Courts and Corporate Bankruptcy

A U.S. bankruptcy judge in Dallas has refused to approve Genesis HealthCare’s proposed asset sale with legal releases that would have shielded its controlling investor, Joel Landau, and associate David Gefner from liability in nearly 1,000 patient injury and death cases, including tens of millions in unpaid settlements. Judge Stacey G.C. Jernigan’s stance preserves families’ ability to pursue claims as Genesis, once the nation’s largest nursing home chain with 165 facilities, works through Chapter 11 while listing more than $1.6 billion in unsecured debts and offering just $155 million in sale proceeds for those creditors under a bid from a new Landau‑controlled company. Plaintiffs and their lawyers say the ruling is a major win after KFF Health News revealed Genesis had delayed paying at least 155 settlements and still owed $41 million of $58 million promised to residents’ families at the time of its July filing.