Pottsville Operations, LLC and ten affiliated entities filed for Chapter 11 protection on October 15, 2024, in the U.S. Bankruptcy Court for the Western District of Pennsylvania (Case No. 24-70418-JAD), followed by ten secondary debtor petitions on November 18, 2024, for a total of 21 jointly administered debtors. The debtors operated six skilled nursing facilities across Pennsylvania with 925 total beds and 759 residents at filing. The bankruptcy followed systemic financial pressures including COVID-19 pandemic effects on census, labor shortages and wage inflation driving reliance on overtime and staffing agencies, insufficient Medicaid reimbursement rates, and rent arrears exceeding one year. The debtors carried approximately $49.4 million in secured debt to Oxford Finance LLC and $281,000 to Eden Senior Care LLC, plus approximately $56.5 million in unsecured debt and $16 million in estimated nursing facility assessment claims. A DIP facility of $7.782 million at 12.5% interest provided liquidity for operations. Following an accelerated 363 sale process, substantially all assets were sold to a consortium of SNF Realty entities for $63 million, with the sale closing effective February 1, 2025. The Official Committee of Unsecured Creditors proposed a Second Amended Plan of Liquidation establishing a Pottsville Liquidating Trust to pursue remaining claims and distribute net proceeds. Recovery for general unsecured creditors is unknown pending plan confirmation.
