At the February Homeowners Association meeting for Courtyard Village, a representative from Petersen Health Care provided the villa owners with a six-page handout intended to provide information and answer any questions residents may have after facilities owned by Petersen were placed in court-ordered receivership. Among the question and answer portion of the handout was an item about the possibility of Petersen Health Care declaring bankruptcy.
Petersen Health Care administers the HOA of the villas, a campus of 24 homes located off Page Street. In return for a HOA fee, Petersen provides services to the property owners such as snow removal and landscaping services. Villa owners are also given access to other facility amenities such as wellness programs, beauty shop access and meal plans.
In January, eight facilities owned by Petersen Health Care, including Kewanee Courtyard Estates, were placed into receivership by the U.S. District Court in Rockford. At that time of the HOA meeting, Petersen was reporting that 17 of their facilities were in receivership under the management of the Tutera Group. The number of facilities in receivership has risen to 19 according to other media reports.
Recently, Bloomberg news, citing anonymous sources, reported that the Peoria-based company is preparing to file for Chapter 11 bankruptcy. That claim has not been verified by other media outlets and Petersen has directed media questions about the claim to a news report from McKnights Long-Term Care News.
In the McKnights article, Petersen confirmed that it had no intention of going out of business. The McKnights article reads, “Some type of restructuring will be necessary to adapt to financial pressures. . . but Petersen has every intention of remaining a provider of care in the communities it currently serves in Illinois, Iowa and Missouri.”
What that structuring may look like could include Chapter 11 bankruptcy, according to the handout provided to villa homeowners. “As the company works with its lenders, Petersen is exploring all options to find a financial path forward for the company. Any bankruptcy filing would be used as a financial tool to restructure the company, positioning it better for long-term success,” the handout reads.
The handout also listed key messages for the homeowners that included how Petersen came to find itself in the position, citing COVID-19 pandemic and the economic downturn it generated as well as a major cyber attack the company experienced several months ago.
In the handout, Petersen outlined decisions by “more aggressive lenders” that led to the receivership of the 17 facilities, “where they have effectively taken possession of the property and business operations.”
The handout defined more clearly what receivership meant for the company as a “court-appointed tool” initiated by lenders that can help companies avoid further financial challenges as a step in a restructuring process to return a company to financial stability.” Also stressed in the information provided to the HOA members was the fact that Petersen still owns the businesses and the service contracts and that employees at the facilities still have their jobs.
The handout also pointed out a “silver lining” in that the job of the Tutera Group is to assess the operations of the facilities and continue to operate them as effectively as possible with minimal impact on staff and residents.
Changes made by Tutera Group will include back-office functions such as payroll, payment processing, billing and vendor relationships.
Villa homeowners were also provided with a list of facilities in receivership that included Courtyard Estates in Kewanee, as well as facilities in Monmouth, Galesburg, East Peoria, Bloomington, Pekin, Canton, Osage Beach, Pittsfield, Knoxville and Bloomington.
For the residents of the villas and other facilities, the handout stated that there will be no changes as they “continue to work with our lenders to find a financial path forward for our company.”
Questions by homeowners were directed to the facility administrator or director of assisted living.
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. In total, two creditors claim that Petersen owes them over $55 million.
