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💥New Chapter 11 BK Filing - SC Healthcare Holding LLC (Petersen Healthcare)💥
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💥New Chapter 11 BK Filing - SC Healthcare Holding LLC (Petersen Healthcare)💥

Will the debtors get a priming lien over HUD loans?

Mar 22, 2024
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PETITION
PETITION
💥New Chapter 11 BK Filing - SC Healthcare Holding LLC (Petersen Healthcare)💥
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On March 21, 2024, IL-based SC Healthcare Holding, LLC and 140 affiliates (collectively, the “debtors,” “the company,” or “Petersen”) filed chapter 11 bankruptcy cases in the District of Delaware (Judge Horan) and, boy oh boy, did the debtors and their various lenders bring the heat. Zoom out and this is yet another “sale case.” Zoom in and this is a case with complex financing issues, complicated in part by the fact that there are US Department of Housing and Urban Development loans (“HUD Loans”) with respect to certain of the debtors’ properties that arguably cannot be primed by a DIP facility. Let’s dig in!

The debtors are one of the largest nursing home operators in the US, with 100 facilities across the Midwest (mostly in Illinois) housing approximately 5340 residents. Founded by brothers James D. Petersen and Robert D. Petersen and now managed by Robert’s son, Mark D. Petersen, the debtors have been family-owned and operated since ‘74. In addition to assisted and supported living, the debtors provide skilled nursing care, respite care, memory care, hospice, local medical transportation, radiology, and pharmacy services for their elderly patients. By the end of ‘23, the debtors produced annual operating revenue of roughly $340mm. 

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