Guardian Healthcare, headquartered in Brockway, has secured commitments for debtor-in-possession (DIP) financing as part of its Chapter 11 bankruptcy filing. Subject to court approval, the DIP financing, along with revenue from ongoing operations, is expected to support the company through its court-supervised restructuring process.
Herald, a spokesperson for Guardian Healthcare, emphasized the company’s dedication to collaborating with all stakeholders to expedite divestitures and operational transfers. “Our primary focus remains on delivering quality resident care,” Herald said. “We are grateful for the steadfast commitment of our employees to maintain this standard of care.”
As part of the bankruptcy proceedings, Guardian Healthcare plans to seek Bankruptcy Court approval to sell eight of its owned skilled nursing facilities. The Central Pennsylvania healthcare provider, facing financial pressures from inflation, rising costs, and labor issues over recent years, filed for Chapter 11 protection in the United States Bankruptcy Court for the Western District of Pennsylvania.
The filing includes Guardian Elder Care at Johnstown, LLC, operating as Richland Healthcare and Rehabilitation Center, and 19 affiliated entities, encompassing the companyβs skilled nursing facilities and related pharmacy and rehab services in Pennsylvania and West Virginia.
Facilities in Central Pennsylvania affected by the filing include:
- Guardian Elder Care at Hastings, LLC, d/b/a Haida Healthcare and Rehabilitation Center, 397 3rd Avenue, Hastings, PA 16646
- Guardian Elder Care at Johnstown, LLC, d/b/a Richland Healthcare and Rehabilitation Center, 349 Vo Tech Drive, Johnstown, PA 15904
- Guardian Elder Care at Brockway, LLC, d/b/a Highland View Healthcare and Rehabilitation Center, 90 Main Street, Brockway, PA 15824
A complete list of affected locations is available here.
Guardian Healthcare officials stated that the bankruptcy action was taken to ensure uninterrupted service for residents and to preserve crucial healthcare jobs. The company reassured that all facilities are continuing to operate normally.
Skilled nursing providers in Pennsylvania are facing a crisis in the current environment. Guardian Healthcare attempted to do everything possible to overcome this crisis. Despite these efforts and faced with the industry environment in Pennsylvania, Guardianβs current situation is unsustainable.β
Michael Herald, President & CEO of Guardian Healthcare
Chief Restructuring Officer Allen Wilen of EisnerAmper LLP explained, βThe decision to pursue in-court restructuring was made with the best interests of our residents in mind. This action provides the necessary relief to allow the Debtors to keep operating while focusing on resident care and safety, and to achieve the best possible outcome for all stakeholders involved.β
The skilled nursing industry has faced significant financial difficulties recently, driven by the ongoing effects of the COVID-19 pandemic, labor shortages, rising wages, staffing ratio issues, and increased costs associated with agency labor. Despite efforts to restore financial stability, escalating inflation and labor costs hampered Guardian’s ability to successfully restructure. The company negotiated with key stakeholders for over a year, but the resolution did not provide sufficient financial relief, leading to the Chapter 11 filing as the most viable option.
Guardian Healthcare is also working to transfer operations of its leased skilled nursing facilities to a new operator. This transaction, like other aspects of the restructuring, will require Bankruptcy Court approval once finalized.
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