Petersen Health Care, an Illinois-based healthcare provider renowned for its extensive network of nursing homes, filed for bankruptcy following a cyberattack that compromised its systems and resulted in defaults on government-backed loans. The company’s staggering $295 million debt burden, including $45 million owed under healthcare facility loans insured by the U.S. Department of Housing and Urban Development, prompted the decision to seek Chapter 11 protection in a Delaware bankruptcy court. The cyberattack, attributed to the Cactus ransomware gang, not only disrupted Petersen Health Care’s digital infrastructure but also led to the exposure of sensitive information, including leaked documents as proof of claims by the attackers.
The fallout from the cyberattack and loan defaults exacerbated pre-existing challenges faced by Petersen Health Care, including declining demand for nursing homes in rural areas, staffing shortages exacerbated by the COVID-19 pandemic, and unresolved Medicaid reimbursement issues in Illinois. Lenders took action following the loan defaults, placing some properties into receivership, which further disrupted the company’s operations. Despite these challenges, Petersen Health Care expressed its commitment to maintaining continuity of operations during the bankruptcy proceedings and outlined plans to restructure debts for a more sustainable future. Chief Restructuring Officer David Campbell emphasized the company’s determination to emerge from restructuring as a resilient entity, poised to continue providing quality care services and serving as a reliable employer for its staff.
