Buckingham Senior Living files bankruptcy, cites hurricane, pandemic

By Sarah Lizee

Olympia, Wash., June 28 – Buckingham Senior Living Community, Inc. filed Chapter 11 bankruptcy Friday in the U.S. Bankruptcy Court for the Southern District of Texas to implement a restructuring transaction, according to court documents.

Michael Wyse, chair of the board of directors of the company, said that Hurricane Harvey severely impacted the debtor’s ability to build and implement a new addition to the community, and many potential residents were unable to sell their homes in order to pay for entrance fees.

The debtor and bond trustee UMB Bank, NA were able to negotiate a forbearance agreement to lessen the hurricane’s impact on the debtor’s ability to operate. But just as new residents were occupying more of the expansion units, Covid-19 spread throughout the United States, having an outsized impact on the senior living industry, and deterring potential residents from entering the community, the debtor said.

The company has entered into an agreement with 69% of holders of its bonds regarding the restructuring transaction.

Through the restructuring, UMB has agreed to defer payment of its pre-petition secured claim to repayment of the resident refund obligations for a period of up to five years.

UMB will provide up to $28.5 million in new money upon the effective date, and will exchange pre-petition bonds for $140.23 million of new 2021B bonds, with the balance being waived in the amount of about $18.8 million.

Through the restructuring, the company intends to pay all resident obligations in full, though some may be paid over an extended time period. The debtor also plans to pay all trade claims in full.

Under the plan, all allowed administrative claims, DIP facility claims, allowed priority tax claims, allowed non-priority tax claims, allowed miscellaneous secured claims, allowed trade claims and allowed charter refund obligation claims will be paid or satisfied in full.

The company said all holders of general unsecured claims will receive their pro rata share of a payment to be made by the reorganized debtor. The amount was not disclosed.

The debtor is seeking court approval to enter into a $3.4 million debtor-in-possession senior secured facility, with $1.5 million available on an interim basis. UMB Bank is the lender.

The facility will mature on Oct. 6, 2021, and interest will be 5 5/8%.

The company is also seeking approval to use the cash collateral of the UMB Bank.

The debtor listed $100 million to $500 million in both estimated assets and liabilities.

Its largest unsecured creditor is a resident of the community, with a $1.08 million contingent resident refund claim. No other holders were listed with unsecured claims of $1 million or more.

The Houston-based owner and operator of a 495-unit continuing care retirement community filed bankruptcy under Chapter 11 case number 21-32155.

© 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.