Retreat Behavioral Health, a multi-state addiction treatment provider, has suddenly closed its doors following a series of unfortunate incidents including the deaths of two of its top executives. This closure comes after a year of financial difficulties that have left employees, patients, and the communities it served in a state of uncertainty.
The treatment provider, established in 2011, had residential and outpatient facilities in New Haven, Connecticut; Palm Beach, Florida; and Lancaster, Pennsylvania. The company was recently bought by private equity firm Stonehenge Capital, although the specifics of the deal have not been disclosed.
Company officials indicated that the financial issues had been ongoing. Retreat Behavioral Health was grappling with problems such as delayed and unpaid salaries for its 750 employees, disconnection with contractors and service providers, and legal battles over unpaid dues and loan defaults.
“The company’s revenues had dipped, and the executive team had been aware of the dire situation for at least a year,” reported Alexander Hoinsky, the company’s chief financial officer.
The critical point came when Peter Schorr, the founder and CEO of the company, committed suicide on June 21. In a tragic succession, just five days later, the company’s Chief Administrative Officer, Scott Korogodsky, also ended his life.
An employee expressed that the detailed information regarding the company’s financial condition likely was lost with the deaths of Peter and Scott. Shortly after the executives’ deaths, Retreat Behavioral Health started shutting down its facilities nationwide.
Among the closures was the 80-bed residential treatment center and outpatient clinic in New Haven, Connecticut, which employed 160 people. The abrupt closure left employees jobless and without paychecks. “There was no direction from our home office in Florida, which also is closed,” stated Jackie James, the former local director of human resources.
The closures have severely affected the communities served by Retreat Behavioral Health, leaving patients without crucial mental health and addiction treatment services. One woman credited Peter Schorr with providing her son hope and a job after he maintained sobriety for a year.
The situation has prompted an investigation by the U.S. Department of Labor’s Wage and Hour Division into the company’s handling of employee paychecks and benefits. The Connecticut Department of Public Health is also involved, ensuring the transition of patients from the closed facilities to other treatment centers or homes.
As challenges continue to plague the behavioral health industry, the closure of Retreat Behavioral Health underscores the vulnerability of these invaluable services. It also highlights the need for increased transparency, accountability, and support for organizations offering these services.
