Genesis HealthCare sets new course via Chapter 11

October 2025 | DEALFRONT | BANKRUPTCY & CORPORATE RESTRUCTURING

Financier Worldwide Magazine

October 2025 Issue

Joining a growing number of healthcare bankruptcies this year, rehabilitation and nursing home operator Genesis HealthCare, along with its subsidiaries, has filed for Chapter 11 to facilitate the implementation of a financial restructuring.

Genesis HealthCare, based in Pennsylvania, operates approximately 218 skilled nursing facilities across 19 states, according to federal regulators. The company has faced persistent economic challenges, including post-pandemic pressures, legacy liabilities and insufficient Medicaid reimbursement rates.

Other notable healthcare bankruptcies over the past year include health system Prospect Medical Holdings, medical centre operator CareMax and hospital operator Steward Health Care.

According to Genesis’ bankruptcy filing, the company has up to 25,000 creditors and liabilities estimated between $1bn and $10bn. The restructuring process is designed to allow the company to continue operating without disruption, while addressing legacy liabilities associated with previously divested operations.

“We believe this financial reorganisation is a necessary step for our organisation to sustainably deliver on our mission of improving lives through delivery of high-quality healthcare and everyday compassion,” said Lauren Murray, chief operating officer at Genesis HealthCare. “The process is designed to ensure that we can continue to deliver on that commitment. We also are grateful for our talented staff and their dedication to excellence, which has positioned Genesis HealthCare for continued growth and a bright future.”

The Chapter 11 filing includes provisions to ensure that staff retain their positions, pay and benefits, so that patients and residents continue to receive care from familiar providers. Vendor agreements will remain in place while the restructuring process progresses.

In addition, subject to court approval, Genesis has secured a commitment of $30m in debtor-in-possession (DIP) financing from its existing secured lenders. This financing, combined with cash on hand and revenue from ongoing operations, will support the business in meeting its obligations and maintaining its focus on delivering quality care throughout the court-supervised process.

Moreover, court documents confirm that affiliates of Genesis’ investor, private equity firm ReGen Healthcare, have entered into a deal to acquire Genesis through a stalking horse bid. This bid sets the minimum price for the company’s assets in the event of an auction.

ReGen Healthcare previously invested in Genesis in 2021, when the company was nearing bankruptcy for the second time. Genesis first filed for Chapter 11 in 2000 and emerged from restructuring in 2001. ReGen’s 2021 investment included a $50m debt-financed turnaround, and the firm is affiliated with Pinta Capital Partners, founded by Joel Landau, owner of Allure Group.

“We have much to be proud of for the tremendous progress we have made as an organisation over the last several years as we have implemented a forward-looking, enterprise-wide shift from centralised to market-based operations,” said David Harrington, executive chairman of Genesis HealthCare. “Our ongoing work has confirmed that, to maintain our momentum, we must address our legacy debt structure.”

Genesis’ largest debts include a $324m real estate loan to MAO 22322 LLC, $104m in deferred payroll taxes owed to the IRS, $68m to vendor Healthcare Services Group, $58m in provider assessments in Pennsylvania, $46m to the Change Healthcare provider assistance fund, $13m in legal settlements and $12m to a union employees’ pension fund.

Serving as legal counsel to Genesis HealthCare is McDermott Will & Emery LLP, with Ankura Consulting providing financial restructuring and chief restructuring officer services. Jefferies is acting as exclusive investment banker.

Mr Harrington concluded: “The goal of the Chapter 11 filing is to emerge a stronger, healthier company poised to exceed our goals for clinical and operational excellence.”

As of late August 2025, the proposed acquisition by ReGen Healthcare remains subject to higher bids and court approval. Genesis has stated that full transaction terms will be disclosed shortly. The company continues to operate under court supervision, with hearings scheduled to address sale motions, lease rejections and DIP financing approvals.

Fraser Tennant