Petersen Health Care files for bankruptcy amid financial struggles, plans to restructure

PEORIA - Petersen Health Care filed for bankruptcy March 20.

The Peoria-based company filed for Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware to facilitate the restructuring of its balance sheet, according to a news release issued by the company.

Petersen expects to continue operating as normal during the restructuring process. Subject to court approval, the company has secured a commitment of $45 million debtor-in-possession financing from lenders that will be used to fund operations and meet their financial obligations to associates and suppliers.

"Petersen will operate as usual, and our team remains committed to continuing to provide first-rate care for our residents,” said David Campbell, the company’s chief restructuring officer. “We will emerge from restructuring as a stronger company with a more flexible capital structure. This will enable us to continue as a first-choice care provider and a reliable employer for our staff.”

More:Despite financial struggles, Petersen Health Care says it's 'not going out of business'

Petersen Health Care owns and operates skilled nursing facilities, assisted/independent living communities, homes for the developmentally disabled, and memory care services in Illinois, Missouri and Iowa.

Nineteen Petersen nursing homes were placed into receivership earlier this year at the request of two creditors who allege that Petersen is in arrears by about $55.5 million. Many of the facilities are in central Illinois.

Petersen says multiple issues led to financial difficulties for the company, which owns nearly 100 senior living facilities. Inadequate state and federal funding and staffing challenges were among the biggest challenges, Campbell told the Journal Star.

Teams from Getzler Henrich & Associates and Winston & Strawn LLP are working with Petersen Health Care as financial and legal advisors and will continue to support the company during the restructuring process.

More:Petersen Health Care faces foreclosure on nearly $51 million in loans