The company that owns senior-living facilities in Kewanee, Galva and Toulon has been taken to court by two lenders who claim the firm has defaulted on a total of $51 million in loans.
Courtyard Estates in Kewanee is one of eight facilities owned and operated by Petersen Health Care that were placed in receivership by the U.S. District Court in Rockford.
Petersen’s Kewanee facilities include Courtyard Estates, Betty’s Garden, Kewanee Care Home and Royal Oaks.
After learning last week that Courtyard Estates could be under new management, The Kewanee Voice reached out to Petersen Health Care officials, and a company spokesman released the following statement:
“Amid ongoing discussions, one of our lenders took a very aggressive action and had eight facilities placed into receivership, including Courtyard Estates in Kewanee. Subsequently, the lender’s management group has gone on-site to assess and manage the operations of these facilities.
Petersen Health Care continues to own the facilities and is cooperating with the management group to ensure there is minimal impact on our staff and that our residents continue to receive quality care. No other Petersen Health Care locations in Kewanee, or outside those eight facilities, are affected by this action.”
The other Petersen facilities “will continue to operate as normal,” the statement said.
The website Investopedia states that a “receivership is a court-appointed tool that can assist creditors in recovering funds in default and can help troubled companies avoid bankruptcy. Having a receivership in place makes it easier for a lender to obtain the funds that are owed to them if a borrower defaults on a loan. The goal of a receivership is to return companies to profitability.”
According to an NPR report, “Attorney Michael Flanagan is the court-appointed receiver managing the eight Petersen facilities in X-Caliber’s case.”
“In a statement, Petersen Health Care said the lender ‘took a very aggressive action and placed facilities in El Paso, Flanagan, Kewanee, Knoxville, Monmouth, Galesburg, and Polo into receivership.’ They said X-Caliber’s management company, Tutera Group, then visited the sites without their prior knowledge to assess and manage care.”
X-Caliber Funding LLC claims that Petersen Health Care owes more than $31 million. Receivership means that Petersen Health Care is no longer running the facilities.
The Journal Star reported that the receiver, Michael F. Flanagan, of Flanagan & Associates in Kansas City, sent a letter to employees which was obtained by the Journal Star. It explained that business will continue as usual under the management of Walnut Creek Management Company, an affiliate of Tutera Senior Living & Health Care, a manager of skilled nursing and senior living facilities in Illinois. The letter also assures employees that they should not have trouble cashing their paychecks, but if they do, to contact their managers.
The Journal Star also reported that a second lawsuit against Petersen Health Care by Capital Funding LLC was filed Jan. 31 in the United States District Court for the Northern District of Illinois Eastern Division. It pertains to nine health care facilities: Batavia Rehabilitation & Health Care Center in Batavia; Timbercreek Rehab & Health Care in Pekin; Fondulac Rehabilitation & Health Care Center in East Peoria; Bloomington Rehabilitation & Health Care Center; Sunset Rehabilitation & Health Care Center in Canton; Eastside Rehabilitation & Health Care Center in Pittsfield; Cisne Rehabilitation & Health Care Center in Cisne; Benton Rehabilitation & Health Care Center in Benton; and Ozark Rehabilitation & Health Care Center in Osage, Missouri.
The suit alleges that Petersen Health Care is in default with an outstanding balance of more than $19 million of unpaid Housing and Urban Development loans. Capital Funding, a Maryland-based company, alleges breach of contract and is seeking foreclosure. The loans were set to be paid back Jan. 21, 2024.
Petersen Health Care was founded in 1974 and owns nearly 100 senior living facilities in Illinois, Iowa and Missouri. The company is based in Peoria at 830 W. Trailcreek Drive. Mark Petersen, a native Kewaneean, is listed as CEO.
