The SunHerald reported:
The fifth anniversary of Hurricane Katrina is a time for remembering those whose lives were lost in that most brutal storm, for appreciating what was accomplished since 2005.
Weeks before Hurricane Katrina made landfall, The Carlyle Group purchased LifeCare Hospitals, a long term acute care hospital provider. Consider the history.
August 11, 2005-- The Carlyle Group closed on the purchase of LifeCare Hospitals from GTCR Golder Rauner.
August 29, 2005-- Hurricane Katrina strikes. Twenty five patients died in the LifeCare Unit within Memorial Medical Center before officials evacuated the facility.
August 13, 2010-- LifeCare's 10-Q states:
"At the time of Hurricane Katrina, we operated an 82-bed facility in New Orleans located in Memorial Medical Center. We are currently defending ourselves against certain Hurricane Katrina related lawsuits and matters under review by the Louisiana Patient Compensation Fund. We are vigorously defending ourselves in these lawsuits."What did LifeCare do during the five year period? First, it entered a secret legal settlement with Tenet Healthcare over damages/liability from Hurricane Katrina. Second, it repurchased LifeCare debt at a deep discount, garnering a stimulus tax break. Third, it invested in joint venture with Select Medical Corporation. Fourth, it conducted sale-leasebacks with Health Care REIT on three LifeCare properties.
LifeCare has been busy with financial machinations, while vigorously defending lawsuits. Remember this when government says private equity underwriters (PEU's) are the balm for America's financial pain.