Haven Healthcare creditors committee objects to break-up fee provisions

By Caroline Salls

Pittsburgh, April 25 - Haven Healthcare Management, LLC's official committee of unsecured creditors objected to the break-up fee provisions included in the procedures for the proposed sale of the company's assets, according to a Thursday filing with the U.S. Bankruptcy Court for the District of Connecticut.

The committee said proposed stalking horse bidder LifeHouse Retirement Properties, Inc. should be not be allowed "unfettered discretion" to terminate the asset purchase agreement.

Specifically, the committee said the asset purchase agreement allows LifeHouse to refuse to close the sale if it does not agree to the Medicaid reimbursement rate to be allowed by the State of Connecticut.

"The ability of LifeHouse to unilaterally walk away without any measurable standard to test the justification for doing so will also result in enormous uncertainty as to the integrity of their bid," the committee said in the objection.

"This will unquestionably prejudice the success of the debtors' marketing efforts and the auction itself."

In addition, if LifeHouse terminates the purchase agreement, it should not be entitled to a break-up fee or expense reimbursement.

If the company terminates the purchase agreement, the committee said LifeHouse should only be entitled to expense reimbursement, not a break-up fee.

Haven, a Middletown, Conn.-based nursing home operator, filed for bankruptcy on Nov. 20, 2007. Its Chapter 11 case number is 07-32722.

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