A sudden and tragic series of events has led to the abrupt closure of Retreat Behavioral Health. This multi-state addiction treatment provider has been embroiled in financial struggles for over a year. The company’s downfall was compounded by the deaths of two of its top executives, leaving employees, patients, and the local communities it served in a state of uncertainty and despair.
Retreat Behavioral Health, founded in 2011, operated residential and outpatient facilities in New Haven, Connecticut, Palm Beach, Florida, and Lancaster, Pennsylvania. Private equity firm Stonehenge Capital had recently acquired the company, but the deal’s terms were not made public.
According to company officials, the financial troubles had been mounting for some time. The company faced issues such as late and unpaid paychecks for its staff of 750, the disengagement of contractors and service providers, and legal disputes 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 crisis came to a head when the company’s founder and CEO, Peter Schorr, died by suicide on June 21. Just five days later, on June 26, the company’s Chief Administrative Officer, Scott Korogodsky, also took his own life.
“The answers about the financials you are looking for probably went to the grave with Peter and Scott,” one employee told reporters.
Following the deaths of the two executives, Retreat Behavioral Health began shutting down its facilities across the country. The 80-bed residential treatment center and outpatient clinic in New Haven, Connecticut, which employed 160 people, were abruptly closed, leaving employees without paychecks or job security.
“There was no direction from our home office in Florida, which also is closed,” said Jackie James, the former local director of human resources.
The closures have had a devastating impact on the communities Retreat Behavioral Health served, as patients have been left without access to the critical mental health and addiction treatment services they relied on.
One woman said her son might not be alive today without Peter Schorr’s support. She shared that Schorr provided her son with hope, purpose, and eventually employment after he remained sober for a year as a condition for being hired.
The situation has also left many unanswered questions, with the U.S. Department of Labor’s Wage and Hour Division investigating the company’s handling of employee paychecks and benefits. The Connecticut Department of Public Health has also been involved, working to transfer patients from closed facilities to other treatment centers or homes.
As the behavioral health industry continues to face challenges, Retreat Behavioral Health’s closure serves as a stark reminder of the fragility of these essential services and the need for greater transparency, accountability, and support for the organizations that provide them.