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Petersen Health Care Inc., which runs around 100 nursing homes and assisted living facilities in the Midwest, is preparing to file for chapter 11 bankruptcy in the coming weeks, Bloomberg News reported. The Peoria, Ill.-based company has had more than a dozen of its locations put into receivership in recent weeks, according to court papers. In late January, a court ordered several of the company’s facilities to be put into receivership after lenders alleged that the company had defaulted on its debt. On Tuesday, two more of its facilities were put into receivership. Senior living companies have faced immense pressures since the COVID-19 pandemic began. Many struggle with persistent staff shortages and higher costs for labor, supplies and insurance, and inadequate government reimbursements.

Invitae, a genetic-testing business backed by investors including SoftBank Group and Cathie Wood’s ARK Investment Management, has filed for bankruptcy, blaming poorly-timed acquisitions, macroeconomic headwinds and turnover in its top ranks, WSJ Pro Bankruptcy reported. The San Francisco-based company, with assets of $535 million and debts of $1.6 billion as of Sept. 30, entered chapter 11 Tuesday with a restructuring agreement supported by most of its senior secured bondholders, according to a court filing. The publicly traded company plans to market its assets in a court-supervised auction process. Invitae stock traded at almost 2 cents apiece Wednesday afternoon, down roughly 35%. It had consistently traded in the $2 range as recently as last February. In 2020, its shares were valued at well over $50 each. Invitae attributed its bankruptcy to several factors, including a spate of 13 acquisitions it made between 2019 and 2021.

About a year and half ago, a small San Antonio pharmacy found itself in Bexar County’s crosshairs, targeted because of the huge amount of pain pills it dispensed. A lawyer for the county dubbed it a “pill mill.” So Trinity Pharmacies LLC was added to a 2018 lawsuit targeting drug manufacturers, a distributor and various retailers that officials said were fueling the opioid addiction crisis sweeping the San Antonio area. The litigation — in which Trinity is charged alongside retail giants such as CVS, Walgreens and Walmart — became too costly for Trinity. So, on Feb. 4, it sought chapter 11 bankruptcy protection, the San Antonio Express-News reported. “It can’t, your honor, sustain the litigation costs,” Trinity lawyer H. Anthony Hervol told Chief U.S. Bankruptcy Court Craig Gargotta during a hearing Wednesday. The pharmacy has racked up more than $40,000 in legal fees defending itself in the massive multi-district litigation that’s unfolding in Harris County District Court. The bankruptcy puts the county’s lawsuit against Trinity on hold. But the filing under a subchapter of the bankruptcy code designed for small-business debtors is part of a larger legal strategy its owners hope will eventually do away with the causes of action against it. The county's claims against Trinity and other retailers include: negligent and/or intentional creation of a public nuisance; common law fraud; and civil conspiracy. The county seeks to recover from defendants its costs associated with the opioid epidemic and punitive damages.

Invitae, a medical genetics company that received backing from SoftBank Group at the height of the pandemic has hired restructuring advisers and is preparing to file for bankruptcy within weeks, WSJ Pro Bankruptcy reported. The company is working with FTI Consulting and law firm Kirkland & Ellis to explore strategic options, including bankruptcy, to address $1.5 billion in debt on its balance sheet. San Francisco-based Invitae, which has been on an acquisition spree in recent years, has started to shed some assets and cut costs, the company has said. Invitae’s decline parallels the collapse in value of its more popular industry peer 23andMe, a genetic testing company targeting consumers, that has seen its market cap shrink from $6 billion in 2021 to nearly zero. Invitae’s shares have tumbled to under $1 per share since 2020 when its stock reached over $50 and it had a market cap of over $7 billion. The company’s shares traded at 39 cents on Monday, following an 82% loss in value in the past 12 months. Invitae raised $1.2 billion in convertible debt from SoftBank in 2021, planning to use the proceeds primarily to acquire assets, the company has said. SoftBank remains an investor in the company.

Cano Health filed for chapter 11 protection in the U.S. Bankruptcy Court for the District of Delaware late on Sunday and said it entered into a restructuring support agreement to reduce debt and solicit potential offers, including the sale of the firm, Reuters reported. Shares of the Miami-based company fell more than 50% before the bell. The primary care provider said it has received a commitment for $150 million in new debtor-in-possession financing from some of its existing lenders, which is expected to provide sufficient liquidity to support its ongoing operations. Under the restructuring support agreement (RSA), Cano Health said it can convert nearly $1 billion in secured debt into a combination of new debt and full equity ownership in the reorganized entity. Further, the agreement permits exploration of partnerships and potential offers, including the sale of the company or all its assets, Cano said. The company expects to achieve about $290 million of annualized cost reductions by the end of 2024 and to emerge from the restructuring process in the second quarter of 2024. Cano Health listed estimated assets and liabilities in the range of $1 billion to $10 billion, according to the court filing.

Connecticut Gov. Ned Lamont (D) unveiled a plan Friday to cancel medical debt for residents of the Constitution State in what would be a first-of-its-kind initiative. The plan was first unveiled on ABC’s “Good Morning America.” According to ABC, the plan includes using $6.5 million in funds from the American Rescue Plan Act to cancel $1 billion of medical debt in collaboration with a nonprofit that buys and eliminates debt, The Hill reported. Those who are eligible for the cancellation include families that have debt equivalent to 5 percent or higher of their annual income. “This is not something they did because they were spending too much money. This is something because they got hit with a medical emergency,” Lamont said of those struggling with medical debt. “They should not have to suffer twice — first with the illness, then with the debt.” About 250,000 Connecticut residents are expected to have their medical debt erased, according to state officials.

Sen. Elizabeth Warren (D-Mass.) has asked the Justice Department’s bankruptcy watchdog to join forces with the tort claimants committee in its appeal to throw out prison healthcare provider Tehum Care Services’ chapter 11 case, WSJ Pro Bankruptcy reported. Warren on Wednesday sent a letter to Tara Twomey, director of the Executive Office for U.S. Trustees, and Kevin Epstein, U.S. Trustee for the Southern and Western District of Texas. In that letter, Warren said the committee, in its motion to dismiss, argued persuasively that the case is a “bad-faith attempt to defraud creditors, many of whom faced serious injury or death” under Corizon Health. Corizon split into two in 2022 — Tehum and operating business YesCare — using a controversial legal tactic known as the Texas Two-Step. Tehum filed for chapter 11 in February last year, carrying into bankruptcy court debts and liabilities to prisoners, healthcare providers, insurance companies and others accumulated by Corizon. YesCare, among the nation’s largest providers of healthcare in prisons and jails, operates business as usual, while malpractice lawsuits filed against Corizon by former and current inmates were paused because of Tehum’s bankruptcy.

An advertising agency that helped develop marketing campaigns for OxyContin and other prescription painkillers has agreed to pay U.S. states $350 million rather than face the possibility of trials over its role in the opioid crisis, attorneys general said yesterday, the Associated Press reported. Publicis Health, part of the Paris-based media conglomerate Publicis Groupe, agreed to pay the entire settlement in the next two months, with most of the money to be used to fight the overdose epidemic. It is the first advertising company to reach a major settlement over the toll of opioids in the U.S. It faced a lawsuit in at least Massachusetts but settled with most states before they made court claims against it.

Hospital bankruptcies spiked in 2023 with 12 filings compared to a total of 11 filings in the previous three years combined. Three of those bankruptcy filings were by hospitals in Texas, with another four hospitals in the state either closing or sharing plans to close as inflation, staffing shortages and other financial headwinds continue to challenge healthcare providers, according to Becker's Hospital CFO Report. Dallas-based Steward Health Care on May 1 closed Texas Vista Medical Center in San Antonio, resulting in 827 layoffs. The 325-bed hospital was already struggling financially when Steward acquired it in 2017, and the pandemic exacerbated its losses. Traditionally, the hospital served lower-income patients; nearly 25% of its patients cannot and do not pay for medical services, according to the health system. Steward, which is trying to to sell four of its hospitals amid financial difficulties, will also close the Medical Center of Southeast Texas in Beaumont, effective Feb. 2. All care offered at the Beaumont location will be taken in by the center's Port Arthur campus. The physician-owned hospital "was severely underutilized given the needs in the region," a spokesperson for Steward told Becker's. Another Texas physician-owned hospital, West Lake Hills-based the Hospital at Westlake Medical Center, closed its emergency department on Dec. 29. The decision came three months after the hospital filed for chapter 11 bankruptcy protection, citing significant debt that was exacerbated by the COVID-19 pandemic. La Grange-based St. Mark's Medical Center also closed its doors Oct. 12 after unsuccessful efforts to fulfill its financial obligations. After cutting nearly half of its staff in February, the hospital converted to a rural emergency hospital designation to preserve its emergency department services and most outpatient care. However, the hospital found it could no longer sustain the $13 million of mortgage debt, as it had been paying less than the full mortgage since 2020. Lion Star LLC, the group that operates Nacogdoches Memorial Hospital, filed for chapter 11 bankruptcy in November. The filing outlines that the hospital owes as much as $50 million to creditors. At least 200 creditors have claims against Lion Star, and the largest 20 credit claims total more than $8 million.