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Diving brief:
- Genesis Healthcare, one of the largest providers of qualified nursing installations in the country, deposited the bankruptcy protections on Wednesday.
- Genesis, based in Pennsylvania, which operated around 175 nursing institutions qualified in 18 states during his file, said he had fought against post-payic challenges, inherited liabilities and inadequate reimbursement of Medicaid. The staff will keep their posts and the deposit should not have an impact on patient care, said a spokesperson for Genesis in Healthcare Dive.
- The affiliates of Genesis’ Investor Regen Healthcare, a investment capital company, concluded an agreement to acquire Genesis, according to bankruptcy court documents filed on Thursday.
Diving insight:
Regen’s agreement to acquire Genesis is a “hunting horse offer”, which sets the soil price To buy Genesis in the event of auction.
The investment capital company has already invested in Genesis, while it was about to file for the second time in 2021, according to legal documents. The operator had deposited chapter 11 before in 2000 and emerged from the restructuring in 2001.
The initial investment of $ 50 million in Regen in 2021, associated with a rental restructuring agreement with the largest owner of Genesis, allowed the operator to avoid “closely” a bankruptcy deposit, according to court documents. The investment capital company continued to invest in Genesis and its investment has totaled around $ 100 million.
However, liabilities linked to past expansions, “Years of financial stress and expenditure in delayed capital”, pressures of the COVID-19 pandemic and an inadequate reimbursement of Medicaid prompted Genesis to deposit the protections of Chapter 11 on Wednesday.
“All things considered, although Regen’s cumulative investment of approximately $ 100 million (over about two years) allowed the company to avoid bankruptcy and provided a liquidity track to a company struggling with inherited passives and other commercial challenges, it was unfortunately insufficient for the company to fully transform its commercial model and to achieve long -term viability”, wrote Louis Robichaux IV, Restructuring, docrument blow.
In initial deposits, Genesis said he had up to 25,000 creditors, with liabilities between $ 1 and $ 10 billion.
Genesis has faced other financial challenges in the past, including nearly $ 54 million Fine in 2017 of the government to settle the allegations that he violated the law on false complaints to submit “medically useless therapy and palliative care services and largely lower nursing”.
Genesis joins an increasing number of notable bankruptcies this year. In January, Health System Prospect Medical Holdings deposited for the protections of Chapter 11. Last year, the operator of the Caremax medical center and the health care of the stewards of the hospital operator filed a bankruptcy.
Although health bankruptcies decreased in 2024, the sector has always won the second largest number of deposits in the past six years.
