Genesis Plan to Sell

A bankruptcy judge has approved Genesis Healthcare’s sale plan, which designates an affiliate of its controlling owner as the lead bidder and authorizes a $30 million debtor-in-possession loan from key landlords and private equity partners.

The decision provides Genesis with immediate access to the funds needed to stabilize operations. Still, it has drawn criticism from creditors and patient advocates who argue that the process gives insiders an unfair advantage, places liens on litigation proceeds, and may limit recoveries for hundreds of patients with injury or negligence claims.

Critics also warn that allowing insider lenders to credit-bid could discourage outside bidders, narrowing competition in the sale process. The controversy underscores broader concerns about private equity’s influence in the nursing home sector, as Genesis’s bankruptcy has been linked to years of debt-heavy leveraged buyouts and sale-leaseback arrangements that stripped assets, added long-term costs, and weakened its ability to invest in quality care.