Desert Home’s disclosure statement draws objection from U.S. trustee

By Sarah Lizee

Olympia, Wash., Nov. 28 – Borrego Community Health Foundation, which does business as Desert Home Care, and its official committee of unsecured creditors’ disclosure statement for their Chapter 11 plan for the company drew an objection from Region 15 U.S. trustee Tiffany L. Carroll, according to documents filed Tuesday with the U.S. Bankruptcy Court for the Southern District of California.

Carroll said the disclosure statement fails to provide adequate information about the plan in several important respects.

Specifically, the disclosure statement does not include a liquidating trust agreement or disclose the identity or affiliations of the liquidating trustee and the post-effective date board of directors’ members.

“This information is highly relevant to creditors’ assessment of the plan, including whether to entrust liquidation to the liquidating trustee or a Chapter 7 trustee,” the U.S. trustee said in the objection.

The disclosure statement also does not address the payment of quarterly fees if a case is reopened after entry of a final degree, Carroll added.

Finally, the disclosure statement does not adequately address the filing of post-confirmation quarterly reports, the U.S. trustee said.

The San Diego-based provider of in-home skilled nursing services filed Chapter 11 bankruptcy on Sept. 12, 2022 under case number 22-02384.

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