Luther Oaks retirement community in Bloomington and its parent company, Arlington Heights-based Lutheran Life Communities, have filed for bankruptcy.
The two entities and others under the Lutheran Life umbrella have asked a federal judge in the northern district of Illinois for Chapter 11 protection from creditors to allow reorganization.
“Since COVID, operating costs have increased significantly while revenue reimbursement has not," a Lutheran Life spokesperson said in a statement. "As a nursing care driven organization, the company has made significant operational improvements to reduce costs and improve cash flow in order to service debt."

Lutheran Life said its three retirement communities and one nursing home in Illinois and Indiana will remain open and operating normally.
“Under the supervision of the bankruptcy court, we expect our team members will continue to be paid and maintain their benefits," the statement reads. "Our residents will continue to have a safe and secure home where they will continue to receive our high stand of care and compassionate living experience."
Court documents show assets of $10 million to $50 million and debts of $100 million to $500 million. The company said it had tried for more than a year to restructure its debt. The Luther Oaks filing indicated there are up to 200 creditors. The largest unsecured creditor listed is Select Rehabilitation of Chicago which is owed more than $800,000. The filing noted that Lutheran Life estimates it will have funds available for distribution to unsecured creditors.
"This is not our desired approach to solving debt issues, but we believe this is the best option for Lutheran Life Communities to move forward,” the spokesperson said.
Lutheran Life is more than 130 years old. Court documents indicate the not-for-profit serves about 825 senior residents in its four facilities. Luther Oaks opened in 2007.