Office of the Attorney General News Release Archive

Friday, July 26, 2002


Innovative proposal will help ensure resident care despite operator's bankruptcy

AUSTIN - Texas Attorney General John Cornyn today announced that the U.S. Bankruptcy Court in Dallas approved his request for an ombudsman to monitor resident and patient care following the collapse of a major nursing home operator. Indiana-based Senior Living Properties, with 51 facilities in Texas, filed for Chapter 11 Bankruptcy protection in May 2002. Today's action marks the first time in State history that an ombudsman has been appointed in this capacity.

"I'm certainly pleased the court has recognized that the affected nursing home residents deserve an advocate who will look after their interests as Senior Living Properties goes through bankruptcy proceedings," Attorney General Cornyn said. "The bankruptcy process was primarily designed to deal with the rights of creditors. But it's just as important that the rights of these residents be heard... and an ombudsman will ensure they have a voice."

Today's court action follows a series of negotiations between the attorney general's office and company officials who, just this week, consented to the ombudsman's appointment. A representative from the Texas Department of Aging will act as the ombudsman and be authorized to identify, investigate, and resolve any complaints by or on behalf of residents living in facilities owned by Senior Living Properties. The company will also keep the ombudsman informed on any actions involving the closure or sale of facilities it owns. Senior Living will reimburse the State for any expenses incurred by the ombudsman.

Officials from the Texas Department of Aging and the federal Medicare program supported Cornyn's proposal for a specially-designated advocate. The attorney general's request mirrors pending congressional legislation that would require the appointment of an ombudsman anytime a nursing home operator files for bankruptcy.

Since taking office in 1999, Cornyn has worked aggressively to protect the rights of senior Texans through consumer protection efforts, crime prevention initiatives, and imposing civil penalties on nursing home and assisted living facilities that fail to safeguard the health and safety of their residents.

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