An insider group more than doubled its original cash bid to win a bankruptcy auction for all of the assets of beleaguered Genesis HealthCare, the company revealed Monday in court filings.
Once the largest skilled nursing operator in the US, Genesis’ fall has been precipitous. It now operates 175 skilled nursing and assisted living facilities in 18 states and was facing more than $2 billion in debt when it filed for Chapter 11 protection in July.
CPE 88988 LLC, an affiliate of Genesis private equity owner Pima Capital Partners, made the winning offer for the company and its assets, according to a notice filed by Genesis Monday in the US Bankruptcy Court for Northern Texas. The group raised its initial cash offer of $15 million to $40 million in response to competing bids from two other unnamed sources.
Since those bids were opened on Nov. 19. Genesis said it has reviewed the offers in six meetings with its Special Restructuring Committee and received written comments from its major debtors, including White Oak, Welltower and Omega.
The overall value of the deal, which includes the assumption of certain debts and expenses, could reach more than $147 million, Bloomberg Law reported Monday.
The sale could be finalized at a court hearing scheduled for Wednesday, Dec. 11.
The winning bidder, a ReGen Healthcare LLC affiliate, is led by Joel Landau, who already holds a majority interest in Genesis. The sale to the so-called stalking horse bidder — an insider hand-selected by those in charge during the Genesis slide — has been criticized sharply.
Creditors, including those owed more than $200 million in settlements and judgments, unsuccessfully asked the court to slow down the sale process.
On Monday, Sen. Elizabeth Warren (D-MA), repeated criticism of the pending ReGen deal.
Last month, she had asked a federal bankruptcy watchdog to intervene in the case, arguing that Genesis was abusing the system. A “very similar group of individuals who already own or control Genesis are trying to sell it to themselves, wiping away legal and other creditor debts in the process,” she charged.
After that attack, a spokeswoman for Genesis told McKnight’s Long-Term Care News that the debtors’ sale prcoess was “anything but a one-horse race.”
“To the contrary, the Debtors, pursuant to Court-approved bidding procedures, have consistently encouraged the participation of anyone interested in bidding for some or all of their assets,” the company said.