Desert Home’s plan of liquidation effective as of Feb. 14

By Sarah Lizee

Olympia, Wash., Feb. 15 – Borrego Community Health Foundation, which does business as Desert Home Care, and its official committee of unsecured creditors’ amended Chapter 11 plan of liquidation for the company went into effect on Wednesday, according to a notice filed with the U.S. Bankruptcy Court for the Southern District of California.

The plan, which was confirmed on Jan. 25, proposed to pay priority non-tax claims and secured claims in full.

Holders of general unsecured claims were to receive a pro rata share of class A trust beneficial interests.

The Department of Health Care Services’ (DHCS) was to have the $20.6 million it was withholding from the debtor applied to offset its claim. The DHCS was also to receive 40% of the net cash proceeds of the company’s $40 million asset sale to DAP Health, and distribution of its pro rata share of class B trust beneficial interests.

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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