Peoria, Illinois – Long-term care operator Petersen Health Care has announced plans to sell off portions of its facilities after filing for Chapter 11 bankruptcy. The company, which currently operates almost 100 senior care facilities in the rural Midwest, is burdened with nearly $300 million in debt, including millions of dollars owed in loans that resulted in eight Petersen-run facilities in Illinois being placed in receivership.
To aid in its restructuring efforts, Petersen secured a $45 million bankruptcy loan with the goal of maintaining operations to preserve the value of its facilities and generate additional revenue upon a sale. Petersen’s lawyer, Dan McGuire, informed the US Bankruptcy Court for the District of Delaware that the facilities are likely to be sold in chunks to multiple buyers who can continue providing the necessary level of care to the more than 5,300 residents.
McGuire further emphasized Petersen’s commitment to uninterrupted quality care and expressed the company’s desire to keep its facilities running during the bankruptcy process. The speculation of Petersen’s bankruptcy arose following a Bloomberg report in February, but the company had previously stated its intent to continue operating and providing care.
David Campbell, Chief Restructuring Officer at Petersen, affirmed the company’s dedication to its residents and staff, stating that despite the restructuring, Petersen will remain a first-choice care provider and a reliable employer.
Petersen’s financial struggles are emblematic of challenges faced by rural providers, including high inflation, low reimbursement rates, and staffing shortages. In addition to these challenges, the company fell victim to multiple cyberattacks, resulting in billing delays and difficulties accessing vital business records. The ransomware attack forced the replacement of servers, email addresses, and software, while a subsequent cyberattack on a major payer worsened Petersen’s economic conditions.
The sale of Petersen’s facilities represents a significant step in its efforts to address its crippling debt and restructure its operations. By focusing on finding buyers who can continue providing quality care, the company aims to ensure the well-being of its residents throughout the transition process. Despite the challenges it faces, Petersen remains committed to emerging from this restructuring as a stronger company with a more flexible capital structure.