Genesis Healthcare Files for Chapter 11 Bankruptcy, Seeking Sale of Assets

Healthcare giant Genesis Healthcare Inc. filed for Chapter 11 bankruptcy, seeking a sale of its assets to a stalking-horse bidder. The company, which operates 297 affiliates, listed $1 billion to $10 billion in assets and liabilities, including over $708 million in secured debt and over $1.5 billion in unsecured debt. Genesis Healthcare is seeking $30 million in financing from its existing lenders to fund its Chapter 11 plan.

Healthcare giant Genesis Healthcare Inc. has filed for Chapter 11 bankruptcy, seeking to sell its assets through a stalking-horse bid. The company, which operates 297 affiliates, has listed $1 billion to $10 billion in assets and liabilities, including over $708 million in secured debt and over $1.5 billion in unsecured debt. Genesis Healthcare is seeking $30 million in financing from its existing lenders to fund its Chapter 11 plan.

Genesis, one of the nation’s largest nursing home providers, filed for bankruptcy on July 9, 2025. The company cited substantial liabilities tied to its rapid expansion during the mid-2010s as the primary reason for the filing. Among its debts, Genesis owes $104 million in unpaid payroll taxes to the IRS, $68 million to Healthcare Services Group (HCSG), and $58 million in Pennsylvania provider assessments. Additionally, it carries a $324 million real estate loan and has missed rent payments to Omega Healthcare Investors (OHI) [1].

ReGen Healthcare, an affiliate linked to Genesis through Pinta Capital Partners, has submitted a stalking-horse bid to acquire Genesis' operations. The bid sets the floor price for a potential Chapter 11 auction. ReGen is already an investor in Genesis, having provided a $50 million cash infusion in 2021 and investing a total of $100 million since then [2].

The DIP financing, totaling $30 million, is secured largely from existing lenders and will support operations during restructuring. Notably, Omega contributed $8 million (26.7% of the total), contingent on Genesis resuming full monthly rent payments. This highlights the interdependence between Genesis and its real estate partners, which could influence how REIT investors assess exposure to skilled nursing assets [2].

Genesis staff will remain in place during the Chapter 11 proceedings, as will vendor agreements, according to the press release. The company’s Executive Chairman, David Harrington, stated, “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” [1].

The restructuring also presents both risks and opportunities for investors in healthcare real estate investment trusts (REITs) and private equity. Risks include potential strain on REIT cash flows due to missed rent payments and the need to prioritize debt repayment. Opportunities include the possibility of distressed debt plays and sector consolidation, which could benefit private equity firms with capital-light models [2].

Investors are advised to consult legal and financial advisors before making decisions related to Genesis Healthcare's restructuring. The immediate risks are substantial, but the restructuring also opens avenues for value preservation and strategic acquisition. The skilled nursing sector faces a pivotal moment, and those who navigate this restructuring wisely may find themselves positioned to lead the next chapter of the sector's evolution.

References:
[1] https://skillednursingnews.com/2025/07/skilled-nursing-giant-genesis-healthcare-files-for-chapter-11-bankruptcy/
[2] https://www.ainvest.com/news/genesis-healthcare-s-chapter-11-filing-navigating-debt-and-opportunity-in-skilled-nursing-sector-25071010cc26fb656edb291c/