Goodlander, Warren, Blumenthal, and Welch Investigate Genesis HealthCare Private Equity Bankruptcy and Its Impact on Nursing Home, Assisted Living Residents Across the Country

Washington, D.C. - Congresswoman Maggie Goodlander (D-N.H.), alongside Senators Elizabeth Warren (D-Mass.), Richard Blumenthal (D-Conn.), and Peter Welch (D-Vt.), sent a letter to Louis Robichaux IV and Russell Perry, Co-Chief Restructuring Officers of Genesis HealthCare, and Joel Landau, Managing Partner of Genesis' private equity owner, pushing for information related to Genesis' private equity-caused bankruptcy and its apparent attempt to use the bankruptcy process to wipe away the company's debts to victims and businesses.

Read the full letter here.

"Patients and family members hurt by Genesis, together with taxpayers who have paid hundreds of millions of dollars for patient care at Genesis through the Medicaid and Medicare programs…deserve answers regarding the cause of this bankruptcy," wrote the lawmakers.

"Genesis appears to be attempting to use the bankruptcy system to escape its liabilities, leaving businesses and victims in the lurch," the lawmakers continued.

The lawmakers asked the executives to provide, by October 21, 2025, information about the structure of Genesis and ReGen, along with information about Genesis' bankruptcy and potential sale to insiders, including Genesis' plan to ensure a potential sale does not lead to the same practices that led to the deterioration of the quality of care in Genesis facilities.

Background:

In 2007, private equity firms JER Partners and Formation Capital bought Genesis HealthCare. In 2011, the firms sold Genesis' 180 facilities and nearly 20,000 assisted-living and long-term care beds to a health care real estate investment trust for $2.4 billion. The sale, which mirrors a similar move by the private equity owners of the now-defunct company Steward Health Care , left Genesis with costly leases and long-term debts on real estate it once owned, while securing payouts for the private equity owners and other Genesis investors.

By March 2021, the sale of its real estate assets had led Genesis to the brink of bankruptcy. As a result, Genesis accepted a $100 million investment over two years from Mr. Landau's private equity firm, ReGen Healthcare LLC, in exchange for 93 percent equity and the right to appoint two board members. ReGen acquired the right to appoint an additional board member in 2023 in exchange for an additional $25 million.

ReGen's takeover of Genesis has led to worse outcomes for patients. Since the takeover, the proportion of Genesis facilities rated above average (4-5 stars) by the Centers for Medicare & Medicaid Services declined from 38 percent to 15 percent, and the average facility rating fell from 2.98 to 2.29 stars. Even before the ReGen takeover, Genesis had a history of mistreating nursing home patients, including failing to properly monitor, treat, and care for patients, leading to "serious, and sometimes fatal, infections and accidents."

Earlier this year, Genesis, struggling under the weight of its mounting debts, filed for Chapter 11 bankruptcy. Prior to filing for bankruptcy, Genesis spent $8 million per month to settle and defend tort claims , and owes $259 million in outstanding litigation costs. The total amount Genesis owes is likely much higher, as 165 claims remain pending, with some estimating that Genesis owes potential victims more than $344 million. Genesis also owes more than $12 million in unfunded liabilities to its employees' pension fund, and more than $160 million to medical supply, pharmacy, and other vendors. Despite these liabilities, Genesis' sale plan would dedicate only $15 million to pay administrative claims and unsecured creditor debts, and Genesis' Chief Restructuring Officer acknowledged that victims "may get nothing."

Shortly after filing for bankruptcy, Genesis announced it had struck an initial deal to be acquired by affiliates of ReGen. This type of insider bid is called a "stalking horse" bid, which experts have warned often results in a lower recovery for creditors and may allow insiders to shed the company's debts without having to pay a competitive price for the estate. Parties in the Genesis bankruptcy have testified that the bidding process is designed to favor the insider bid and that it will chill bids from other potentially interested companies.

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