Sears Methodist subsidiary looks to sell all assets for $6.24 million

By Kali Hays

New York, Sept. 19 – Sears Methodist Retirement System, Inc. subsidiary Sears Plains Retirement Corp. is seeking approval of an auction to sell substantially all of its assets and of a $6.24 million stalking horse bidder, Knight Health Holdings LLC, according to a Sept. 18 motion with the U.S. Bankruptcy Court for the Northern District of Texas.

Sears Plains is the owner of the Mildred and Shirley L Garrison Geriatric Education and Care Center located on the campus of Texas Tech University in Lubbock, Texas.

The center is located on land that is leased to Sears Plains by Texas Tech pursuant to a lease agreement set to expire in 2049.

Sears Plains is proposing to transfer the lease in the proposed sale process free and clear of Texas Tech’s lessor right of first refusal to elect to purchase the leasehold interest “because of the potential chilling effect on the sale process,” according to the motion.

Sears Plains said it would treat Texas Tech as a qualified bidder throughout the sale.

Under the proposed bid procedures, Knight Health’s $6.24 million bid would be the opening bid at the auction.

All subsequent overbids are to be made in $100,000 increments and be accompanied by a refundable cash deposit of $1 million.

The current bid deadline is Oct. 27.

If one or more additional qualified bids are received by the deadline, Sears Plains asked that an auction be held Oct. 29.

If Knight Health is not the prevailing bidder the company would be entitled to a $180,000 breakup fee and reimbursement of sale related expenses up to $25,000, according to the stalking horse agreement.

Sears Methodist is a Dallas-based non-profit senior living provider that filed for bankruptcy June 10. The Chapter 11 case number is 14-32821.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.