LifeCare 2.0, LLC and two affiliates filed Chapter 11 on September 15, 2026, seeking to preserve their remaining Texas hospital business after judgment enforcement froze operating accounts. Manager David LeBlanc says the resulting payroll shortfall forced the transfer of inpatients to another hospital. Management proposes refinancing or recapitalization, potentially involving a sale or relocation, to support a restart. The reviewed evidence does not establish committed financing or an approved transaction. Petition, p. 1; LeBlanc declaration, pp. 12–17.
The immediate problem has two parts: access to operating cash and permission to admit patients. Alongside the account freeze, a state-court injunction barred new admissions at the Carrollton facility. LeBlanc also reports that the landlord, HTA-Dallas SS Hospital, LLC, terminated the lease. Management said resumption depended on funding payroll and resolving the admissions restriction. LeBlanc declaration, pp. 13–14, 17.
This account focuses on the filing and first-day proceedings, using an evidence cutoff of October 2, 2026.
U.S. Bankruptcy Court for the Northern District of Texas, Fort Worth Division
Lead Case Number
26-44110-elm11
Petition Date
September 15, 2026
Case Snapshot
The petition records the September 15 filing date. The court ordered joint administration of the three debtors’ cases on September 18. Joint administration is procedural and does not establish substantive consolidation. Petition, p. 1; LeBlanc declaration, pp. 1–2; Joint-administration order.
Judgment enforcement forced inpatient transfers
According to LeBlanc’s declaration, MPT obtained a January 16, 2025 judgment against LifeCare 2.0 and LifeCare 2.1 for $5,008,300.29, with post-judgment interest at 18% annually, plus costs and attorneys’ fees. He reports that a receiver was appointed and an August 2026 garnishment and turnover order froze bank accounts. These are management’s accounts of the state-court events. LeBlanc declaration, pp. 12–13.
Unable to fund September 11 payroll, management transferred inpatients to an unrelated hospital on September 11–12. The declaration describes inpatient care as temporarily ceased, while limited outpatient wound-care services continued. The reviewed evidence does not establish that inpatient operations subsequently resumed. LeBlanc declaration, pp. 13–14, 17.
Lease termination and admissions restrictions complicate a restart
LeBlanc reports that HTA terminated the Carrollton lease effective May 5, 2026. His declaration also reports that a September 2 temporary injunction prohibited new patient admissions at the facility. Management said it needed to fund payroll and resolve the admissions restriction before resuming inpatient care. LeBlanc declaration, pp. 13–14, 17.
HTA filed objections to first-day relief and a supporting declaration. The frozen evidence establishes those filings but does not verify their substantive allegations or establish their merits. HTA objection; HTA supporting declaration.
On September 18, the bankruptcy court permitted continued cash management, use of bank accounts and intercompany transactions. Management’s separate account of the admissions restriction leaves the operating restart unresolved in the reviewed evidence. Cash-management order; LeBlanc declaration, pp. 13–14, 17.
LeBlanc reports approximately $10,437,065.94 owed to the Centers for Medicare & Medicaid Services as of August 31, 2026, identifying CMS as the debtors’ largest unsecured creditor. The reported obligation comprises cost-report settlement balances and a revised 2020 cost report. These figures describe management’s reported obligations for the debtors collectively; they are not the lead debtor’s scheduled liabilities or a total consolidated debt figure. LeBlanc declaration, pp. 15–16.
Management reports approximately $415,000 in monthly CMS repayment obligations against approximately $484,000 in monthly Medicare Periodic Interim Payment receipts. Both amounts are management’s reported monthly estimates. LeBlanc declaration, pp. 15–16.
Management proposes financing, a sale or relocation
The present enterprise acquired hospital assets through the predecessor LifeCare bankruptcy in 2019 and later consolidated to one Carrollton facility housing a 40-bed long-term acute care hospital and an outpatient wound center. This Chapter 11 concerns the acquiring LifeCare entities and is separate from Hospital Acquisition LLC’s 2019 Delaware case. LeBlanc declaration, pp. 5–8.
Management’s proposed path is refinancing or recapitalization, potentially involving a sale or relocation into a “hospital-in-a-hospital” arrangement. These are stated objectives. The reviewed evidence does not establish a specific debtor-in-possession financing facility, lender commitment, approved sale timetable or completed relocation. LeBlanc declaration, pp. 11, 17.
The court appointed Omni Agent Solutions as claims agent on September 18. It also extended the deadline for schedules and statements to October 20, 2026. The extension order permits a further extension by written agreement with the U.S. Trustee and docketed notice. Omni appointment order; Schedules-extension order, pp. 1–2.
A separate September 18 order scheduled an October 19, 2026 hearing at 9:30 a.m. to determine whether a patient care ombudsman should be appointed. The order schedules that decision; it does not appoint an ombudsman. Management’s remaining operating objective is to fund payroll and resolve the admissions restriction while pursuing financing or restructuring options. Patient-care ombudsman order, p. 1; LeBlanc declaration, pp. 14, 17.
Sources
Petition, p. 1 /documents/2f2af70e-e5cc-4271-b695-84a25bb303e9/
LeBlanc declaration, pp. 12–17 /documents/43586a83-d184-42f8-8568-34b3f328dd01/
Joint-administration order /documents/871b9672-f59c-42a3-983b-de8027274f00/
Cash-management order /documents/9c77d8cf-db0a-4711-a678-497199187eea/
Omni appointment order /documents/a6e71c54-beac-4fc6-b598-c830d300d2da/
Schedules-extension order, pp. 1–2 /documents/6a398704-e093-4d6c-8eb7-e8075821fc46/
Patient-care ombudsman order, p. 1 /documents/e565f46b-8517-48db-9a85-d09ec5486e88/
This article was researched and written with AI assistance, using court filings, public records, and news sources. AI-generated content can contain errors. Verify all information against primary sources before relying on it. This is not legal or financial advice. See the disclaimer.