Unfortunate circumstances led to the sudden closure of Retreat Behavioral Health, an addiction treatment provider spanning multiple states. The company had been grappling with financial difficulties for over a year, an issue exacerbated by the passing of two key executives. This has left employees, patients, and the communities they served in a state of uncertainty.
Established 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 acquired by private equity firm Stonehenge Capital, though the terms of this deal were not disclosed.
Company officials acknowledged that financial problems had been developing for some time. Among the challenges faced by the company were delayed and unpaid wages for its 750-strong workforce, the withdrawal of contractors and service providers, and legal wrangles over nonpayment 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,” said Alexander Hoinsky, the company’s chief financial officer.
The situation reached a critical point with the suicide of the company’s founder and CEO, Peter Schorr, on June 21. A mere five days later, on June 26, Scott Korogodsky, the company’s Chief Administrative Officer, also ended his own life.
An employee told reporters, “The answers about the financials you are looking for probably went to the grave with Peter and Scott.”
Following the tragic loss of the two executives, Retreat Behavioral Health started closing its facilities nationwide. Both the 80-bed residential treatment center and outpatient clinic in New Haven, Connecticut, employing 160 people, were suddenly shut down, leaving employees without wages or job security.
“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 impacted the communities served by Retreat Behavioral Health, leaving patients without the crucial mental health and addiction treatment services upon which they depended.
One woman credited Peter Schorr’s support for her son’s survival, stating that Schorr provided her son with hope, purpose, and eventually a job after he maintained sobriety for a year, a prerequisite for employment.
The situation has raised many questions, prompting the U.S. Department of Labor’s Wage and Hour Division to investigate the company’s management of employee pay and benefits. The Connecticut Department of Public Health has also stepped in to help relocate patients from the closed facilities to other treatment centers or homes.
The closure of Retreat Behavioral Health underscores the vulnerability of vital services in the behavioral health industry and highlights the necessity for increased transparency, accountability, and support for organizations that provide these services.
