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Cantrell Drug Co. of North Little Rock filed for chapter 11 protection on Tuesday listing $7.46 million in debts, Arkansas Business reported. The firm, which sells sterile injectable drugs mainly used in hospitals, reported $15.1 million in assets in its filing in U.S. Bankruptcy Court in the Eastern District of Arkansas. Dr. James L. McCarley Jr., chairman and CEO of Cantrell Drug, said that the financial problems were linked to two recent Food and Drug Administration inspections that resulted in a temporary suspension of manufacturing and shipping. In 2015, Cantrell Drug generated $18.5 million in gross revenue; the next year the amount grew to $23 million. But so far this year revenue plummeted to $10 million, according to the filing.

Genesis Health Inc., one of the nation’s largest nursing home operators, warned Wednesday that without relief from creditors it may have to file for bankruptcy protection, the Philadelphia Inquirer reported. “As currently structured, it is unlikely that the company will be able to generate sufficient cash flow to cover required financial obligations, including its rent obligations, its debt-service obligations and other obligations due to third parties,” the Kennett Square company said in its quarterly report to the Securities and Exchange Commission. Genesis blamed “the persistent pressure of health care reforms enacted in recent years.” Changes have aimed to keep the elderly out of nursing homes or at least to reduce the amount of time they spend in the facilities. Genesis said it had entered into preliminary agreements for relief with two of its landlords, units of Sabra Healthcare REIT Inc. and Welltower Inc. Those arrangements call for Sabra and Welltower to sell an unspecified number of facilities and for Genesis to lease them from the new owners at a reduced rate. That help could come in the first half of next year.

A Medicare fraud lawsuit against skilled nursing home chain HCR Manorcare Inc. is heading to court this week without a key government witness, WSJ Pro Bankruptcy reported. Judge Claude Hilton of the U.S. District Court in Alexandria, Va., on Monday signed off on an order excluding a report and testimony from the Justice Department’s expert witness, Rebecca Clearwater. At ​a recent​ hearing, a magistrate judge ​said the government’s case relying on Clearwater’s testimony was resting on a “house of cards.” ​Magistrate Judge Theresa Buchanan concluded that Clearwater was untruthful about the existence of notes she failed to produce in time for key depositions or to include in her report supporting the government’s case. A trial is scheduled for Jan. 22, 2018.

The potential sale of a bankrupt Eden hospital’s assets faces an objection from the lien holder of two hospital properties, the Winston-Salem (N.C.) Journal reported. The filing by First Citizens BancShares Inc., submitted yesterday, comes two days after the board of directors for Morehead Hospital accepted the bid of Miami for-profit company Empower iHCC Inc. for the assets. Judge Benjamin Kahn, with the U.S. Bankruptcy Court for the Middle District of N.C., could say at a hearing on Monday in Greensboro whether he approves of the board’s choice. The hospital filed for chapter 11 bankruptcy protection July 10. First Citizens has a $1.34 million lien on the Dayspring and Thomson Street buildings. The bank was among seven qualified bidders for the assets. It submitted a credit bid of $1.34 million for the real property collateral of the buildings. Read more. 

For more on hospital and health care insolvencies, be sure to pick up a copy of the ABI Health Care Insolvency Manual, Third Edition from the ABI Bookstore. 

Cardiac Connection Home Health Care Nursing Services Corp., a Chesterfield County, Va.-based business, filed for chapter 11 protection on Monday, but the lawyer representing the company said the business plans to continue operations, the Richmond Times Dispatch reported today. The home health company, which has 12 employees, provides care to patients after they have been released from the hospital with serious cardiac issues, according to Robert Westermann, an attorney with Hirschler Fleischer who is representing Cardiac Connection. But the company has some “obligations that just need to be restructured” through chapter 11, Westermann said, including its Medicaid and Medicare billings. They needed to be able to “address all these creditor claims in one forum, rather than putting out several different fires from different creditors,” he said. In U.S. Bankruptcy Court in Richmond on Wednesday, Westermann said, the company was granted authority to continue to meet all its payroll obligations and to continue to use receivables that are collected from the government from Medicare and Medicaid. In its filing, Cardiac Connections listed its estimated assets as between $100,001 and $500,000, with its estimated liabilities between $500,001 and $1 million. Read more. 

For more on hospital and health care insolvencies, be sure to pick up a copy of the ABI Health Care Insolvency Manual, Third Edition from the ABI Bookstore. 

The fate of one of the largest U.S. nursing home operators, HCR ManorCare, will reach a critical court deadline on Thursday in a battle over months of unpaid rent, a growing problem in an industry where eviction would put thousands of elderly out on the street, Reuters reported. In a lawsuit filed in August, HCR ManorCare’s landlord, Quality Care Properties Inc, said the chain owes more than $300 million in rent at its 292 skilled nursing and assisted living locations. ManorCare has until Oct. 18 to respond to the lawsuit Quality Care filed seeking to replace management with a court-appointed receiver who would oversee everything from laundry and meals to patient care at ManorCare’s facilities.

Efforts to demolish a north Peoria, Ariz., eyesore ground to a halt after the company that once planned to build the city's first hospital filed for bankruptcy on Oct. 3, AZCentral.com reported yesterday. Peoria was weeks away from demolishing the partially built hospital when Peoria Regional Medical Center LLC filed for chapter 11 protection. The project had sat inactive for five years, the two-story rusted steel skeleton towering above Lake Pleasant Parkway and surrounding homes in the rapidly growing area. The $30 million hospital had broken ground in 2011, but work stopped a year later due to lack of financial backing. The city attorney advised staff to hold off on demolition until the court makes a decision on the bankruptcy claim. There is no timeline for when that will occur.In early 2016, the Peoria Police Department's code enforcement division ordered the property owners to fix code violations such as overgrown weeds and unsecured fencing. The owners fixed the violations and met with Peoria's Economic Development Department to say they were still looking for funding to finish the project, said Jay Davies, deputy director of the Peoria Police Department. But they never followed up with a timeline, he said.

Just five months after filing for bankruptcy, the company that operates the largest chain of freestanding emergency rooms in the U.S. says it will soon return as a privately held company, the Dallas Morning News reported. A North Texas judge has confirmed Adeptus Health’s restructuring plan, and the company could emerge from chapter 11 in the coming days. Adeptus Health operated nearly 100 freestanding emergency rooms and five hospitals in a handful of states, including Texas, Arizona and Colorado, when it filed chapter 11 in April. Founded in 2012, the company grew quickly into an expansive enterprise with more than 3,200 employees and its number of shareholders reached to more than 140 affiliated entities. Yet the Adeptus entities struggled to generate the revenue to cover costs at their 24-hour emergency operations, and the expense of opening of new hospitals added even more debt. Read more. 

For more on hospital and health care insolvencies, be sure to pick up a copy of the ABI Health Care Insolvency Manual, Third Edition from the ABI Bookstore.