Haven Healthcare creditors committee objects to bid procedures for proposed asset sale

By Jennifer Lanning Drey

Portland, Ore., March 31 - Haven Healthcare Management, LLC's official committee of unsecured creditors objected to the company's proposed bidding procedures related to the sale of all of its assets on the grounds that the bid procedures provide no base amount by which to measure whether the fees are appropriate, according to a Monday filing with the U.S. Bankruptcy Court for the District of Connecticut.

As previously reported, Haven requested court approval of the bid procedures related to the proposed sale but has not yet selected a stalking horse bidder.

Under the proposed bid procedures, if Haven selects a stalking horse bidder before the auction, it would pay that bidder a 3% break-up fee if it ultimately is not the high bidder for the assets.

In the objection, the committee said it objected to "authorizing the break-up fee in a vacuum," which it said was the case because there is no way to measure whether the fee is reasonable without seeing a proposed transaction.

Also under the proposed bid procedures, if a stalking horse bid is selected, initial overbids must be for at least the sum of the stalking horse bid, the amount of the break-up fee and a $1 million overbid.

At the auction, each bid must be for at least $250,000 more than the previous bid, which the committee again said was an impossible request to evaluate given the lack of information.

The assets Haven wants to sell include six owned and 19 leased facilities located in five states in New England, plus all of the assets owned or leased by the company at these facilities and Haven's corporate headquarters, including inventory, accounts, furniture, fixtures, equipment and trade names.

Haven, a Middletown, Conn.-based nursing home operator, filed for bankruptcy on Nov. 20. Its Chapter 11 case number is 07-32722.

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