A nursing home operator in Arkansas has taken aim at the Community Compassion Center brand, alleging in court that the competitor running those facilities is using nonprofit status to avoid accountability.
Convacare Administrative Services filed a lawsuit in August in state court to challenge the classification of nonprofit organizations formed last year in connection with seven Community Compassion Centers and four related nursing homes.
Convacare CEO Joey Wiggins operates three for-profit nursing homes in Arkansas and formerly held consulting and management contracts with the 11 facilities involved in the case. He charged that Capital Funding Group improperly terminated those contracts last year.
His suit seeks $2.8 million and calls the homes’ nonprofit status an “attempt to invoke ‘charitable immunity’ and to avoid financial obligations.”
Little Rock native and former Arkansas Health Care Association President Randy Wyatt has served as Community Compassion’s president since the formation of the Community Compassion nonprofits, which acquired their licenses from the collapsed Skyline Healthcare, according to a local report.
While each of the seven facilities is licensed to a separate nonprofit with a local board of directors, Wyatt is chairman of each one.
He also is an employee of Capital Funding, which holds a corporate ownership stake. In addition, Wyatt was a vice president at Skyline, according to LinkedIn.
“The nonprofit defendants are undercapitalized and are not stand-alone entities, with functioning boards,” Convacare alleged in its filing.
“Further, none of the nonprofit defendants are engaged in a proper charitable purpose.”
Capital Funding Group did not respond to a message seeking comment for this story.