Epworth Villa keeps up with payments; trustee eyes plan information

By Caroline Salls

Pittsburgh, Jan. 8 – The trustee for revenue bonds issued by Central Oklahoma United Methodist Retirement Facility, Inc., which does business as Epworth Villa, said the company has made all of the payments due on its bond debt since its July 2014 bankruptcy filing and is expected to make an April 1 bond payment, according to a notice to bondholders.

Trustee BancFirst said the bonds covered by the notice include Epworth’s series 2004B, 2005A, 2005B, 2012A and 2012B revenue bonds.

According to the notice, Epworth filed its plan of reorganization on Dec. 22, but it is not soliciting votes on the plan at this time.

The trustee said Epworth Villa alleges that the best interests of all parties will be served by its proposal of the plan with an ensuing period of time in which interested parties have an opportunity to discuss the plan or changes to it “with the goal of a prompt and efficient non-adversarial resolution of the bankruptcy case.”

In addition, Epworth Villa claims that if it is required to incur the significant expense of preparing a disclosure statement with a view toward a contested prosecution of the plan documents in a compressed time-frame, valuable estate resources may be squandered and optimal conditions for consensual case resolution may not be achieved.

BancFirst said it preliminarily reviewed the plan, but it is not possible to fully assess the plan without the benefit of the financial information that would typically be included in a disclosure statement.

In particular, the trustee said it needs a disclosure of the amounts of cash to be used to make required plan payments.

When financial information is received and the plan is fully assessed, the trustee said it intends to work with Epworth to resolve any issues related to the treatment of bondholder claims.

On Thursday, the U.S. Bankruptcy Court for the Western District of Oklahoma set the deadline for filing of a disclosure statement to coincide with the expiration of Epworth’s exclusive period for filing a Chapter 11 plan. The exclusive plan-filing period is scheduled to expire on Feb. 16.

The trustee said the proof of claim filing deadline for Epworth’s bankruptcy case is 5:30 p.m. ET on Jan. 30. BancFirst is preparing a proof of claim on behalf of all bondholders.

Creditor treatment

Treatment of creditors under Epworth Villa’s proposed plan will include the following:

• Administrative claims, tax claims and priority claims will be paid in full in cash;

• The rights to which indenture claims entitle the holder will not be altered and will continue to be governed by credit facility documents, with specified exceptions;

• Other secured claims will be reinstated or satisfied through the surrender of collateral securing the claim;

• Holders of administrative convenience claims will receive cash equal to the lesser of $1,000 or the allowed amount of the claim without post-bankruptcy interest;

• Holders of key creditor claims will recover 80% without post-bankruptcy interest;

• Holders of insured claims will be able to seek liquidation of their claims by final court judgment and collect the claim from an issuer of a policy of indemnity insurance that provides coverage for the claim;

• Holders of penalty claims will receive junior beneficial shares in a litigation trust;

• Holders of other unsecured claims will receive senior beneficial shares in the litigation trust; and

• Interest holders will receive no distribution.

Epworth Villa, an assisted living facility in Oklahoma City, filed bankruptcy on July 18, 2014 in the U.S. Bankruptcy Court for the Western District of Oklahoma. The Chapter 11 case number is 14-12995.

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