A federal bankruptcy judge in Delaware gave approval Thursday to Petersen Health Care's deals with Delaware and Illinois based LLCs to sell many of the company's properties as part of an $118 million sale.
Judge Thomas Horan signed an order approving Peoria-based Petersen's deals with Petersen Acquisition LLC, based in Wilmington, Delaware and HP Developers LLC, based in Illinois to sell 78 facilities across the state.
Horan said in his order that the sale was in the best interests of the company's debtors, saying that they had sufficient justification for the move and that it would be the best way to maximize the value of their estates.
In addition, the judge said that the offer provided by the LLCs and the banks was the highest and best offer for the assets, negotiated in a way that constituted good faith without collusion. Horan said that a "full, fair, and reasonable opportunity" was provided for another bidder to provide a better offer, but none ended up coming before an auction on July 3.
In total, 75 properties would be sold to the Delaware-based LLC for around $98 million, including ones in Kewanee, Farmington, Havana, Toulon, Knoxville and Monmouth, among others.
Three properties in Canton, Monmouth and Sullivan were bought by HP Developers for $14 million.
In addition to the two LLCs, Farmington Bank bid on a facility in its city for $3 million, and Hickory River bid on a Girard facility for $2 million. A hearing had been scheduled for Friday at 10 a.m. to approve those, but it was postponed to a later date.
The Delaware LLC had been identified as a "stalking-horse" bidder in June, with the other buyers being identified following a July 3 auction.
Petersen filed for Chapter 11 bankruptcy in March, citing $290 million in unpaid debts and liquidity issues from downward trends in the health care field, the impacts of the COVID-19 pandemic – including inflation – and an inability to retain staffers. The company was also struggling through a recovery from an October 2023 data breach that led many internal records to be lost.
Company attorneys felt that they could get around $300 million for the assets at the high end, and those objecting to the sale prior to the order felt that they didn't get that sort of value out of the sale.
One objector, GMF Petersen Note LLC, claimed that the company didn't provide enough time during the sale process to consider all bids for the company. Another objector, X-Caliber Funding LLC, said that the sale went against an agreement the two sides reached in May to notify them if a deal was finalized.
Nine X-Caliber properties included in the original sale agreement were excluded from the overall sale, lowering the total purchase price by $18 million. Two of those properties, in Charleston and Greenup, were placed in receivership in February along with 17 others owned by Petersen and X-Caliber.
Petersen did not respond to the Journal Star's request for comment.
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