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Friendship Village’s plan confirmation hearing moved to May 20
By Sarah Lizee
Olympia, Wash., April 30 – Evangelical Retirement Homes of Greater Chicago, Inc., which does business as Friendship Village of Schaumburg, had the hearing on confirmation of its Chapter 11 plan of liquidation moved to May 20 from April 30, according to a notice filed Tuesday with the U.S. Bankruptcy Court for the Northern District of Illinois.
The plan drew an objection from U.S. trustee Patrick S. Layng, who said there are significant deficiencies with the plan, including improper third-party releases, and the inclusion of a settlement that the court lacks jurisdiction over and does not have the authority to approve.
The U.S. trustee also objected to the requirement that creditors opt out of the third-party releases, coupled with a “death trap.”
The plan contemplates the sale of substantially all the debtor’s assets, as previously reported.
The company received approval to sell its assets to stalking horse bidder IL CCRC LLC. Proceeds from the sale will be used to pay allowed administrative expense claims, priority tax claims, professional fee claims, DIP facility claims, and U.S. trustee fees.
Under the plan, other secured claims and other priority claims are unimpaired.
Holders of $131.6 million of bond claims are expected to receive a 23.3% recovery.
Treatment of deficiency claims will be determined by the amount of net sale proceeds available for distribution to this class.
Holders of $20 million of former resident claims are expected to receive a recovery of 10% to 17.5%.
Holders of opt-out former resident claims will receive nothing under the plan.
The expected recovery for $3.96 million of non-resident general unsecured claims is unknown.
Holders of intercompany claims and interests in the debtor will receive nothing.
The Schaumburg, Ill.-based retirement community filed bankruptcy on June 9, 2023 under Chapter 11 case number 23-07541.
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