Genesis HealthCare, along with its subsidiaries, has taken steps to implement a financial restructuring to secure the long-term delivery of its mission. This process is designed to ensure that the company can continue operating in a seamless manner, while also allowing the company to address its legacy liabilities associated with previously divested operations.
To facilitate the company’s restructuring efficiently and with minimal disruption to ongoing operations, the company has filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Northern District of Texas Dallas Division.
“We have much to be proud of for the tremendous progress we have made as an organization over the last several years as we have implemented a forward-looking, enterprise-wide shift from centralized to market-based operations,” David Harrington, executive chairman of the Genesis HealthCare board of directors, said. “Our ongoing work has confirmed that, to maintain our momentum, we must address our legacy debt structure. The goal of this filing is to emerge a stronger, healthier company poised to exceed our goals for clinical and operational excellence.”
Subject to court approval, the company has secured a commitment of $30 million in debtor-in-possession (DIP) financing from its existing secured lenders. This DIP financing, combined with cash on hand and cash flow generated from ongoing operations, will support the business to satisfy its ongoing obligations and enable the company to remain focused on delivering quality care during the court-supervised process.
Importantly, the filing includes provisions to ensure that staff will retain their positions, pay and benefits so that patients and residents will continue to be served by the providers they trust. Vendor agreements will remain in place while the process moves forward.
“We believe this financial reorganization is a necessary step for our organization to sustainably deliver on our mission of improving lives through delivery of high-quality healthcare and everyday compassion,” Lauren Murray, chief operating officer of Genesis HealthCare, said. “We assure all those who rely on us for care that we remain fully focused on and committed to providing the high-quality care you have come to expect, and we thank you for your continued confidence. This 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.”
McDermott Will & Emery is serving as legal counsel, Ankura Consulting is providing financial restructuring and chief restructuring officer services (Russell A. Perry and Louis E. Robichaux IV, Co-CROs), and Jefferies is serving as exclusive investment banker.
