* Tribune…
A federal bankruptcy judge said Tuesday afternoon that Gov.-elect Bruce Rauner’s former investment firm won’t be held responsible for a fraudulent scheme to avoid liability in costly nursing home death lawsuits. […]
The judge found that those partners, headed by New York businessmen Murray Forman and Leonard Grunstein, were responsible for a ruse to hide the assets after the 2006 purchase of nursing home assets from the GTCR-controlled company. […]
[Judge Michael G. Williamson] called GTCR’s investment in the nursing home business “a financial disaster” triggered by misstated earnings that made the business vulnerable to its creditors and landlords starting in 2002. […]
Williamson said he believed [GTCR’s front man in the nursing home business, former principal Edgar D. Jannotta’s] contention that was “duped” by Forman and Grunstein, and said Jannotta had no way of understanding the circumstances around the New York investors’ move to place the liability-ridden subsidiary of the company under the ownership of an elderly graphic artist who had no knowledge of the company.
Wow.
- Roadiepig - Tuesday, Dec 16, 14 @ 3:11 pm:
I guess the judge bought his Sargent Schultz excuse?
- so... - Tuesday, Dec 16, 14 @ 3:18 pm:
Looking forward to Doug Ibendahl’s write up admitting he was wrong. Should be any minute now…
- Sir Reel - Tuesday, Dec 16, 14 @ 3:18 pm:
This means Illinois will have to get used to a “dupe” as Governor versus the more traditional “crook.” Variety is the spice of life.
- Oneman - Tuesday, Dec 16, 14 @ 3:18 pm:
Better than being found to have committed fraud I guess…
- Happy Gun Owner - Tuesday, Dec 16, 14 @ 3:26 pm:
I can’t wait to see Brooke Anderson’s response to this one…
- anon - Tuesday, Dec 16, 14 @ 3:29 pm:
money and influence always talk and they’re still talking.
- Team Sleep - Tuesday, Dec 16, 14 @ 3:35 pm:
The court of public opinion has not 6 jurors nor 12. It has thousands and cares not for due process or a defendant’s rights.
- Walter Mitty - Tuesday, Dec 16, 14 @ 3:35 pm:
Vindication… Hopefully a good omen for all of us…
- A guy... - Tuesday, Dec 16, 14 @ 3:37 pm:
“Duped” is a good expression to describe what happens when anyone takes at face value what Ibendahl writes.
- Ducky LaMoore - Tuesday, Dec 16, 14 @ 3:37 pm:
The Max Bialystock of venture capitalism scores with another flop!
- Anonymoiis - Tuesday, Dec 16, 14 @ 3:40 pm:
Somewhere out there Doug Ibendahl’s head may have just exploded
- allknowingmasterofracoondom - Tuesday, Dec 16, 14 @ 3:41 pm:
I think the truth is that Bruce killed old ladies. That’s what I am going with.
- Oneman - Tuesday, Dec 16, 14 @ 3:59 pm:
== I can’t wait to see Brooke Anderson’s response to this one… ==
Bet it would start Billionaire Bruce Rauner…
- Anon. - Tuesday, Dec 16, 14 @ 4:04 pm:
And they made Janotta take those big bonuses, too, just so he could be sure they were telling the truth about how well the business was doing. They wouldn’t have paid him that money if they didn’t really have it, would they?
- too obvious - Tuesday, Dec 16, 14 @ 4:07 pm:
So he lucks out on this one piece regarding attempts to escape liability by one player. Doesn’t change the fact that residents died and huge jury awards already rendered against related entities.
- Wordslinger - Tuesday, Dec 16, 14 @ 4:15 pm:
Who knew that being a dupe that has no way of understanding anything paid so well?
- Norseman - Tuesday, Dec 16, 14 @ 4:16 pm:
The gov-elect is having a real problem with being duped. The nursing home business, Quinn’s growing budget tricks and agencies low-balling budgets (whatever that means). Madigan and Cullerton are going to have a fun time if the gov-elect doesn’t wise up.
- anon - Tuesday, Dec 16, 14 @ 4:24 pm:
Casey anthony had a good lawyer too. Sad day for the nursing home patients and their families.
- so... - Tuesday, Dec 16, 14 @ 4:35 pm:
==So he lucks out on this one piece regarding attempts to escape liability by one player. Doesn’t change the fact that residents died and huge jury awards already rendered against related entities.==
C’mon Doug, you can do better than that.
- Amalia - Tuesday, Dec 16, 14 @ 4:41 pm:
duped. still not great.
- D.P.Gumby - Tuesday, Dec 16, 14 @ 4:41 pm:
So is this also the reason why Brucie suddenly discovered the state’s financial condition is so much worse that he thought? He was “duped”? And he was “brainwashed” in Vietnam, too?
- olddog - Tuesday, Dec 16, 14 @ 5:01 pm:
=== I can’t wait to see Brooke Anderson’s response to this one… ===
Who?
We had our chance to listen to her. We didn’t take it. The election is over, and we’re stuck with a dupe.
- Lunchbox - Tuesday, Dec 16, 14 @ 5:03 pm:
Good to hear. Cue memories of “Wolf of Winnetka.”
- Nearly Normal - Tuesday, Dec 16, 14 @ 5:03 pm:
So the GCTR folks were duped. Does not bode well for a company that brags about their ability to pick top people and put them in charge of their invested businesses. Lack of due diligence on their part or seriously gullible?
- Anonymoiis - Tuesday, Dec 16, 14 @ 5:06 pm:
Hilarious that some of you are so blinded that in your minds a story stating that Rauner was not responsible or liable is somehow bad for Rauner
- walker - Tuesday, Dec 16, 14 @ 5:09 pm:
Paid the big bucks.
Didn’t think to talk to, or meet, or even “google” the new owner-of-record? Just in case the liability cover was flimsy? Not even curious?
Thinking simultaneously of protecting your bonus, while dumping your bad business, can cloud the mind.
Oh well, maybe hindsight is unfair.
- walker - Tuesday, Dec 16, 14 @ 5:17 pm:
To be fair, Rauner was not the partner closest to this “duping.”
Perhaps the worst one can say is that he was over-trusting, and under-involved.
- Wordslinger - Tuesday, Dec 16, 14 @ 5:22 pm:
Walker, it’s also good to have buffers. Let the other guys take the fall for the dirty work.
- Formerly Known As... - Tuesday, Dec 16, 14 @ 5:33 pm:
Wow is right. Many apologies owed by many here, including myself.
Lo siento, Gov-elect Rauner.
- sal-says - Tuesday, Dec 16, 14 @ 5:53 pm:
Any chance the judge was ‘duped’? Nah; Never !
A “a financial disaster” doesn’t actually eliminate culpability. GTCR was staffed by pros in financial matters.
- Anonymous - Tuesday, Dec 16, 14 @ 6:01 pm:
Nice to know we have elected a dupe.
- Wordslinger - Tuesday, Dec 16, 14 @ 6:46 pm:
I can’t copy and paste here, but if you google the Bloomberg story, there’s more information.
Today’s ruling just addressed who was responsible for the scheme to lay off liability on the old man.Thats where Janotta was supposedly duped.
It has nothing to do with the wrongful death judgements that have already been entered. Those occurred when GTCRs Transhealthcare owned and operated the homes.
That bad stuff still happened, when Transhealthcare was raking in Medicaid and Medicare money.
Its a pretty simple and common private equity formula: Buy up majority control, skim all the cash in the form of dividends and management fees, sell assets, run up debt, put no money back into the operation and when the music stops, go into bankruptcy and let creditors pick over any meat you might have left on the bones.
Investors can make a lot of money intentionally running a business into the ground. Private equity just adopted the Mafia bustout business model.
The creditors, in this case, are just trying to find if there was anything left after the bustout. There must be a little something, that’s why they tried to hang the liability on the old man,
But that was greedy, or greedier. I doubt highly enough assets were left after the bustout to pay pennies on the dollar for the judgements.
- Loop Lady - Tuesday, Dec 16, 14 @ 7:04 pm:
This is so special…whatever happened to personal responsibility said the progressive Dem…?
- RNUG - Tuesday, Dec 16, 14 @ 7:16 pm:
Guess this means Rauner truly DOES understand how Illinois politics operates!
Here, in the past, it’s always been a Director or assistant who ended up falling on their sword for failing to keep the Governor informed …
- Chicago Cynic - Tuesday, Dec 16, 14 @ 7:19 pm:
Simply amazing result. Just how unsophisticated does that judge think one of the most sophisticated investors in the country is? Wow.
- GOPgal - Tuesday, Dec 16, 14 @ 8:01 pm:
I suspect most don’t really understand what this particular case was about. This particular one was just about whether or not GTCR aided and abetted a fraud in the transfer of remaining nursing home business assets. People had already died and other courts had already awarded enormous verdicts. Court here merely let GTCR off the hook in the way it got out with its profits. Still doesn’t make Rauner a good person.
- Anonymous - Tuesday, Dec 16, 14 @ 8:02 pm:
Just how unsophisticated does that judge think one of the most sophisticated investors in the country is?
Judgement handed down with a wink, wink…..
- ANON - Tuesday, Dec 16, 14 @ 8:26 pm:
I hear Casey Anthony’s attorney represented GTCR
- Precinct Captain - Tuesday, Dec 16, 14 @ 10:20 pm:
The voters got duped just like GTCR
- VanillaMan - Tuesday, Dec 16, 14 @ 10:22 pm:
So, the new governor - to - be can be duped. He’s human and fallible.
Government types who hope for a Messiah, are disappointed!
- x ace - Wednesday, Dec 17, 14 @ 2:33 am:
Wordslinger nailed it: ” Mafia bustout business model “.
- Carl Nyberg - Wednesday, Dec 17, 14 @ 10:14 am:
It’s hard to reconcile the idea that the company made money by being shrewd (as opposed to unethical) on other deals if they were “duped” on this deal.
Of course, there’s a possibility the judge was either corrupt or a fool too.