WEST LEBANON — Genesis HealthCare says it will continue operations at its two Upper Valley locations for the foreseeable future even after filing for bankruptcy in early July.
“There will be no expected impact to patient care as a result of this filing,” Neddie Brennan, Genesis director of corporate communications, said in a Tuesday email. “Our daily operations remain unchanged, and our commitment to those we serve continues uninterrupted.”
The Pennsylvania-based for-profit company is one of the largest skilled nursing companies in the nation, currently operating approximately 175 facilities across 18 states, with more than 15,000 residents and 27,000 employees, according to court documents.
The company’s locations in the Upper Valley are in Lebanon and Claremont. Lebanon Center, located on Old Etna Road, is a 110-bed facility offering short-term rehabilitation as well as long-term and respite care. Claremont’s Elm Wood Center is located beside Valley Regional Hospital and holds 68 beds, according to the Centers for Medicare and Medicaid Services, or CMS.
The Lebanon and Claremont facilities are among the 17 that Genesis operates in New Hampshire, according to bankruptcy filings.
The Chapter 11 bankruptcy filing stipulates that Genesis will continue to pay and provide benefits to its employees throughout the bankruptcy process.
The initial bankruptcy filing, filed July 9 in Northern District of Texas, states that Genesis has amassed between $1 billion and $10 billion in estimated liabilities — including a $324 million real estate owed to a Pennsylvania-based LLC and $103 million to the Internal Revenue System in deferred payroll taxes.
Court documents list between 10,001 and 25,000 creditors, and between $1 billion and $10 billion in assets.
Over the past decade, Genesis has faced financial troubles, which it chalks up to difficult state regulations and the COVID-19 pandemic.
Sales of assets, deferred trade obligations, reduced staffing, downsizing of locations and searches for further external funding were insufficient to allow the company to pay off its debts, according to court documents.
Genesis began in 1985 with nine centers, according to a written testimony by Genesis co-chief restructuring officer Louis E. Robichaux IV.
At the height of its expansion in 2016, Genesis was the largest skilled nursing operator in the United States, with over 500 facilities and 60,000 licensed beds across more than 30 states, Robichaux wrote.
But by 2017, Genesis started divesting from “unprofitable facilities,” decreasing from 500 facilities to 400 by the beginning of 2020, Robichaux wrote.
Just as this process began, the COVID-19 pandemic struck — the effect of which “cannot be overstated for the skilled nursing industry generally, and Genesis HealthCare specifically,” Robichaux wrote.
So, Genesis began preparing for a Chapter 11 bankruptcy filing in 2021.
But Genesis narrowly avoided filing for bankruptcy due to a private investment by ReGen Healthcare — a private equity firm — totaling around $100 million, and a restructuring of its master lease with its largest landlord, Welltower, wrote Robichaux.
The company subsequently downsized to the approximately 175 facilities that it operates today.
Still, expenses continued to climb. Settlement and defense costs totaled around $8 million per month, coming from “alleged personal injury and wrongful death claims, most of which date back many years,” Robichaux noted.
Brendan Williams, the president of New Hampshire Health Care Association, a long-term care advocacy organization, also traces the industry’s challenges to the COVID-19 pandemic.
From 2016 up to the pandemic, two nursing homes were sold in New Hampshire, Williams said. Since the pandemic, 22 have been sold.
As part of the restructuring under Chapter 11, Genesis is seeking a buyout. Affiliates of ReGen have made a “Stalking Horse Bid,” which is used to set the baseline for future bidding, for nearly all of the company’s assets, according to court documents. The amount has not yet been disclosed.
A hearing is scheduled for Tuesday, Aug. 5, to determine the bidding rules and timeline for the sale of Genesis.