Amsterdam House reaches settlement with member, committee

By Sarah Lizee

Olympia, Wash., Oct. 31 – Amsterdam House Continuing Care Retirement Community, Inc., which does business as the Harborside, and its official committee of unsecured creditors have reached a settlement with sole member Amsterdam Continuing Care Health System, Inc., according to a motion filed Tuesday with the U.S. Bankruptcy Court for the Eastern District of New York.

The debtor said that an investigation by the committee has examined various potential claims and causes of action against the member relating to its relationship to the debtor prior to the bankruptcy filing and the member’s representations to residents, as well as potential claims and causes of action pertaining to the member’s corporate structure.

Amsterdam Continuing Care has denied any wrongdoing and has defended its corporate formalities.

However, it has offered to commit a $35 million financial contribution to the debtor’s estate in furtherance of its charitable mission and board directives, Amsterdam House said.

The debtor said the committee, acknowledging that the member’s proposed contribution likely exceeds any potential recoveries that could be achieved through the filing of an adversary proceeding against the member, worked with the parties to document the settlement term sheet.

If approved, the settlement would fully and finally resolve any estate claims against the member.

According to the term sheet, the $35 million contribution will be raised to $50 million if bond trustee UMB Bank, NA becomes a party to the settlement before Nov. 15. In that case, the bond trustee would also participate in the releases and stand-down on discovery and litigation under the settlement.

The Port Washington, N.Y.-based retirement community builder and operator filed Chapter 11 bankruptcy for the third time on March 22, 2023 under Chapter 11 case number 23-70989.

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