Central PA healthcare company files for Chapter 11 bankruptcy

BROCKWAY, Pa. (WTAJ) — A Central Pennsylvania healthcare company has filed for Chapter 11 bankruptcy, citing inflation, costs, and labor over the past few years.

Guardian Healthcare, based out of Brockway announced Monday that Guardian Elder Care at Johnstown, LLC, doing business as Richland Healthcare and Rehabilitation Center, along with 19 affiliated entities (Debtors) voluntarily filed Chapter 11 bankruptcy in the United States Bankruptcy Court for the Western District of Pennsylvania. The debtors include Guardian Healthcare’s skilled nursing facilities and related pharmacy and rehab businesses in Pennsylvania and West Virginia.

Locations in Central Pennsylvania:

• Guardian Elder Care at Hastings, LLC d/b/a Haida Healthcare and Rehabilitation Center, 397 3rd Avenue, Hastings, PA 16646
• Guardian Elder Care at Johnstown, LLC d/b/a Richland Healthcare and Rehabilitation Center, 349 Vo Tech Drive, Johnstown, PA 15904
• Guardian Elder Care at Brockway, LLC d/b/a Highland View Healthcare and Rehabilitation Center, 90 Main Street, Brockway, PA 15824

You can find the list of their full locations here .

Officials with Guardian said the action was taken to ensure continued services for its residents and preserve critical healthcare jobs.

All Guardian Healthcare facilities are operating as normal, they added.

“First and foremost, the decision to pursue an in-court restructuring was made with our residents’ best interests in mind,” Chief Restructuring Officer Allen Wilen of EisnerAmper LLP, said. “Today’s action provides the relief necessary to enable the Debtors to continue operating with an ongoing focus on resident care and safety while the Chapter 11 cases are pending and to ensure the best outcome for the Debtors, their estates, their creditors, and all other parties in interest.”

The company said strong industry headwinds in recent years caused major financial challenges in the skilled nursing industry. Factors include the lingering effects of the COVID-19 pandemic, labor shortages, rising wages, staffing ratios and increased reliance on high-cost agency labor, they added.

Guardian Healthcare said they took steps to restore financial stability, however, rapidly increasing inflation and labor costs hindered the ability to successfully restructure. The company said they negotiated for over a year with key stakeholders, but it did not result in sufficient financial relief and Chapter 11 became the best option for the company.

“Skilled nursing providers in Pennsylvania are facing a crisis in the current environment. Guardian Healthcare attempted to do everything possible to overcome this crisis. Despite these efforts and faced with the industry environment in Pennsylvania, Guardian’s current situation is unsustainable.”

Michael Herald, President & CEO of Guardian Healthcare

Guardian Healthcare has received commitments for debtor-in-possession (“DIP”) financing. Following court approval, the DIP financing and cash generated from the Company’s ongoing operations are expected to support the Debtors during the court-supervised process.

“We are committed to working with all parties to pursue prompt divestitures and transfers of operations and a positive resolution during the court-supervised process,” Herald added. “Delivering quality resident care remains our top priority, and we appreciate the unwavering commitment of all Guardian Healthcare employees to continue delivering that level of care.”

As part of its court-supervised process, Guardian anticipates seeking Bankruptcy Court approval for the sale of eight of its owned skilled nursing facilities.

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Guardian is also pursuing a transaction to effectuate the transfer of operations of its leased skilled nursing facilities to a new operator. This transaction, once finalized, will also be subject to Bankruptcy Court approval.

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