DISTRESSED DAILY: Fraud Fine Bankrupts Nursing Company

There’s been plenty of scrutiny on nursing homes during the pandemic. But a decade-old fraud case is what drove one group of operators into bankruptcy.

CMC II LLC and five related entities filed for bankruptcy on Monday after a court upheld a ruling that they overcharged the federal government. The companies ran 140 skilled nursing homes in six states in the northeast and Gulf regions, according to a court filing, and get about 85% to 90% of its revenues from government health care programs.

The pandemic has cast a spotlight on the vulnerabilities of long-term care facilities, which accounted for ...