Judge in Nursing Home Bankruptcy Says She Has ‘Grave Concerns’

(Bloomberg) -- The ill CEO of bankrupt nursing home chain QHC Facilities LLC is recovering, but the judge overseeing the proceedings said she still has “grave concerns” about the case, foremost making sure patients are protected. 

“There was chaos before this case was even filed and it’s continued now post-petition,” U.S. Bankruptcy Judge Anita Shodeen said during a Thursday hearing. 

The U.S. Trustee moved to appoint a Chapter 11 trustee this week after Chief Executive Officer Nancy Voyna was hospitalized “with extremely serious health conditions,” according to a Tuesday court filing. 

QHC filed for bankruptcy Dec. 29 with a plan to seek a buyer, citing “crippling staffing and employee retention issues” and the death of Voyna’s husband and co-founder in June as factors. 

Jeffrey Goetz, a lawyer for the company, said a courtesy call to the U.S. Trustee about the situation on Sunday led to “assertions that the sky was falling, the ship was rudderless” and the company needed immediate help. 

The filing has “real-life implications” that could potentially chill the sale process, Goetz said. “The hysteria that the U.S. Trustee has raised may become completely moot in a matter of days,” he said. 

Goetz said Voyna is coming off a ventilator and may be out of the hospital next week, leading the judge to schedule a hearing about whether to appoint a Chapter 11 trustee for later in the month, on Jan. 26. 

Shodeen asked L. Ashley Wieck, an attorney at the office of the U.S. Trustee, if the effort to appoint a Chapter 11 Trustee would be moot if Voyna returned to her job. 

“That’s a difficult question to answer,” Wieck said. “I think we would still have concerns, but moving to a trustee is extraordinary relief.”

The case is QHC Facilities, LLC, 21-01643, U.S. Bankruptcy Court for the Southern District of Iowa (Des Moines).

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