Haven Healthcare creditors committee objects to $84.75 million asset sale

By Jennifer Lanning Drey

Portland, Ore., June 26 - Haven Healthcare Management, LLC's official committee of unsecured creditors objected to the company's motion for approval to sell substantially all of its assets for $84.75 million to FC/SCH, according to a Wednesday filing with the U.S. Bankruptcy Court for the District of Connecticut.

The creditors believe Haven should have been allowed to remarket its assets and established new sale procedures after LifeHouse Retirement Properties, Inc., its original stalking horse bidder, terminated a prior asset purchase agreement.

As previously reported, Haven defaulted on the terms of its debtor-in-possession financing facility after failing to have a court-approved sale agreement in place by May 30. The DIP lenders had previously agreed to continue funding the company through the closing of an asset purchase agreement but later told Haven they would not continue to fund the company beyond the end of July.

The creditors committee believes the company's lenders are using Haven's bankruptcy case "as a convenient way to liquidate their collateral." Therefore the sale unfairly favors the lenders, they said in Wednesday's filing.

Additionally, the committee said the sale motion should be denied because the sale price is not fair and reasonable as there have been no appraisals and the winning bid was not obtained in a properly conducted auction.

The creditors further argued that the proposed sale would result in the administrative insolvency of the company's estate. If there is no reasonable likelihood of rehabilitation, the case should be converted to Chapter 7 for liquidation or dismissed, they said.

As previously reported, Haven's proposed asset sale falls short of providing the unsecured creditors with a recovery in the company's Chapter 11 bankruptcy case.

In order for the creditors to receive any recovery from the sale, the sale price would have to be at least $103 million, according to Haven.

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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