Fundamental Long Term Care Holdings: Company Overview
Fundamental Long Term Care Holdings, LLC (FLTCH) is a private, independent company in Sparks Glencoe, MD, which is owned by Leonard Grunstein and Murray Forman. It has been involved in three lawsuits in the last four years alleging that several of its subsidiary companies—Trans Healthcare, Inc., Trans Health Management, Inc., and Magnolia Manor—were neglectful in the care of their patients, leading to injury and even death. In the first of those cases, the family of the victim was denied collecting the court-awarded judgment of $110 million by what appears to be an intentional deception which resulted in the false implication of two innocent parties.
A NOTE REGARDING OUR SOURCES
It is Wonder's standard practice to use only sources dated within the last 24 months in order to ensure that we are providing the most current information available. However, in this case, the court documents and commentaries necessary to answer the questions posed go back to 2014. It is, therefore, necessary that we use these older materials to fully address the request. In addition, since many of the documents involved are official court rulings, and it is outside of Wonder's scope to offer legal interpretations, we will use longer-than-usual direct quotes to ensure that we do not miscommunicate the courts' words or intentions.
OWNERSHIP STRUCTURE AND PRINCIPLES
It has been alleged that the owner of Fundamental Long Term Care Holdings, LLC (FLTCH, henceforth) is one Rubin Schron, who according to court documents is "a wealthy real estate investor from New York." However, it was determined in the discovery process of a major lawsuit (described below) that, in fact, the true owners of FLTCH and its subsidiary companies as of 2016 are Schron's (possibly former) lawyer, Leonard Grunstein, and his investment banker, Murray Forman. Grunstein is also the owner of Fundamental Long Term Care, Inc. ("Fundamental Inc.," henceforth), a shell company apparently established for the sole purpose of preventing collection of a lawsuit, as we will explain below.
The current CEO for Fundamental is Rowena Davidson. We were unable to find a LinkedIn profile for her, though we did find a profile for Thomas Gray, FLTCH's Dietary Manager. The only other current employees we found on LinkedIn were staff (e.g., nurses), and FLTCH's homepage does not have any information about current employees or officers, so we are unable to provide further information about the company's governance. FLTCH is a private, independent company, and so does not produce a public annual report from which we could learn more.
BUSINESS ENTITIES OWNED BY FLTCH
As noted in the above court documents, FLTCH owns both Trans Healthcare, Inc. (aka "THI") of Baltimore and Trans Health Management, Inc. (aka "THMI"). However, there's some complication in the question of who owns what. As described by one court observer:
"Fundamental Long Term Care Holdings LLC, based in Sparks, Maryland, acquired all the stock of two Trans Health entities, THI of Baltimore and THI of Nevada, the judge ruled in May. In a second sale, THI sold all of its stock in THMI to Fundamental Long Term Care Inc. While the names are similar, the assets and owners were different." Actually, as we will show below, Grunstein is the true owner of both, though he attempted to obscure this. The summary continues, "Fundamental Long Term Care Holdings LLC, referred to as FLTCH in court papers, kept the unencumbered assets, including real estate and more than 100 nursing homes nationwide, while Fundamental Long Term Care Inc. was saddled with the liabilities, the plaintiffs claim."
We were unable to find any current separate business listings for Fundamental Inc., though we found several for FLTCH. According to the lawsuits above, the owner of Fundamental Inc. is allegedly graphic artist Barry Saacks. However, an October 2017 ruling states that, "Plaintiffs alleged that Grunstein deceived Saacks by placing FLTCI in Saacks's name without his knowing involvement. In fact, it was later shown that Saacks had put forward no money to effectuate the transaction. He was an owner in name only."
In other words, it is the judgment of the court that Grunstein is the true owner of both FLTCH and Fundamental Inc., the latter of which was set up as a shell company only. The background behind this case is described below.
LITIGATION AND OUTCOMES
FLTCH and its owners (and alleged owners) have been involved in several lawsuits over alleged negligence in patient care. The most prominent case is "IN RE: FUNDAMENTAL LONG TERM CARE, INC., Debtor. Estate of Juanita Jackson, et al., Plaintiffs, v. General Electric Capital Corporation, et al., Defendants." The long and short of it is that the family of one Juanita Jackson sued THI and THMI, alleging that neglect in nursing homes operated by those two entities had directly led to her death. They were awarded a $55 million verdict against each company ($110 million total). However, that did not end the case: "Collection was thwarted through a complex transaction that sent Trans Healthcare’s liabilities to a shell company called Fundamental Long Term Care Inc., which had no assets, while creating a solvent nursing home chain that was protected from judgments, lawyers contend."
The court ultimately found on March 15, 2015 that Edgar Jannotta, the director of THI, did not sell THMI for less than its true value for the purposes of divesting it of its assets due to the then-pending lawsuit. Jannotta himself appears to have been deceived and the courts regard him as having acted in good faith.
A similar case, "Morrow v. Fundamental Long-Term Care," alleges neglect and mistreatment of a different patient, Lawrence Morrow. That case was derailed somewhat on procedural issues which were ultimately settled in favor of the plaintiff in July 2015. We have not been able to locate any follow-up to that appeal and hypothesize that the case may still be pending or may have been quietly settled out of court.
In a third case, filed in April 2016, the family of Dorothy Faye Ertzberger claims that "the staff at Magnolia Manor," which is owned by FLTCH, "was not properly trained, and that they did not administer necessary medical treatment to the late Mrs. Ertzberger," resulting in unnecessary pain and suffering, and ultimately her death. We are unable to locate the court filing or any judgment and as in the previous case, hypothesize that the case is still pending or else has been quietly settled.
LITIGATION OVER OWNERSHIP
The lawsuits against FLTCH reveal that its ownership has been confused—and that this was the express design of its true owners, Grunstein and Forman. According to a background summary contained in the May 6, 2016 ruling on Case No. 8:11-bk-22258-MGW. Adv. No. 8:13-ap-00893-MGW (quoted at length and verbatim to avoid misconstruing the court's findings):
"In 2002, Schron's lawyer (Leonard Grunstein) and investment banker (Murray Forman) convinced Schron to fund the acquisition of 120 nursing homes from Integrated Health Services ("IHS"), [569 B.R. 907] which was in chapter 11 bankruptcy in Delaware. Abe Briarwood, the entity that actually acquired the IHS homes, leased them to THI of Baltimore, Inc. In March 2006, Forman and Grunstein devised a scheme that allowed them to acquire the former IHS homes from THI Baltimore, as well as the assets of THMI [Trans Health Management, Inc.], a nursing home management company that managed the THI Baltimore homes, without acquiring THMI's liabilities. There is no evidence Schron had any involvement in the March 2006 transaction that allowed Forman and Grunstein to divest THMI of its assets."
"The Probate Estates claim the March 2006 transaction was an elaborate "bust-out" scheme intended to thwart their efforts to collect on personal injury claims they had filed against THMI. At the time of the March 2006 transaction, three of the Probate Estates had sued THMI and its former corporate parent, Trans Healthcare, Inc. ("THI"), for injuries that allegedly occurred at nursing homes THI owned and THMI managed. According to the Probate Estates, the March 2006 transactions resulted in hundreds of millions of dollars of THMI's assets being transferred in exchange for $100,000. As a result of the transaction, THMI was left a liability-ridden shell with no assets to satisfy the Probate Estates' claims."
"After three of the Probate Estates obtained $1.2 billion in default judgments against THI and THMI, they initiated proceedings supplementary against Schron in state court to collect those judgments because THMI no longer had any assets and Schron was a 'deep pocket.'"
The above judgment goes on to describe the case against Schron as, "to say the least, flimsy," and uses the court's "authority under the Anti-Injunction Act's 'relitigation' and 'in aid of jurisdiction exceptions' to enjoin the Probate Estates from relitigating claims" against Schron "that were or could have litigated here."
Schron was further vindicated in an appeals ruling issued on October 19, 2017. We were unable to determine what action, if any, the courts have taken against Grunstein and Forman. This appears to still be pending due to the courts needing to deal with the Schron issue first.
The history of Fundamental Long Term Care Holdings, LLC is a somewhat sordid affair with multiple recent lawsuits against its subsidiary companies. The merits of the more recent cases are unknown, but the Juanita Jackson case exposed possible fraud and deliberate confusion to prevent the family of Mrs. Jackson from collecting $110 million in damages from two of FLTCH's subsidiaries, Trans Healthcare, Inc. (aka "THI") of Baltimore and Trans Health Management, Inc. (aka "THMI"). Despite repeated attempts to sue Rubin Schron, the courts have made it clear that Leonard Grunstein and Murray Forman are the owners of Fundamental Long Term Care Holdings, LLC, as well as the shell company Fundamental Long Term Care, Inc.