After filing for bankruptcy in July, Kennett Square, Pa.-based Genesis Healthcare may be cleared of nearly all financial liability tied to $58 million in settlement agreements with residents and their families over alleged negligent care.
Genesis is one of 11 large nursing home industry bankruptcies filed in 2025, according to a Dec. 9 report from KFF Health News.
Under bankruptcy rules, Genesis’ $709 million in secured debt owed to lenders and the IRS takes precedence over $1.6 billion in unsecured debt the company owes, which legal settlements are part of.
According to court records and financial statements reviewed by KFF Health News, Genesis entered into settlement agreements with provisions that allowed the company to defer payment for a year or more, despite being aware that insolvency was possible.
Of the 155 settlement agreements reviewed by KFF Health News, Genesis has not made any payments toward 85 cases and has made partial payments toward 70. The company still owes $41 million of the $58 million it previously agreed to pay, the report said.
Genesis’ footprint extends across 165 nursing homes, 10 assisted living facilities in 18 states. In the past three years, CMS has fined the company $10 million for violating federal health standards, according to the report.
“Genesis Healthcare, Inc. evaluated and deployed multiple strategic initiatives to improve our financial position prior to determining it was necessary to file for Chapter 11 protections as a last resort,” a spokeperson from the company shared with Becker’s. “Until the Board of Directors approved filing for Chapter 11 protections on July 9, 2025, we had no choice but to continue operating in the ordinary course to provide services to the thousands of residents that depend on our ongoing operations. We sought structured settlements when we did not have sufficient liquidity to pay settlements in lump sums, which is common in circumstances where companies have limited liquidity.”
Read the full KFF Health News report here.
Editor’s note: This article was updated on Dec. 17 at 2:35 pm CT to include Genesis’ statement.
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