Genesis HealthCare’s bankruptcy sale has a new lead bidder offering around $1 billion following a renewed auction held Wednesday, according to the latest court filing.

After five rounds of bidding, 101 West State Street was selected as the winning bidder for the Genesis assets, notes the court filing in the U.S. Bankruptcy Court for the Northern District of Texas. Genie 3 Partners, also the stalking horse bidder, was named the backup bidder.

Genie 3 submitted a $991 million bid, while 101 West State Street’s winning offer of $1.015 billion included total bid-protection adjustments of $17 million, as outlined in the court filing. The winning bid also consisted of $343 million in cash, a $100 million promissory note, and the assumption of $572 million in liabilities.

Genesis lauds outcome

Genesis is satisfied with the outcome of the auction, a company spokesperson told Skilled Nursing News.

“Genesis HealthCare is pleased that the competitive, court-supervised process has produced a winning bid that reflects the value this organization,” the spokesperson noted in an emailed statement. “In the days ahead, Genesis HealthCare leaders will begin working directly with 101 West State Street LLC, and we will continue to keep our associates and residents updated as we have done throughout our restructuring efforts.”

The sale hearing is set for Jan. 20, and 101 West State Street’s bid is subject to court approval.

Genesis, which filed for Chapter 11 in July last year, operates 175 nursing homes across 18 states. The company carries over $2 billion in debt and faces more than 200 malpractice and wrongful death lawsuits, with $259 million tied to plaintiff claims.

“We would like to take this opportunity to remind those we serve that this next step does not change our operations or services, and our teams remain focused on improving the lives we touch through the delivery of high-quality healthcare and everyday compassion,” the emailed statement stated.

The second auction was conducted under revised bidding procedures approved by the bankruptcy court in December. It followed a renewed auction notice filed Dec. 24 that reset the auction and sale timeline.

In December, a federal judge rejected a proposed insider sale in which Genesis’ assets would have been transferred to entities affiliated with its private equity owners, including Pinta Capital Partners and ReGen Healthcare, and would have kept controlling investor Joel Landau in place.

“[T] he Second Auction was held, and based on the results of the Second Auction following five rounds of bidding and more than $100 million in additional consideration as compared to the Replacement Stalking Horse Bid, the Estate Broker, acting at the joint direction of the Debtors and the Committee and in consultation with the Consultation Parties, has designated 101 West State Street, LLC as the Successful Bidder and Genie 3 Partners, LLC as the Back-Up Bidder,” the court filing states.

(Source: U.S. Bankruptcy Court for the Northern District of Texas)