Stinson Secures $1 Billion Credit Recovery in Genesis Healthcare Chapter 11 Bankruptcy Case

10.15.2026

On October 14, 2026, the U.S. Bankruptcy Court for the Northern District of Texas, confirmed the Chapter 11 liquidation plan of Genesis Healthcare, Inc., approving a sale of the company under which the bankruptcy estate will recover $1 billion. The sale transaction closed the same day, paving the way for creditors to receive a substantial recovery on their claims. Stinson LLP represented the Official Committee of Unsecured Creditors in the case and was part of the team that led the sale and settlement process that culminated in confirmation of the plan, which was accepted by 98% of unsecured creditors.

Genesis, which operated 175 skilled nursing facilities in 18 states, filed for bankruptcy for its 299 debtor affiliates in July 2025. The debtors originally sought to sell their facilities to an insider for an amount that would leave unsecured creditors with no recovery on more than $1.3 billion in claim. After the Committee challenged that sale, U.S. Bankruptcy Judge Stacey G. Jernigan re-opened, and West State Street, an affiliate of NewGen, emerged as the winning bidder with a $1 billion bid.

In September 2026, the court approved a settlement among Genesis, its secured creditors and its controlling investors that brought an additional $150 million in payments to the estate and eliminated nearly $430 million in secured and unsecured claims.

“From the outset, the Committee’s goal was to ensure a fair and competitive process that maximized value for unsecured creditors,” Stinson Partner Nick Zluticky said. “Reopening the sale process and reaching a consensual plan with the support of all constituents delivered a monumental recovery for creditors, and we are pleased with the result.”

Stinson represented the Committee as co-counsel with Proskauer Rose LLP. The Stinson team, led by Partners Nick Zluticky and Zach Hemenway, included Partner Courtney Harrison and Associate Miranda Swift.