BIG UPDATE: Another key healthcare chain files Chapter 11 bankruptcy
Many retailers that have gone out of business have their management’s decisions to blame. Companies like Toys R Us and Bed Bath & Beyond took on excessive debt, hampering their ability to invest in effective strategies.
The Reality of Retail Sales
While it’s easy to point fingers at the internet for retail struggles, nearly 85% of retail sales still occur in brick-and-mortar stores. Although Amazon has made significant inroads into physical store sales, many consumers still prefer the in-person shopping experience.
Challenges for Pharmacies
Pharmacies, in particular, are an area where immediate access is often crucial. However, major chains have faced difficulties. Rite Aid has been in Chapter 11 bankruptcy since October, closing nearly 700 locations. CVS and Walgreens have managed to remain solvent but are also shuttering stores.
This struggle can partly be attributed to the Covid pandemic, which prompted population shifts, leaving many pharmacies in underserved areas. For instance, if a consumer used to pick up prescriptions and snacks during lunch breaks but now works remotely, those pharmacies are likely to see diminished foot traffic.
Guardian Pharmacy’s Financial Distress
Adding to the list of troubled healthcare providers, Pennsylvania’s Guardian Pharmacy is now facing its own financial challenges.
Guardian Healthcare, based in Brockway, announced on July 29 that its subsidiary, Guardian Elder Care at Johnstown, LLC, along with 19 affiliated entities, has voluntarily filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Western District of Pennsylvania. This filing pertains to Guardian’s skilled nursing facilities and related pharmacy and rehab services in Pennsylvania and West Virginia. Notably, this case does not involve Atlanta-based Guardian Pharmacy Services, which continues to operate normally.
Significant Debt and Restructuring Plans
Guardian Pharmacy reported both assets and debts ranging from $1 million to $10 million in its Chapter 11 filing. The company has between 1 and 49 creditors and anticipates funds being available for unsecured creditors. Among its debts, Guardian owes nearly $27 million to the Pennsylvania Department of Human Services and over $3.3 million to Highmark Blue Shield.
“First and foremost, the decision to pursue an in-court restructuring was made with our residents’ best interests in mind,” stated Chief Restructuring Officer Allen Wilen of EisnerAmper LLP. “This action provides the relief necessary to enable the Debtors to continue operating with a focus on resident care and safety while the Chapter 11 cases are pending, ensuring the best outcome for all parties involved.”
As of now, no financial plan has been filed as part of Guardian’s Chapter 11 petition.
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