Life Care St. Johns plan takes effect, asset sale closes on Oct. 24

By Caroline Salls

Pittsburgh, Oct. 25 – Life Care St. Johns, Inc.’s Chapter 11 plan of liquidation took effect in connection with the closing of its facility sale on Tuesday, according to a notice filed Wednesday with the U.S. Bankruptcy Court for the Middle District of Florida.

The plan was confirmed on Aug. 29, 2016.

As previously reported, Life Care received court approval in 2016 to sell its Glenmoor facility in St. Johns County, Fla., to LCS Glenmoor, LLC for $24.45 million. However, that sale agreement was terminated, and the company received court approval on July 13 to sell substantially all of its assets to Westminster Pines, Inc. through a $27.5 million private sale.

Under the plan, holders of series 2014 bond claims will receive a share of funds remaining in a debt service reserve account, a revenue fund and a Life Care St. Johns operating account.

The bond trustee will also receive $7,450 from the portion of a repair and replacement reserve and/or the operating fund that would otherwise be distributed to a refund queue trustee to reimburse the bond trustee for use of its cash collateral in connection with the sale of excess land. The bond trustee will also receive the proceeds from the sale of Life Care St. Johns assets and any unused portion of an administrative carve-out.

The distribution on account of series 2014A bonds is estimated at 61%; the distribution on account of series 2014B bonds is estimated at 0%.

Refund queue holders’ distribution trust claims will be satisfied through net excess land sale proceeds.

Post-bankruptcy entrance fees escrowed during the case will be released to Life Care St. Johns and applied toward the payment of all entrance fee refund claims. All remaining refund obligations due to pending refund claimants will be assumed by and paid by the asset purchaser.

Holders of general unsecured claims and bond trustee and rejection damages deficiency claims will share in the distribution of 50% of the funds in a repair and replacement reserve and the operating reserve. Holders of refund queue deficiency claims will also share in 50% of these reserves, minus $7,450.

All interests will be canceled.

Life Care St. Johns is a St. Augustine, Fla.-based not-for-profit. The company returned to bankruptcy on April 11, 2016 under Chapter 11 case number 16-01347.

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