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Company tries to stop enforcement of law

LTC Liability Monitor, March 16, 2005

Formation Capital LLC, the company in line to take over Beverly Enterprises, has filed suit in federal court to stop the enforcement of a nursing home bill currently before the Arkansas legislature, the Associated Press reported. The suit seeks to prevent Kurt Knickrehm, director of the Arkansas Department of Human Services, from implementing the Long-Term Care Resident Protection Act of 2005.

The bill, which is yet to be approved by the general assembly, would require an organization that wishes to take over a publicly traded nursing home company with more than 2,000 employees and more than $1 billion in assets to prove the takeover would not negatively affect the nursing home residents. Beverly Enterprises is the only nursing-home company in Arkansas to meet those employee and asset specifications. The Formation Capital suit alleges the bill is intended to protect Beverly's board of directors, not the nursing home residents, and that it violates the U.S. Constitution by inhibiting interstate commerce, AP reported.

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