Edgemere third attempt at disclosure statement approved by court

Chicago, Dec. 20 – Northwest Senior Housing Corp., which does business as Edgemere Dallas, received approval of its third modified disclosure statement that was backed by the support of UMB Bank, NA as bond trustee and debtor-in-possession lender, sole member Lifespace Communities, Inc., and the official committee of unsecured creditors with the U.S. Bankruptcy Court for the Northern District of Texas.

The final modifications involved streamlining the tax treatment on a residents trust and clarifying the releasing parties.

Additionally, challenges brought forth by the committee and resident challenges will be dismissed with prejudice by the court on the effective date under the modified plan.

The company separately filed an executed version of the stalking horse agreement with Bay 9 Holdings LLC for $48.5 million.

Edgemere put forward a revised voting schedule in a proposed order regarding the plan.

The solicitation deadline is Dec. 22.

The voting deadline would be Jan. 20 and the confirmation and sale hearing date would be scheduled for Jan. 26.

Background

As previously reported, under the plan, assets not sold pursuant to the asset sale related to the stalking horse agreement will be transferred to a litigation trust to be liquidated for the benefit of creditors.

The plan will convert the senior community into a rental model.

The plan will also include a settlement of all potential estate, trustee, DIP and resident claims against Lifespace in exchange for a $16.5 million payment to the trustee on the effective date for distribution in current holders of the original bonds, and annual payments made into a residents trust, which will be used to pay participating residents for claims relating to their residency agreements.

In exchange for the Lifespace residency contributions and the release provided under the plan, Lifespace will be entitled to a pro rata distribution of litigation trust assets.

Holders of other priority claims will receive payment in full in cash.

Holders of bond claims are estimated to receive distributions of about 40% of their bond claims.

Holders of general unsecured claims will receive a pro rata share of the litigation trust proceeds. They’re expected to receive distributions ranging from zero to 50% of their claims, depending on the outcome of litigation with landlord Intercity Investment Properties, Inc. and the liquidation of the other litigation trust assets.

Holders of former and current resident claims who opt out of the Lifespace settlement will receive a general unsecured claim. Those who don’t opt out will receive cash from the residents trust in an amount equal to their refund claim.

Intercompany claims held by Lifespace will be waived and released with no distribution.

The interests held by Lifespace will be terminated.

The Dallas-based luxury senior living community filed Chapter 11 bankruptcy on April 14, 2022 under case number 22-30659.

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