Following widespread media reports citing unnamed sources that Petersen Health Care is planning to file for bankruptcy, the operator of nearly 100 care facilities in the rural Midwest confirmed to McKnight’s Long-Term Care News Thursday it has no intention of going out of business.
Some type of restructuring will be necessary to adapt to financial pressures, a company representative told McKnight’s, but Petersen has every intention of remaining a provider of care in the communities it currently serves in Illinois, Iowa and Missouri.
Speculation into Petersen’s financial difficulties have increased since a Feb. 16 Bloomberg report claimed the provider was preparing to file for Chapter 11 bankruptcy, citing multiple anonymous sources.
A Chapter 11 bankruptcy may allow a debtor to continue operating its businesses and even borrow additional money, subject to court approval, but requires reorganization of those businesses to keep them healthy and able to repay creditors over time.
Petersen is currently embroiled in a two-front legal battle over more than $50 million in alleged unpaid debts. Partially stemming from those cases, more than a dozen Petersen facilities have been placed in receivership since January.
A Petersen representative clarified that, despite a court document that references “foreclosure” throughout, the provider continues and will continue to own all the facilities that are under receivership and is working closely with the receivers to ensure employees and residents are taken care of.
“When people read about receivership actions, often folks go to an extreme,” said David Campbell, a representative for Petersen familiar with the matter, who responded to a McKnight’s inquiry to the company. “We certainly have seen rumors about certain things and actions. Petersen is not going out of business — it will continue to be an employer of choice, it will continue to be a place where individuals get the care that they need.”
A representative emphasized that the financial challenges faced by Petersen are the same as those faced by rural providers all around the country — namely inflation, lower availability of staff and revenues beholden to state reimbursement levels.
“This is not about a company,” Campbell said. “This is about healthcare, this is about our healthcare environment and it’s about the challenges that providers are facing — especially rural providers.”
