The Insolvent Life Care Provider: Who Leads the Dance between the Federal Bankruptcy Code and State Continuing-Care Statutes

Authors

Nathalie Martin, University of New Mexico - School of LawFollow

Document Type

Article

Publication Date

1-1-2000

Abstract

Continuing-care retirement communities provide seniors with an attractive option to traditionaln ursing homes. These arrangementsa llow seniors to live in a pleasant, independent environment for as long as possible, and then receive life time nursing care when it is needed. Residents of these communities pay a large upfront entry fee in exchange for the promise of life time nursing care. When continuing care facilities file for bankruptcy, however, residents risk losing their large upfront entry fee, which drastically reduces the value of these arrangements to consumers. In this Article, Professor Nathalie Martin analyses these risks against a host of state statutes purporting to regulate this industry. She concludes that despite many laws on the books, this industry remains largely unregulated, and residentfees are still at great risk of loss in most states. In the Article, Professor Martin analyses the relationship between state statutes and the Federal Bankruptcy Code, and discusses the Supremacy battle that results when state and federal statutes conflict. She analyses the specific provisions of the various state continuing-care statutes and suggests ways that the state statutes could be improved. She then concludes that because the Bankruptcy Code preempts some of the provisions of these state statutes, and because the state legislative process is inefficient and unpredictable, to fully protect residents form the loss of their life care investments, the Bankruptcy Code should also be amended to preclude rejection of life care contracts, to provide rejection damage claims with higher priority, or to otherwise protect resident claims.

Publication Title

Ohio State Law Journal

Volume

61

First Page

267

Last Page

346

Recommended Citation

Nathalie Martin, The Insolvent Life Care Provider: Who Leads the Dance between the Federal Bankruptcy Code and State Continuing-Care Statutes, 61 Ohio State Law Journal 267 (2000).
Available at: https://digitalrepository.unm.edu/law_facultyscholarship/680