Genesis Healthcare Inc. is asking a Texas bankruptcy court for emergency authorization to pay multiple extension fees to keep alive its option to purchase ten healthcare facilities for approximately $172 million, as the company works to align the transaction with its broader asset sale process.
The healthcare operator, which filed for Chapter 11 bankruptcy protection in July, filed an emergency motion on September 3, 2025, in the U.S. Bankruptcy Court for the Northern District of Texas, Dallas Division, seeking approval to pay $250,000 extension deposits to extend its October 5, 2025 deadline to close on facilities it currently leases from NextGen Realty Holdings LLC.
Genesis exercised its purchase option on July 7, 2025, just two days before filing for bankruptcy, depositing the required $1.5 million with a title company. The facilities, which generate approximately $168 million in annual revenue, are owned through a joint venture in which Genesis holds a 46% minority stake while NextGen holds the majority interest.
"The Debtors believe that the value of the Facilities exceeds the amount of the Purchase Price," Genesis stated in court filings. "Further, by acquiring the Facilities, the Debtors will avoid the value-leakage associated with paying ongoing rent to the NextGen Landlord (of which the Debtors only own 46%)."
The purchase option stems from a 2019 agreement that granted Genesis the exclusive right to buy the facilities during the fifth, sixth, and seventh years of their joint venture term. The company argues the agreement permits unlimited 30-day extensions as long as it provides written notice and pays the extension deposit before each deadline expires.
However, the transaction faces opposition from NextGen, despite Genesis winning an arbitration ruling in December 2024 that declared the purchase option valid and enforceable. "Notwithstanding this arbitration award, NextGen has informed the Debtors that they are contesting the exercise of the Purchase Option," the filing states.
Genesis contends that the contract language supporting multiple extensions is "unambiguous," pointing to the phrase "then current Outside Date" as evidence that multiple extensions were contemplated. Under New York law, which governs the agreement, courts must "give effect to the intention of the parties as expressed in the unequivocal language they have employed," the company argued.
The timing pressure stems from Genesis's broader asset sale process, which won't conclude until later in 2025. The court approved bidding procedures in August, with CPE 88988 LLC selected as the stalking horse bidder. The stalking horse agreement contemplates that the winning bidder will receive Genesis's interests in the NextGen joint venture and be assigned all rights under the purchase option agreement.
"The timeline for the Sale Process set forth in the Bidding Procedures Order does not contemplate an auction or a sale hearing until mid-November 2025," Genesis noted, with the final transaction closing likely delayed until 2026 due to regulatory approval requirements.
Genesis warns that failing to secure the extension authorization could force amendments to its stalking horse agreement and potentially reduce the consideration received by its bankruptcy estate. The ten facilities subject to the purchase option are located across multiple states and operate as skilled nursing, assisted living, and continuing care retirement communities.
The case is being heard in the U.S. Bankruptcy Court for the Northern District of Texas, Dallas Division, under case number 25-80185 (SGJ). Genesis is represented by McDermott Will & Schulte LLP, with Marcus A. Helt and Jack G. Haake serving as local counsel and Daniel M. Simon leading the Chicago-based team.
A hearing on the emergency motion is scheduled for September 24, 2025, at 9:30 a.m. CT. Genesis filed for bankruptcy with 299 affiliated entities, making it one of the larger healthcare bankruptcies in recent years.
This article was prepared using Stretto Conductor, our new AI-powered assistant that's here to help. Stretto Conductor was able to create this summary of a 63 page court filing in less than a minute. Always review the underlying docket filings for accurate information. The information and responses generated by Stretto Conductor may contain errors or inaccuracies and should not be relied upon as a substitute for professional or legal advice.