An unforeseen series of events, including the deaths of two top executives, has culminated in the sudden closure of Retreat Behavioral Health, a provider of addiction treatment services operating across multiple US states. The devastating closure comes after over a year of financial difficulties for the company, leaving its employees, patients, and the communities it served in a state of turmoil.
Founded in 2011, Retreat Behavioral Health ran residential and outpatient facilities in New Haven, Connecticut; Palm Beach, Florida; and Lancaster, Pennsylvania. The company had recently been taken over by private equity firm Stonehenge Capital, although the details of the deal remain undisclosed.
The company’s financial woes had been escalating and included problems such as delayed and unpaid wages for its 750 staff members, severed ties with contractors and service providers, and legal battles over nonpayment and loan defaults, according to company officials.
“The company’s revenues had dipped, and the executive team had been aware of the dire situation for at least a year,” stated Alexander Hoinsky, the company’s chief financial officer.
The crisis reached a crescendo when the company’s founder and CEO, Peter Schorr, ended his life on June 21. Tragically, just five days later, the Chief Administrative Officer, Scott Korogodsky, also committed suicide.
“The answers about the financials you are looking for probably went to the grave with Peter and Scott,” a staff member told the media.
In the aftermath of the executives’ deaths, Retreat Behavioral Health began closing down its facilities nationwide. The company’s 80-bed residential treatment center and outpatient clinic in New Haven, Connecticut, which employed 160 people, were shut down without warning, leaving workers without pay or job security.
“There was no direction from our home office in Florida, which also is closed,” expressed Jackie James, the former local director of human resources at the company.
The closures have severely impacted the communities that Retreat Behavioral Health served, leaving patients without vital mental health and addiction treatment services.
One woman shared how Peter Schorr’s support had been instrumental in her son’s recovery and subsequent employment, stating that her son might not be alive today without Schorr’s help.
Amidst the turmoil, numerous questions remain unanswered. The U.S. Department of Labor’s Wage and Hour Division is investigating the company’s handling of employee pay and benefits. The Connecticut Department of Public Health is also involved, working to relocate patients from the now-closed facilities to other treatment centers or homes.
The closure of Retreat Behavioral Health serves as a stark indicator of the instability that can face essential services like behavioral health, highlighting the need for increased transparency, accountability, and support for the organizations that provide them.