Petersen Health Care, which runs around 100 nursing homes and assisted living facilities across the Midwest, is preparing to file for Chapter 11 bankruptcy in the coming weeks, according to Bloomberg News.

“Talks are not final and plans could change,” the Bloomberg report stated, citing unnamed sources with knowledge of the matter who asked not to be identified, citing privacy concerns.

The Illinois-based nursing home operator has faced legal challenges in recent weeks as prosecutors pointed to alleged unpaid loans. More than a dozen of its locations were put into receivership.

The Chapter 11 filing will allow the company to consolidate litigation and creditors, enabling it to continue operating while it develops a plan to repay its debts.

Skilled Nursing News reached Petersen for comment, but hadn’t received a response by the time of publication.

Litigation related to foreclosure cases filed in the Illinois Northern District Court in January alleged Petersen’s failure to repay nearly $51 million in loans, according to case filings. 

At the time, a court ordered several of the company’s facilities to be placed into receivership for allegedly defaulting on its debt.

Seventeen of Petersen’s properties were named in the cases, with eight being placed in receivership. And on Tuesday, two more of its facilities were put into receivership.

The nursing home sector has struggled amid low reimbursements and staffing shortages with generally higher operational costs that have resulted in a rise of closures – including abrupt shutdowns in the last few weeks.