Kingswood Senior Living files pre-packaged Chapter 11 bankruptcy case

By Sarah Lizee

Olympia, Wash., Aug. 19 – Kansas City United Methodist Retirement Home, Inc., which does business as Kingswood Senior Living Community, filed Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Western District of Missouri to implement a pre-packaged Chapter 11 plan of reorganization.

The company said in its disclosure statement that it has experienced increasing financial distress from slowed new occupancies and resulting cash flow shortfalls, causing it to fail to comply with its obligation to pay debt service.

This was exacerbated by the impact of the Covid-19 pandemic, Kingswood said.

The company said that as a result of extensive negotiations with UMB Bank, NA, as bond trustee for its $51.77 million of series 2016 senior living facility revenue bonds, and holders of at least 50% of the bond claims, it has executed a plan support agreement that will provide for a long-term resolution of its financial issues.

The plan provides for the funding of an additional $9.9 million in new money bond financing comprised of $5.5 million in principal amount of new series 2021A bonds to refinance some project costs and fund working capital and other expenses and $4.4 million principal amount of new series 2021C bonds to fund designated capital improvements.

The existing series 2016 bonds will be exchanged for a pro rata share of $27 million principal amount of new series 2021B bonds and $12.05 million principal amount of new series 2021D bonds.

Under the plan, holders of administrative expense claims, accrued professional compensation claims, other priority claims and priority tax claims will receive payment in full.

Holders of other secured claims will receive cash equal to their claims or the collateral securing their claims.

Holders of bond claims will receive their ratable share of the series 2021B bonds and series 2021D bonds on the effective date.

The company will pay an amount equal to 100% of the allowed amount of each general unsecured claim.

Holders of resident refund claims will receive payment of 100% of the allowed amount of claims un line with the existing residency agreement.

Kingswood is seeking court approval to use the cash collateral of UMB Bank. The cash collateral will be used to fund operating expenses and professional fees.

The company listed $10 million to $50 million in estimated assets and $50 million to $100 million in estimated liabilities.

Kingswood Senior Living Community is a Kansas City, Mo.-based owner and operator of a continuing care retirement community. The Chapter 11 case number is 21-41049.

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