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Lake Worth-Based Behavioral Health Provider Files for Bankruptcy: Key Insights and Legal Considerations

  • Writer: Jeffrey Lynne
    Jeffrey Lynne
  • Sep 5
  • 2 min read

August 2025 brought major news in the behavioral healthcare world: Praesum Healthcare Services, LLC, a Lake Worth, FL–based operator of addiction treatment centers, filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of Florida.(turn0search4)

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Filing Snapshot

  • Date Filed: August 13, 2025

  • Court: Southern District of Florida, West Palm Beach Division

  • Estimated Assets: $50 million to $100 million

  • Estimated Liabilities: $10 million to $50 million

  • Case Number: 25-19335 (turn0search4)


What’s Behind the Bankruptcy?

Plaintiffs and court filings highlight multiple contributing factors:


  • Lender Dispute: Praesum is alleged to have violated debt covenants tied to a $23 million loan from City National Bank of Florida, including breaches of cash flow, profitability, and financial-reporting requirements. The bank holds a claim of $20.6 million.(turn0search9)

  • Regulatory Pressure: Florida regulators also flagged serious safety deficiencies at Praesum’s South Florida locations—compounding its financial and operational stress.(turn0search11)


Current Status & Next Steps

  • Case Progress: The 341 meeting of creditors is scheduled for September 18, 2025. Notably, a Patient Care Ombudsman has been appointed, signaling oversight aimed at ensuring continuity of care.(turn0search14)

  • Claim Deadlines: Claims must be submitted by October 22, 2025, while the deadline for government-related claims is February 9, 2026.(turn0search14)


What This Means for Providers and Counsel

Consideration

Implication

Automatic Stay Protection

Chapter 11 creates an immediate buffer against creditor collection and litigation—buyers or vendors should be aware of potential stay orders.

Continuity of Patient Care

The appointment of a Patient Care Ombudsman underscores the importance of protecting clients’ access to treatment amid restructuring.

Contract & Leases Review

The debtor may choose to reject or renegotiate executory contracts and leases; providers and landlords should monitor these contracts closely.

Best Practices for Providers

  • Implement due diligence when partnering—monitor financial health and compliance.

  • Ensure contracts include clear protective clauses (e.g., termination, transition plans).

  • Be prepared for bankruptcy proceedings, including the timely filing of claims and active participation in hearings.


Lynne Legal’s Perspective

Praesum’s filing shines a spotlight on the complex vulnerability of behavioral health providers who juggle treatment mission with financial and regulatory demands. Whether you're a provider, funder, or partner, this case is a reminder:

  • Proactive risk management and legal safeguards are indispensable.

  • Contracts must be designed to anticipate distress scenarios.

  • Legal counsel should be integrated early—not just as a response tool, but as a governance partner.

 
 
 

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