JOHNSTOWN ― Richland Healthcare and Rehabilitation Center in Richland Township has filed a voluntary petition for Chapter 11 bankruptcy through its corporate entity, Guardian Healthcare.
Separate petitions were filed on July 29 through the U.S. Bankruptcy Court for the Western District of Pennsylvania on behalf of Guardian Elder Care at Johnstown, doing business as Richland Healthcare and Rehabilitation Center, and 18 other affiliated skilled nursing care facilities, pharmacy and rehabilitation companies in Pennsylvania and West Virginia.
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Filing for Chapter 11 bankruptcy allows a corporation to continue to operate while reorganizing and creating a plan to repay all or part of its debts, according to the U.S. Department of Justice.
“All Guardian Healthcare facilities are operating as normal and remain focused on the care and safety of their residents,” the company stated in a public announcement of the petition.
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Why and how Guardian made this decision
The company cited “strong industry headwinds” that have caused “major financial challenges” for skilled nursing providers in Pennsylvania, including labor shortages, rising wage inflation, unfunded new staffing ratios and increased reliance on high-cost agency labor.
“Guardian Healthcare attempted to do everything possible to overcome this crisis. Despite these efforts and faced with the industry environment in Pennsylvania, Guardian’s current situation is unsustainable,” said Michael Herald, company president and CEO, in the company’s public announcement.
The company has commitments for debtor-in-possession financing which, when added to cash it receives through its continued operations, should support these facilities while the reorganization of the company is in progress, the announcement said.
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Guardian Healthcare plans to ask the court’s approval to sell eight of its skilled nursing facilities, with a purchaser serving as the “stalking horse bidder” for the facilities and their related operations, and also transfer operations of its leased skilled nursing facilities to a new operator, according to the public announcement.
Omni Management Group, the claims agent for the company, has created a Guardian Elder Care at Johnstown restructuring website with information about the bankruptcy filing and updates on the court proceedings. Those interested in the case can also call 866-771-0557 (in the U.S. and Canada) or send an email to [email protected].
Beth Ann Miller covers communities in northern Somerset County for the Daily American. Send story ideas to her at [email protected].
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