Another investor filing delayed by PACS, ‘substantial progress’ reported on internal investigation

PACS Group recently informed the US Securities and Exchange Commission and its investors about its failure to meet another quarterly filing requirement. The nursing home chain grew rapidly in 2024 and raised $450 million when it went public. However, its growth trajectory was disrupted by a scathing report from an activist investment firm in November.

The report caused PACS’s shares to plummet due to claims that the company engaged in fraudulent schemes and aggressive practices to boost its profits. One of the allegations was that PACS inflated its revenues by taking advantage of a COVID-era waiver of Medicare’s required three-day stay, allowing them to inappropriately access skilled care Medicare benefits for thousands of patients.

Following the report, PACS executives canceled a call to discuss third-quarter earnings and have not yet released full results from that quarter. The company also announced that it would miss the filing deadline for its annual 10-K report due in mid-May. PACS responded to the allegations by calling them misleading but confirmed that they were conducting an internal investigation and cooperating with the federal government’s demands.

The company stated that it has made substantial progress in its investigation and intends to file its Annual Report on Form 10-K for the year ended December 31, 2024, as soon as possible. PACS has not provided further comments on the ongoing investigation or the civil lawsuits it is facing related to the Hindenburg report’s allegations.

Several law firms have initiated recruiting efforts to form potential class-action plaintiff groups following the report. PACS is currently awaiting a decision on whether the civil lawsuits will be consolidated by the US District Court for New York’s Southern District. Additionally, PACS has requested the transfer of a case to the US District Court for Utah and must file its third-quarter 2024 filing by June 25 to meet the judge’s timeline for impending motions.