Christian Horizons has filed for Chapter 11 bankruptcy after facing operational pressure related to declines in new resident volume, staffing shortages and cost increases.

The St. Louis-based organization this week announced its plans to file for bankruptcy and undergo a restructuring. The nonprofit has 12 communities with independent living, assisted living and memory care services, along with long-term healthcare centers and short-term rehabilitation. Its footprint spans the midwestern states of Illinois, Indiana, Missouri and Iowa.

The organization has about $75 million in outstanding debt, according to a court document associated with its bankruptcy filing. The organization is working with legal advisors Dentons U.S. and Summers Compton Wells, while Ziegler is its investment bank and Healthcare Management Partners is its chief restructuring officer.

Christian Horizons CEO Kate Bertram told Senior Housing News the organization is continuing to provide care for residents through its full slate of services, along with securing debtor-in-possession financing related to the bankruptcy.

“Our residents will continue to live and be served in our communities,” Bertram told SHN. “We will continue to welcome older adults into our communities.”

The organization said its bankruptcy filing is related to events that ultimately stemmed from the Covid-19 pandemic. The organization lost between about a quarter and a third of its new residents and short-term rehabilitation patients in the early months of the Covid-19 due to shelter-in-place policies and struggled to recover, according to a press release.

Worker shortages in the operator’s rural communities led to bringing in personnel from staffing agencies in order to meet staffing ratio requirements.

All of that led to higher operational costs for the organization. In general, the organization said the cost of providing care to residents rose 10% and 30%.

During the bankruptcy process, Bertram said Christian Horizons isn’t asking any current residents to relocate.

Bertram added she is committed to remaining as CEO throughout the process to “ensure that our communities are providing care and services and that transitions of communities are being ushered through.”

While there is no immediate timeline due to the courts needing to approve of a sale motion, Bertram said the process could be completed in around six months.