When Kate Bertram took over as CEO of Christian Horizons a year ago, the nonprofit was already struggling with pandemic recovery. This ultimately led to the organization filing for Chapter 11 bankruptcy and planning to restructure.
During the early months of the Covid-19 pandemic, the St. Louis-based organization lost a significant portion of its new residents and short-term rehabilitation patients. Workforce challenges also drove up staffing costs.
“The pandemic worsened our cash usage,” Bertram told Senior Housing News.
Christian Horizons had approximately $75 million in outstanding debt when it declared bankruptcy. The organization is now seeking buyers for its 12 communities in Illinois, Indiana, Missouri, and Iowa.
Despite the challenges, Bertram remains committed to her role as CEO to guide the organization through its next phase.
‘The Runway Shortened’
Like many operators, Christian Horizons faced financial difficulties at the onset of the pandemic. Unplanned wage increases and staff reallocations strained the organization’s cash flow.
The majority of Christian Horizons’ communities are in rural areas, where maintaining minimum staffing levels proved challenging. Costs soared as the organization struggled to balance expenses and revenue.
High-performing communities were used to offset the losses of lower-performing ones, but this model was unsustainable in the long term.
New resident numbers decreased significantly, and costs surged due to the pandemic’s impact.
Efforts to generate revenue included selling assets like the PACE program to Lutheran Senior Services, but finding suitable affiliations proved challenging.
Next Steps after Ch. 11 Bankruptcy
Christian Horizons’ next steps will be guided by the U.S. bankruptcy code, while day-to-day operations will continue as usual.
Occupancy rates have shown improvement, with skilled nursing at 90%-95% and assisted living at around 85%, making the organization more attractive to potential buyers.
Christian Horizons is currently in debt to bondholders, who will determine the outcome of community sales in the bankruptcy process.
Bertram hopes that any potential buyers will uphold the nonprofit’s 60-year legacy as a faith-based organization.
“They need high-quality engagement and spiritual support,” Bertram emphasized. “That’s crucial for the older adults we serve.”
