Senior Living Nonprofit Lutheran Life Files For Ch. 11 Bankruptcy

Continuing care retirement community (CCRC) operator Lutheran Life Communities is filing for Chapter 11 bankruptcy as it seeks to reorganize its operations and financial holdings.

The Arlington Heights, Illinois-based nonprofit’s board adopted a bankruptcy resolution on Feb. 3 as it continues to seek alternatives for “addressing the financial needs” of the organization and its affiliates while also preventing interruptions to care for its residents.

The filings also note the organization is attempting to avoid a receiver being appointed in the process.

The nonprofit provider has three CCRCs and one skilled nursing facility in Illinois and Indiana in its portfolio, according to its website.

As has been the case with other recent senior living bankruptcy filings, Lutheran Life CEO Sloan Bentley said the organization ran into financial difficulties stemming from the Covid-19 pandemic. Specifically, the operator cited the escalating cost of wages, shortage of workers, stagnant Medicaid and Medicare reimbursement rates and other pressures as top challenges impacting operations and leading to its financial shortfall.

Bentley is the former CEO of Lifespace Communities, which she left in 2019.

Court filings note Lutheran Life Communities has between one and 49 creditors and between $10 million and $50 million in estimated assets and between $1 million and $10 million in liabilities.

The organization’s largest current creditor is Select Rehabilitation with a total of $808,084 outstanding.

Lutheran Life Communities has retained the services of law firm Squire Patton Boggs in the bankruptcy filing.

As of August 2024, senior housing made up nearly half of the total Chapter 11 bankruptcies among health care companies. Lutheran Life Communities is following the same path seen by Christian Horizons, which filed for Chapter 11 last July. At the time, CEO Kate Bertram told Senior Housing News the financial difficulties were spurred on by the pandemic, resulting in the nonprofit exacerbating its use of cash.

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