What is happening at Life Care Centers of America is a great example of how not to establish a succession plan, especially when it involves one of the largest privately owned senior care companies in the country. The company was founded by Forest Preston nearly 75 years ago, and he remains the CEO and sole shareholder of a company that is purported to be worth close to $1.2 billion. But he really has not run it for years.
I sat down with Forest about 15 years ago, when he agreed to do a long interview with me about his entire life and career. I could tell something was off, and he had a “minder” constantly by his side. But he was agreeable to do this with me, and seemed to look forward to it. Follow-up calls, however, were either ignored or short with pleasantries such as “sure, whenever you want.” Nothing ever happened, which is too bad because he had a wealth of information about the industry.
I also knew his son, Aubrey, who had a few investments in skilled nursing facilities, and he spent a day with me touring the Denver SNF market in the early 1990s. He was incredibly knowledgeable, and every administrator seemed to know him. He was, I thought at the time, the perfect candidate to succeed his father at Life Care Centers. That was not his plan, as he was more interested in country music and other things, and it was not Forest Preston’s plan either. The problem, as I saw it, was that Forrest just could not let go. The executive suite became a revolving door as people began to understand he would never retire. And then, as has been alleged, people began to take advantage of him. All we can say is, what a shame, and it did not have to come to this if a proper succession plan had been put in place.
Now, from what we have read, Aubrey has been appointed conservator, a role we believe he did not really want but was something he had to do. He will protect his father, the company and its stakeholders, and, we suspect, work on a succession plan or a possible sale of the company. A sale, given the current situation, would be difficult. We wish the best for the Preston family and hope the issues can be resolved soon. Life Care Centers is an important company and it needs leadership, direction and a succession plan.
SM
