In a dramatic turn of events for the U.S. healthcare sector, Genesis Healthcare Inc., the corporate backbone of hundreds of nursing homes and rehab facilities across 18 states, has filed for Chapter 11 bankruptcy protection, along with nearly 300 affiliated entities, following a catastrophic mix of crushing debt, costly lawsuits, delinquent taxes, and a crippling cyberattack.
With liabilities surpassing $2 billion, the Pennsylvania-based operator—employing over 27,000 people nationwide—entered bankruptcy court in Texas on Wednesday evening. The Chapter 11 petition reveals a staggering $708.5 million in secured debt and an even more formidable $1.568 billion in unsecured claims, according to co-chief restructuring officer Louis E. Robichaux IV in his first-day declaration.
A Perfect Storm of Financial Devastation
The financial unraveling of Genesis is a textbook case of what can happen when external shocks collide with internal vulnerabilities. The company was already balancing on a financial tightrope due to legacy tax burdens, ongoing litigation, and operational challenges in a post-pandemic healthcare landscape. But it was the final blow—a cyberattack—that sent its financial architecture tumbling.
“These combined pressures eroded liquidity and left the company with no viable path forward outside of reorganization,” said Robichaux.
