March 10, 2019
Another day, another continuing care retirement community in bankruptcy. Here, Air Force Village West Inc. (d/b/a Altavita Village), a California non-profit corporation with 361 residents filed for bankruptcy in the Central District of California. We’ve covered how CCRCs operate in some recent bankruptcy filings (e.g., 😷New Chapter 11 Bankruptcy Filing - Mayflower Communities Inc. (d/b/a The Barrington of Carmel)😷 and 😷New Chapter 11 Bankruptcy Filing - SQLC Senior Living Center at Corpus Christi Inc. (d/b/a Mirador)😷) and so we don’t necessarily see the point in repeating the business basics here. Suffice it to say: the CCRC business model requires some modifications. “The company has been operating at a loss and cannot pay its liabilities as they mature.” No sh*t.
Naturally, debt is part of the issue. The company owes $66mm in alleged secured indebtedness to its prepetition lenders; it has been in payment default since March 2017. The lenders subsequently sued for the appointment of a receiver and succeeded. After the receiver was in place, the receiver, the debtor and the lenders pursued a two-year sale process with two bankers (failed) and, then later, Cushman & Wakefield (“C&W”). C&W was able to locate a stalking horse bidder, Westmont Development LP, an affiliate of Westmont Living Inc., for a 363 sale of the debtor’s assets while in bankruptcy. In light of the fact that the company already pursued a robust sale process, it seeks to consummate the sale transaction by June 2019.
Jurisdiction: C.D. of California (Judge )
Legal: Dentons US LLP (Samuel Maziel, Tania Moyron, Gary Marsh, Bryan Bates)
Investment Banker: Cushman & Wakefield US Inc.
Claims Agent: KCC (*click on the link above for free docket access)
Other Parties in Interest: