By Ben Shimkus,Editor

Copyright dailymail

Panic as nursing home is abruptly shut amid bankruptcy… sparking fears all 175 locations dotted across 17 states

READ MORE: Lowe’s rival files for bankruptcy as problems for retailers stack up

By BEN SHIMKUS, US CONSUMER REPORTER

Published: 23:59 BST, 21 September 2025 | Updated: 02:16 BST, 22 September 2025

Federal and state regulators have taken the rare step of shutting down a nursing home.

An estimated 100 patients are currently being moved out of Magnolia Ridge, a 148-bed facility in Glendale, Alabama, before the facility’s October 15 closure.

Shutting down a nursing home is highly unusual. Regulators often go out of their way to keep facilities open, sometimes even sending emergency funding to shore up struggling operators.

But the Centers for Medicare and Medicare Services, or CMS, had warned as early as March that it would move to shut Magnolia Ridge down, US government lawyer Zachary Simple told The Wall Street Journal.

It comes as healthcare facilities across America are reporting financial strain.

Several hospitals have filed for bankruptcy, following higher costs for care, mounting debt, or private equity divestment.

Magnolia Ridge’s closure follows a July bankruptcy declaration from its parent company, Genesis Healthcare.

The company, America’s third-largest skilled nursing facility, brings in $2.3billion in patient revenue each year. At its peak in 2016, the company kept expanding, with n 60,000 licensed beds in over 30 states.

Genesis, America’s third-largest nursing home facility by revenue, has been in bankruptcy court since July. The company said it wouldn’t shut any facilities, but regulators are forcing an Alabama site to close

Now, the company has a reported 20,000 licensed beds.

In bankruptcy court, the company said it was weighed down by mounting lawsuits over alleged negligence and wrongful deaths that cost about $8million each month.

Louis Robichaux IV, a co-chief restructuring officer said the company has been ‘mired in corporate inefficiencies,’ including its previous expansion efforts in the US.

‘It became clear that, without a more holistic solution, the company would be unable to continue delivering high quality care and appropriately invest in its facilities and equipment,’ he said.

During the bankruptcy filing, the company’s COO said Genesis didn’t ‘expect any impact to resident care or staffing,’ including its 175 facilities across 18 states.

While the Alabama closure is not directly tied to the bankruptcy, Genesis said it won’t fight back on the decision.

On Monday, Genesis’s lawyer, Dan Simon, told a Dallas bankruptcy court that the company doesn’t ‘want to pick a fight with our regulators,’ even as it plans to appeal.

Bankruptcy Judge Stacey Jernigan questioned regulators’ decision to close the Alabama site after a patient-care watchdog gave the facility a satisfactory grade.

Magnolia Ridge has faced a wave of criticism, including from federal regulators that gave the facility a one-star rating several years in a row

Warning as more than 300 US hospitals at risk of closure – check if your nearest is in danger

But lawyers for hundreds of residents with injury claims pushed back, pointing to a long trail of warnings.

From 2017 to 2024, CMS gave Magnolia Ridge a one-star rating out of five.

‘Magnolia Ridge is firmly committed to providing our residents with quality skilled nursing care, and working collaboratively with state and federal agencies is an essential component of that commitment,’ the company told the Daily Mail.

‘While we work through this, residents are continuing to receive quality care from our staff.’

Genesis’ troubles are not a singular event.

In January, Prospect Medical Holdings — which also owns 166 clinics across California, Connecticut, Pennsylvania, and Rhode Island, and employs 12,600 people — filed for Chapter 11 protection.

The bankruptcy declaration shut down two hospitals in Pennsylvania.

In May 2024, Steward Health Care System, which cared for two million patients from 31 hospitals, also filed for bankruptcy.

Share or comment on this article:
Panic as nursing home is abruptly shut amid bankruptcy… sparking fears all 175 locations dotted across 17 states

Add comment