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* 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.
posted by Rich Miller
Tuesday, Dec 16, 14 @ 3:07 pm
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I guess the judge bought his Sargent Schultz excuse?
Comment by Roadiepig Tuesday, Dec 16, 14 @ 3:11 pm
Looking forward to Doug Ibendahl’s write up admitting he was wrong. Should be any minute now…
Comment by so... 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.
Comment by Sir Reel Tuesday, Dec 16, 14 @ 3:18 pm
Better than being found to have committed fraud I guess…
Comment by Oneman Tuesday, Dec 16, 14 @ 3:18 pm
I can’t wait to see Brooke Anderson’s response to this one…
Comment by Happy Gun Owner Tuesday, Dec 16, 14 @ 3:26 pm
money and influence always talk and they’re still talking.
Comment by anon Tuesday, Dec 16, 14 @ 3:29 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.
Comment by Team Sleep Tuesday, Dec 16, 14 @ 3:35 pm
Vindication… Hopefully a good omen for all of us…
Comment by Walter Mitty Tuesday, Dec 16, 14 @ 3:35 pm
“Duped” is a good expression to describe what happens when anyone takes at face value what Ibendahl writes.
Comment by A guy... Tuesday, Dec 16, 14 @ 3:37 pm
The Max Bialystock of venture capitalism scores with another flop!
Comment by Ducky LaMoore Tuesday, Dec 16, 14 @ 3:37 pm
Somewhere out there Doug Ibendahl’s head may have just exploded
Comment by Anonymoiis Tuesday, Dec 16, 14 @ 3:40 pm
I think the truth is that Bruce killed old ladies. That’s what I am going with.
Comment by allknowingmasterofracoondom Tuesday, Dec 16, 14 @ 3:41 pm
== I can’t wait to see Brooke Anderson’s response to this one… ==
Bet it would start Billionaire Bruce Rauner…
Comment by Oneman Tuesday, Dec 16, 14 @ 3:59 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?
Comment by Anon. Tuesday, Dec 16, 14 @ 4:04 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.
Comment by too obvious Tuesday, Dec 16, 14 @ 4:07 pm
Who knew that being a dupe that has no way of understanding anything paid so well?
Comment by Wordslinger Tuesday, Dec 16, 14 @ 4:15 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.
Comment by Norseman Tuesday, Dec 16, 14 @ 4:16 pm
Casey anthony had a good lawyer too. Sad day for the nursing home patients and their families.
Comment by anon Tuesday, Dec 16, 14 @ 4:24 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.
Comment by so... Tuesday, Dec 16, 14 @ 4:35 pm
duped. still not great.
Comment by Amalia 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?
Comment by D.P.Gumby Tuesday, Dec 16, 14 @ 4:41 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.
Comment by olddog Tuesday, Dec 16, 14 @ 5:01 pm
Good to hear. Cue memories of “Wolf of Winnetka.”
Comment by Lunchbox 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?
Comment by Nearly Normal Tuesday, Dec 16, 14 @ 5:03 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
Comment by Anonymoiis Tuesday, Dec 16, 14 @ 5:06 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.
Comment by walker Tuesday, Dec 16, 14 @ 5:09 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.
Comment by walker Tuesday, Dec 16, 14 @ 5:17 pm
Walker, it’s also good to have buffers. Let the other guys take the fall for the dirty work.
Comment by Wordslinger Tuesday, Dec 16, 14 @ 5:22 pm
Wow is right. Many apologies owed by many here, including myself.
Lo siento, Gov-elect Rauner.
Comment by Formerly Known As... Tuesday, Dec 16, 14 @ 5:33 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.
Comment by sal-says Tuesday, Dec 16, 14 @ 5:53 pm
Nice to know we have elected a dupe.
Comment by Anonymous Tuesday, Dec 16, 14 @ 6:01 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.
Comment by Wordslinger Tuesday, Dec 16, 14 @ 6:46 pm
This is so special…whatever happened to personal responsibility said the progressive Dem…?
Comment by Loop Lady Tuesday, Dec 16, 14 @ 7:04 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 …
Comment by RNUG Tuesday, Dec 16, 14 @ 7:16 pm
Simply amazing result. Just how unsophisticated does that judge think one of the most sophisticated investors in the country is? Wow.
Comment by Chicago Cynic Tuesday, Dec 16, 14 @ 7:19 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.
Comment by GOPgal Tuesday, Dec 16, 14 @ 8:01 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…..
Comment by Anonymous Tuesday, Dec 16, 14 @ 8:02 pm
I hear Casey Anthony’s attorney represented GTCR
Comment by ANON Tuesday, Dec 16, 14 @ 8:26 pm
The voters got duped just like GTCR
Comment by Precinct Captain Tuesday, Dec 16, 14 @ 10:20 pm
So, the new governor - to - be can be duped. He’s human and fallible.
Government types who hope for a Messiah, are disappointed!
Comment by VanillaMan Tuesday, Dec 16, 14 @ 10:22 pm
Wordslinger nailed it: ” Mafia bustout business model “.
Comment by x ace Wednesday, Dec 17, 14 @ 2:33 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.
Comment by Carl Nyberg Wednesday, Dec 17, 14 @ 10:14 am