Lebanon, Pennsylvania — A federal bankruptcy judge has signed off on the $40 million sale of Cedar Haven Healthcare Center, closing out months of legal wrangling over a Pennsylvania nursing home that has now stumbled into its second bankruptcy since the county sold it off in 2014.
Judge Henry Van Eck approved the deal at a May 19 hearing in Harrisburg, according to local reports. The sale won’t close for roughly 60 days, but the path is set — and it marks another chapter in a privatization story that hasn’t gone the way Lebanon County hoped.
The bidding got fierce — and the buyer was already inside the building
The May 1 auction produced a combined high bid of $40.375 million, well above the $27.9 million stalking horse floor. It took 54 rounds of bidding between two independent bidders to push the price that high.
The winning bidder? Cedar Haven Healthcare Center, the same company already running the facility on a day-to-day basis. CHHC is an affiliate of MDA Capital Group, a private equity firm that focuses on the nursing home industry. So the operator that couldn’t pay its rent is now the buyer — funded through a private equity vehicle that has been quietly building a Pennsylvania nursing home portfolio.
A split-ownership mess that triggered the bankruptcy
After the 2014 privatization, Cedar Haven’s ownership got carved into two pieces. One company, 590 S. 5th Avenue LLC, took the building and grounds. A separate entity, Cedar Haven Acquisition LLC, ran the actual nursing home and cared for the more than 300 residents who live there.
That arrangement collapsed in late 2025. The landlord sued the operator for $1.4 million in unpaid rent. A Lebanon County court appointed a receiver. Cedar Haven Acquisition filed Chapter 11 in January. Because the building owner wasn’t part of the bankruptcy, the real estate — by far the most valuable piece — wasn’t technically available to satisfy the operator’s creditors.
A larger carveout for creditors
That structure sparked a fight over how much of the $40 million should reach the people the operator owed money to. The trustee initially proposed setting aside only $2 million for creditors, including the commonwealth of Pennsylvania. Van Eck pushed back. By the May 19 hearing, the parties had bumped the carveout to $5.25 million.
The judge accepted that figure as market-based, pointing to the auction’s final bidding rounds and the gap between the floor price and the closing bid. Creditors who had objected weeks earlier dropped their objections on the spot.
The sale still has hurdles. Cedar Haven’s operating license has to transfer through state regulators, and the real estate transaction has to be finalized separately. But the direction is set — a former county nursing home is heading into private equity hands, fitting a pattern that mirrors the kind of operator collapse and bankruptcy disputes reshaping the industry.
