An operator of nearly 100 Midwest care facilities is now embroiled in a two-front legal battle over more than $50 million in loans. Two lenders say that Petersen Health Care has failed to make payments due at 17 nursing homes across Illinois, Iowa and Missouri and are seeking foreclosure.
The Peoria, IL, company is among the largest care providers in the region, employing several thousand care workers at its facilities in suburban and rural Illinois.
The larger lawsuit — filed Jan. 23 by X-Caliber Funding in the U.S. District Court for the Northern District of Illinois Rockford — alleges $31 million in unpaid loans and made an emergency motion for eight Petersen facilities to be placed in receivership.
Two days later, those facilities were placed in receivership under Michael Flanagan, an attorney with Flanagan & Associates. Tutera Senior Living & Health Care currently manages care operations.
A separate lawsuit was filed Jan. 31 by lender Capital Funding in the US District Court for the Northern District of Illinois Eastern Division. The lender alleges $19 million in loans went unpaid past a Jan. 21 due date, with implications for nine more Petersen facilities in Illinois and Missouri.
Provider reaction
The provider told the Peoria Journal Star that it is cooperating with the receivership process, despite what it described as “very aggressive” legal action taken by X-Caliber.
“Petersen Health Care continues to own the facilities and is cooperating with Tutera to help ensure there is minimal impact on our staff and that our residents continue to receive quality care,” the statement read.
It further claimed that the legal actions are not impacting the daily operations of other Petersen nursing homes and that the company is working on resolving the receivership so that it can resume management of those eight facilities.
Petersen did not respond to McKnight’s requests for comment on the lawsuits Monday.
Mcknight’s previously reported on Petersen’s $3 million settlement with the US Department of Labor over an overtime wages dispute. Following the 2022 case, Petersen told McKnight’s it had paid all employees equitably, but said economic necessities had forced the company to accept a settlement.
