Genesis HealthCare, one of the nation’s largest nursing home providers, has declared Chapter 11 bankruptcy.

The potential buyer is affiliated with ReGen Healthcare, which is a current investor in Genesis, the company shared in an emailed statement to Skilled Nursing News.

“The proposed transaction, the terms of which will be publicly disclosed shortly, is subject to higher bidding and court approval, and if approved, would result in the current affiliate acquiring the Company’s operations,” the statement read.

ReGen Healthcare and its affiliated investment firm, Pinta Capital Partners, were involved in the restructuring of Genesis in March 2021 when Genesis first narrowly avoided a bankruptcy. Genesis received a cash infusion from ReGen Healthcare, leading to a change in ownership and delisting from the New York Stock Exchange.

About $100 million in funding from ReGen Healthcare and a lease restructuring with Welltower, to which the company owes more than $112.6 million, helped Genesis avoid filing for Chapter 11 at the time, the company noted in its court filing from July 9.

This included funding of approximately $8 million per month in settlement and defense costs arising from alleged personal injury and wrongful death claims, most of which date back many years, the court filing said, referring to the funding received.

“This filing and proposed transaction are essential steps in definitively moving beyond our legacy debts, completing our transformative process and ensuring that we can deliver on our mission far into the future,” a company statement to SNN stated.

Genesis staff will remain in place during the Chapter 11 proceedings, as will vendor agreements, the company said.

“We have much to be proud of for the tremendous progress we have made as an organization over the last several years as we have implemented a forward-looking, enterprise-wide shift from centralized to market-based operations,” David Harrington, Executive Chairman of the Genesis Board of Directors, stated in a press release. “Our ongoing work has confirmed that, to maintain our momentum, we must address our legacy debt structure. The goal of this filing is to emerge a stronger, healthier company poised to exceed our goals for clinical and operational excellence.”

Genesis has secured $30 million in debtor-in-possession (DIP) financing from one of its existing secured lenders, subject to court approval, the company’s press release stated. Omega Healthcare Investors (NYSE: OHI) has committed $8 million to fund 26.7% of the DIP financing, the real estate investment trust disclosed Thursday in an update to its investor presentation.

The company – which is based in Kennett Square, Pennsylvania, and operates more than 200 facilities nationwide – is pursuing a “proposed transaction involving a current affiliate,” the press release states.

Questions have swirled around Genesis’ financial stability in recent months, as the provider failed to make full contractual rent payments to Omega earlier this year. A condition of Omega’s DIP commitment is that Genesis must make full monthly contractual rent. In addition, the proposed DIP budget “anticipates confirmation of the plan or sale of assets” by the end of this year or early next year, according to Omega’s business update.

“We believe this financial reorganization is a necessary step for our organization to sustainably deliver on our mission of improving lives through delivery of high-quality health care and everyday compassion,” said Lauren Murray, COO of Genesis HealthCare, in the company’s press release. “We assure all those who rely on us for care that we remain fully focused on and committed to providing the high-quality care you have come to expect, and we thank you for your continued confidence.”

As for Genesis’ relationship with LTC Properties (NYSE: LTC) – affiliates of Genesis lease six skilled nursing centers in New Mexico and Alabama with a total of 782 beds under a master lease with LTC – the master lease matures on April 30, 2026, and provides three 5-year renewal options, LTC said in a press release.

“On June 3, 2025, LTC received Genesis’ written notice of its exercise of a 5-year extension option, which would extend the term of the lease to April 30, 2031,” LTC’s statement noted.

LTC’s annualized revenue from Genesis was $8.4 million, representing 4.5%, while annualized contractual cash revenue was $9.5 million, representing 5.1%, as of March 31, 2025. Genesis has paid their contractual rent through July 2025. LTC also holds $4.7 million of security from Genesis as required by the master lease in a letter of credit.

ReGen involvement

Genesis Healthcare once operated over 500 facilities, but struggled to maintain profitability as it expanded. Its rapid growth led to management challenges and inefficiencies from numerous mergers and acquisitions. In 2017, the company began divesting unprofitable facilities, reducing its footprint to under 400 facilities by 2020.

Just as this restructuring gained momentum, the COVID-19 pandemic hit, causing severe liquidity issues, the company said.

Despite operational improvements and downsizing, the company remained burdened by “legacy liabilities,” Genesis’ court filing further states.

Genesis filed for bankruptcy with $708.5 million in secured debt to be repaid through securing a “stalking horse” bid from ReGen affiliates to purchase most of its assets. It also owes nearly $800 million in unsecured debt to the Internal Revenue Service (IRS), vendors, and legal settlement recipients.

“During the first half of 2025, the Company and its restructuring advisors engaged with key holders of the Company’s funded debt to negotiate the terms of a comprehensive solution. Following extensive, arm’s-length negotiations, the Company today enters chapter 11 with a clear and defined exit path,” the filing states.

Genesis employs 27,000 people, and stated in the bankruptcy filing that it owes between $1 billion and $10 billion to its creditors.

(Zahida Siddiqi contributed to the reporting.)