Genesis Healthcare Approved to Restart Auction With New Lead Bid

Genesis Healthcare Inc. won bankruptcy court approval for a new bidder making what it says is a nearly $1 billion offer to lead a revamped sale process for the company’s sprawling nursing-home empire.

Genie 3 Partners LLC’s proposal for Genesis’ business, which includes $259 million in cash and replaces a previous insider bid, was approved by Judge Stacey Jernigan at a hearing Wednesday in the US Bankruptcy Court for the Northern District of Texas.

Genie 3 is a joint partnership between a business associated with nursing home executive Jacob Sod and his firm Milrose Capital LLC and health-care investment and management firm Integro Asset Management LLC, which does business as Integro Healthcare Services and is headed by Rowan Farber, according to court papers.

Jernigan also approved bid protections for Genie 3, including a $10 million break-up fee and up to $1 million for expenses, after expressing doubt about such fees last month. The judge noted that Genie 3 had warned that without the protections, it wouldn’t participate in the renewed sale process.

“Right or wrong, they felt like the process wasn’t fair the first time around,” Jernigan said.

Her ruling comes about a month after she stopped the prior proposal to sell the business to insider affiliates.

In addition to the cash, Genie 3’s bid includes a $100 million unsecured promissory note that would be paid over four years with 3% interest, according to court records. It would also pick up hundreds of millions of dollars in liabilities, including up to $90 million in secured claims from the IRS, up to $38 million in employee paid time off, and up to $91 million in unpaid payroll and self-insured medical claims.

Genesis attorney Dan Simon of McDermott Will & Schulte LLP said Genie 3 is raising cash from MonticelloAM LLC, which lends cash on deals related to assisted living facilities, memory care facilities, and skilled nursing facilities, according to court papers.

Competing bids are due Jan. 9. An auction would start on Jan. 13 if there are competing offers.

Genesis’ prior selection of an insider-affiliated entity to acquire its assets had come under attack by creditors challenging the proposed buyer’s secured debt.

Democratic lawmakers called on the court to appoint an independent examiner to investigate the proposed sale to an insider. The Justice Department’s bankruptcy monitor, the US Trustee’s office, has also moved to appoint an independent Chapter 11 trustee in the bankruptcy.

When Jernigan rejected the prior lead bid in December, she said she couldn’t sign off on liability releases for health-care entrepreneur Joel Landau, co-founder of Pinta Capital Partners, who was behind the initial proposed sale of the business to affiliate CPE 88988 LLC. Pinta’s role as an existing investor in Genesis prompted allegations that the deal would’ve constituted an insider transaction.

Genesis, which runs 175 facilities in the US, filed Chapter 11 in July. It blamed its troubles on rising labor costs and other operating expenses following the Covid-19 pandemic.

Genie 3 is represented by Baker & Hostetler LLP.

The case is Genesis Healthcare Inc., Bankr. N.D. Tex., No. 25-80185, hearing 1/7/26.