Nine more Petersen Health Care facilities are placed into receivership
PEORIA – Nine more financially ailing Petersen Health Care facilities in Illinois have been placed in receivership.
On Thursday afternoon, Judge Thomas Durkin with the U.S. District Court for the Northern District of Illinois, Eastern Division, granted an order for an emergency receivership for nine facilities, including those in Pekin, Canton and East Peoria.
Those facilities are: 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.
In that case, Capital Funding alleges Peoria-based Petersen Health Care owes more than $19 million in unpaid loans.
Creditors are also seeking an emergency receivership for Charleston Rehabilitation & Health Care Center in Charleston and Cumberland Rehab & Health Care Center in Greenup.
X-Caliber Capital alleges Petersen Health Care is in default for more than $5.5 million in loans to the Charleston and Cumberland facilities.
More: Petersen Health Care faces foreclosure on nearly $51 million in loans
According to the emergency motion for appointment of a receiver filed Feb. 6 in the U.S. District Court for the Central District of Illinois Urbana Division, the two facilities need a health care receiver “to protect the health and safety of the patients and residents of the facilities that are being placed in jeopardy by Defendants’ lack of liquidity, Defendants’ failure to maintain insurance, Defendants’ failure to pay provider taxes, Defendant’s failure to pay critical vendors, and Defendants’ use of cash of these facilities to pay debts of their owners’ other facilities.”
The suit provided details about a ransomware attack that targeted Petersen Health Care in the fall of 2023. Access to billing systems was lost at several facilities, and afterward, insurance payments were not made. Insurance was canceled in December 2023, retroactive to January 2023.
In court filings, Petersen Health Care advised X-Caliber that it has limited cash flow and that “while they intend to file for bankruptcy, they are unable to do so because they do not have, and cannot secure, insurance," according to the lawsuit.
Petersen Health Care is also delinquent in paying provider taxes and its accounts payable are “significantly stretched.” A look at the books found “significant co-mingling of funds,” according to filings.
The suit also pointed out that the two facilities are poorly rated on Medicare.gov. Charleston has a one star out of five stars rating for poor health inspection results and below average quality measures. Cumberland scores the same, with an added red flag for complaints of abuse in the facility.
Eight other Petersen Health Care facilities were placed in receivership Jan. 25 because of similar issues. Those facilities are: El Paso Care Center, Flanagan Rehabilitation & Health Care Center, Courtyard Estates of Kewanee, Courtyard Estates of Knoxville, Courtyard Estates of Monmouth, Legacy Estates of Monmouth, Marigold Rehabilitation & Health Care in Galesburg, and Polo Continental Manor. In that case, X-Caliber Funding LLC claims that Petersen Health Care owes more than $31 million.
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 is listed as CEO.
More: Woodford County health care facility with history of issues fined $75,000 for violations
This article originally appeared on Journal Star: Nine Petersen Health Care facilities are placed into receivership
