Citing COVID-19, Florida Addiction Treatment Provider Files Chapter 11

Destination Hope — an addiction treatment provider in Fort Lauderdale, Florida — has filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of Florida. The company submitted the voluntary petition August 28, citing the coronavirus and other issues as the impetus. 

Founded in 2007, Destination Hope provides substance use disorder (SUD) rehabilitation and mental health treatment to patients at both the inpatient and outpatient levels of care. It currently has three locations, 80 employees and about 50 patients, with its census having dropped amid the COVID-19 emergency, according to information the company submitted as part of the bankruptcy process.

South Florida Business Journal initially reported the news on Friday.


In filing Chapter 11, Destination Hope plans to restructure its debt, streamline its financial structure and attempt to resolve any potential litigation, all while continuing to provide care to patients. The SUD treatment provider listed $8.58 million in debt on its bankruptcy petition. Meanwhile, its assets fall between $500,000 and $1 million.

“Destination Hope will continue to provide the same standard of excellent care that it has since 2007,” the company’s attorney Aaron Wernick told Behavioral Health Business in an email. “The facilities will remain open and the patient treatments will continue uninterrupted. Destination Hope will continue treating its existing patients and will welcome new patients as well.”

External factors — including ones related to the coronavirus — pushed Destination Hope to file, according to the company’s case management summary.


The coronavirus caused Destination Hope to see a drop off in clients. At the same time, it has seen an increase in “non-payment by various insurance companies” while its “operations show new monthly charges to private insurance providers in the approximate amount of $3 [million],” according to the summary.

The Chapter 11 process is expected to help Destination Hope shore up its assets and establish a feasible plan for its creditors, the largest of which include Newtek Financial ($2.89 million), SG Capital ($1.78 million) and Tricare ($1.5 million).

Wernick expects the company to accomplish those tasks in a cooperative matter, he said.

“Due to COVID-19 and other issues, Destination Hope saw a temporary decline in revenue that was unfortunately not completely offset by Cares Act stimulus,” Wernick said. “That said, Destination Hope looks forward to utilizing the chapter 11 process in order to emerge leaner and more profitable.”

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