cash instead of billing you for your purchase? That wouldn’t seem odd?
Comment by Formerly Known As... Tuesday, Sep 23, 14 @ 5:13 pm
Something definitely does not add up here.
Comment by Formerly Known As... Tuesday, Sep 23, 14 @ 5:14 pm
–Wouldn’t it seem odd to purchase some computers or stock, and have them promptly hand you a pile of cash instead of billing you for your purchase? That wouldn’t seem odd?–
I’m not being clear. I suspect the old man was not mentally capable of knowing what was going on, and that’s the reason he was selected for the task.
I think we’ll find out more.
Comment by wordslinger Tuesday, Sep 23, 14 @ 5:20 pm
FKA
Maybe Barry was answering a Craigslist ad for a “computer (restored back to) stock”
Comment by Jocko Tuesday, Sep 23, 14 @ 5:24 pm
== not mentally capable ==
Thanks, wordslinger. It seems there are only two possible explanations. Either he was “in” on it and is playing dumb, or he was exploited and essentially left to rot in a sickening and unseemly manner.
This sounds like something that can be easily supported with some medical evidence, and should be cleared up soon.
Either that, or option 3 as Jocko points out lol.
Comment by Formerly Known As... Tuesday, Sep 23, 14 @ 5:38 pm
@Cassandra11:49=”senior” doesn’t equal disabled or demented=
Not all seniors are disabled or demented, but a large percentage of disabled and/or demented are seniors. My understanding is the crimes against seniors laws don’t require that the victim be disabled or demented, only they be over a certain age.
Someone who knows that law, please confirm that, or correct me if I misunderstand that law.
Thank you.
Comment by DuPage Tuesday, Sep 23, 14 @ 8:13 pm
“How is it you can sit on a board of a company and not be responsible for anything the company does?” Ask ex-Governor Jim Thompson.
Comment by Tom Joad Wednesday, Sep 24, 14 @ 9:06 am
The only ones being conned or cheated are the citizens of Illinois. These are the 2 worst candidates running for governor in the history of the state. And that’s including the 4 that went to jail.
Comment by Booster Wednesday, Sep 24, 14 @ 12:20 pm