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The current Baby Boomer generation reaching retirement feels younger, will live longer and demands meaningful activities and experiences in a Retirement Home as they leave their careers and active social life behind them. They are still healthy, but their physical stamina has changed and requires some assistance or service. There are currently 78 million Baby Boomers in the U.S. and 8000 turn 65 everyday. They expect better housing and amenities in their first entry into an Assisted Living or Independent Living facility, even though eventually they require the same medical care & services as generations before them.


Owner/operators must meet the demands of this “back to the dorm” crowd and compete for their considerable buying power. Not only do they need to invest in technologies that insure life safety but also in technologies that insure life quality.  These new technologies will emphasize life style and wellness. Owner/operators must adapt also to the current aging generation’s demand for diversity.  When first entering retirement the Boomer generation does not want to co-mingle with just Seniors.  They prefer to live in a community of diverse ages, allowing them to co-mingle with all ages:  youth, middle age, and older. To meet this demand, Community Care Retirement Community Developers are building their Independent Living Facilities and 55+ communities close to developments, which incorporate all ages.

Whether building a new community or adding to an established one, retirement facilities feature

  •         Neighborhoods for 55 plus
  •         Neighborhoods for single families within blocks
  •         Apartment complexes in another sector
  •         Community areas for all ages  (Parks, stores, recreation areas etc.)

Assisted Living and Skilled Nursing facilities are often found in the neighboring location completing the Continuing Care Retirement Community concept.


Purchasing a troubled facility that has declared Bankruptcy in Chapter 11 creates an opportunity for the owner to restructure the facility to meet the new demands of the culture and the demands of the emerging Boomer generation. Improving the physical plant, adding amenities, services and new technology must be addressed in the restructure with emphasis on life style and wellness.

For counsel, acquisition or disposition of a Healthcare Facility you please contact Shep Roylance of JCH Consulting Group and Roylance Senior Housing, whose expertise and knowledge will guide you through a successful transaction in or out of Bankruptcy.

Shep Roylance –  Roylance Senior Housing, JCH Consulting Group    
Direct 805-633-4649      Cell 818 515-0530         Fax 805 392-5171       Email Shepshep@shepjch.cch

3 Main Reasons Why Skilled Nursing Homes File Chapter 11 Bankruptcy

When Nursing Homes File Chapter 11 Bankruptcy

There are three primary reasons a skilled nursing home ends up filing for Chapter 11 Bankruptcy. Although not the most ideal situation for the owners, the employees, and their patients, stringent federal and state requirements, fines, and lawsuits are hampering facilities’ ability to yield a profitable nursing home that can still afford skilled staffing needed for quality care.

Strict Federal and State Requirements

New guidelines enforced by the government are requiring skilled nursing homes to make mandatory regulation investments. These investments include updated training or new certifications for direct aides and staff. Direct aides are required to meet minimum educational hour regulations. Staff member requirements have been elevated as well. Failure to adhere to these regulations results in significant fines and fees.

Lawsuits and Claims

We recently reported on 19 skilled nursing facilities that filed Chapter 11 in California. Country Villa Service Corp’s claimed a need to file Chapter 11 on individual assets in order to seek protection from a number of class action lawsuits filed against them. The lawsuits range from poor quality care of their patients to medication misuse and missing wages and hours for employees.

Filing Chapter 11 on these specific locations freezes their assets, making them unavailable to the plaintiffs should they win their cases and staves off creditors temporarily. It does not, however, affect all of Country Villa Service Corp’s operational facilities. CEO Stephen Reissman claimed in his telephone interview that the bankruptcy won’t affect operations or treatment of patients at the company’s nursing homes in question, either.

Medicare Withholdings and Fines from CMS

Smaller nursing home corporations financially unable to separate their operational holdings from their business holdings are in a more precarious situation should lawsuits or fines arise. According to official reports, Medicare spent almost $32 billion on skilled nursing facilities in 2011 through their Nursing Home Quality Control Program. With the sequestration resulting from budget cuts in FY2013, many nursing homes are claiming they still haven’t received payments from the Centers for Medicare & Medicaid Services (CMS) as required. Coupling that with what some nursing home owners are claiming that they have received erroneous fines from CMS, and as a result they are forced to declare bankruptcy.

In Iowa, All-American Care owner, Jerry Rhoades, claims his locally-owned operation has to file bankruptcy in part because of all the fee injunctions CMS placed upon his business. CMS’s audits of the company yielded these results and fines nearing $100,000. Rhoades claims the fees have crippled their business and Chapter 11 was the only way out.

If you are considering filing Chapter 11 Bankruptcy, there may be other options available to you. Talk to a knowledgeable skilled nursing brokerage about these options. A reputable brokerage will have a large pool of qualified buyers and participants either in a 1031 Exchange, straight sale or sale and leaseback transaction. Check back frequently for more information on this, and related, subjects.