New PESP research analyzes Genesis Healthcare bankruptcy

 Highlights broader bankruptcy risks from private equity

The Private Equity Stakeholder Project (PESP) reaffirmed its commitment to closely monitoring the Chapter 11 bankruptcy of Genesis Healthcare, one of the nation’s largest skilled nursing operators. A research update published August 11 examines how the company’s collapse reflects a recurring pattern of financial fragility tied to private equity ownership (pestakeholder.org).

PESP’s latest analysis also shows that Genesis is not alone—70 percent of large U.S. bankruptcies in Q1 2025 were tied to private equity-backed companies, despite such firms comprising just 6.5 percent of the U.S. economy (pestakeholder.org). Healthcare has been particularly hard hit, with private equity involved in more than half of large healthcare bankruptcies in 2024.

“Genesis Healthcare’s bankruptcy was a predictable result of a financial strategy that extracted value through debt and real estate transactions while leaving the company with fewer resources to sustain care,” said Michael Fenne, Senior Research Coordinator at PESP. “Unless these tactics are addressed directly, more nursing home operators may follow the same path and leave more patients, workers, and public programs to absorb the costs.”

PESP’s ongoing analysis of the Genesis case highlights:

• Massive debt burden—liabilities estimated between $1 billion and $10 billion—driven in part by leveraged buyouts, sale-leasebacks, and high-risk borrowing.

• Industry-wide pattern—private equity firms were behind 7 of the 8 largest healthcare-related bankruptcies in 2024.

• Policy relevance—Genesis exemplifies how private equity’s business model can weaken critical healthcare providers.
  

PESP stands ready to provide context, data, and expert commentary to those covering the Genesis bankruptcy and the growing trend of private equity-driven healthcare failures.