Texas’ largest nursing home operator has filed for bankruptcy, hoping to get out from under the weight of “ballooning rent payments.”

Senior Care Centers announced the move in December, noting that it would allow the company to continue operating its 100 skilled care and senior living centers without interruption. 

“As the entire industry has seen, the leases associated with the communities have become cost-prohibitive,” said Chief Operating Officer Michael Beal. “This kind of action is absolutely necessary to address those costly leases while continuing to care for our patients and residents.”

Signs of trouble appeared in November, when Sabra Health Care said it was cutting ties with its largest tenant after SCC defaulted on rent payments. Following the bankruptcy filing, the Irvine, CA, real estate investment trust announced in December that it had inked a deal to sell the 36 SNFs and two senior housing communities occupied by SCC for $385 million in cash.

Another landlord, LTC Properties, also said it had not received December’s rent from Senior Care Centers, which leases 11 SNFs from the California company. LTC Properties requested a consensual termination of those rental agreements and was “strongly urging” its occupant to reject those leases in the bankruptcy process.

Senior Care Centers operates nursing homes in both Texas and Louisiana, serving nearly 10,000 individuals. Bankruptcy documents showed that SCC was saddled with $100 million in debt, including $31 million in unpaid Sabra leases, alongside reimbursement cuts.

“If the largest nursing home operator in the state filing for bankruptcy doesn’t yell, ‘We have a big problem in terms of Medicaid funding here,’ I don’t know what does,” Kevin Warren, president and CEO of the Texas Health Care Association, told the Dallas Morning News.