Nursing home chain with 175 facilities files for bankruptcy
At its height in 2016 the company was operating more than 500 senior homes but found the scale to be unsustainable. However, even after selling off more than three fifths of their facilities, the company was tied into legacy liabilities including costly legal claims, legal filings submitted to the US Bankruptcy Court in Dallas reveal.
The company has around 27,000 employees which it aims to keep in their positions as it enters bankruptcy. Genesis's creditors have committed $30 million to fund the bankruptcy proceedings and said residents will be able to stay in their homes and be cared for throughout.
Private investment company ReGen Healthcare has made $100 million initial bid to purchase most of Genesis's assets out of bankruptcy, however the business is holding out for a bigger offer.
Genesis teetered on the edge of bankruptcy during the pandemic but secured financing for ReGen. In return the investment entity put its own directors on the board, according to court papers. Genesis was founded in 1985 with nine nursing centers, a network that grew substantially over time with a focus on Medicare patients, the Journal reported.
In 2024 the company's income came 61 percent from Medicaid, 17 percent Medicare, and 13 percent commercial insurance. There are almost 2,000 senior living facilities dotted across the country. At least 16 have filed for bankruptcy since the pandemic hit in March 2020, according to Wall Street Journal analysis. Those Chapter 11 filings wiped out $190 million worth of savings from 1,000 families, including 212 from the recently bankrupt Harborside on Long Island, New York.
Harborside, a continuing-care retirement community in Port Washington filed for Chapter 11 bankruptcy in October last year. Its elderly residents each paid a substantial entrance fee - between $425,000 and $1.7 million depending on the package - as well as thousands of dollars in monthly fees. Entrance fees can be refunded to family members on a resident's death or returned to the retiree if they choose to leave the facility.
However, when a facility such as Harborside enters bankruptcy the process ensures that secured creditors are paid before residents. This can mean that once debtors are paid the money due to families has been decimated.
Arlene Kohen, an 89-year-old resident at Harborside paid the standard $945,000 entrance fee by selling her Great Neck home for $838,000, according to The Wall Street Journal . Following the bankruptcy her family now expects to receive less than a third of the $710,000 refund the facility promised her.
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