Courts throughout the nation recognize that "the era of the locally owned, ‘mom and pop’ nursing facility is gone. Increasingly, private investment groups own large chains of nursing homes. With the end of the locally owned nursing home, it has become common for nursing facilities to have complex ownership and management structures," as the court held in Schwartzberg v. Knobloch, 98 So. 3d 173, 180 (Fla. Dist. Ct. App. 2012). Large, often publicly traded nursing home chains have gone through similar reorganizations, creating a plethora of facility-specific entities that are now often owned by investment groups or private equity firms.
Organizational segmentation can assume complex forms, but typically one entity is formed to own real property (often as a real estate investment trust that leases the property to other entities), one holds the license and operates the facility (possibly as a not-for-profit), another provides direct care consulting services, and another manages the finances and back-office administrative functions of the facility. (See "Corporate Structure: Maximizing the Protection of the Corporate Veil, Long-Term Care and the Law," by Andrew R. McCumber.) This segmentation limits tort liability and recoveries, as the entities that own assets are separated from the operation of the facilities. (See Sara Hoffman Jurand’s "Lack of Insurance Hinders Recovery in Nursing Home Cases.")
