Eagle Senior Living’s Chapter 11 plan effective as of Sept. 8

By Sarah Lizee

Olympia, Wash., Sept. 8 – American Eagle Delaware Holding Co. LLC, which does business as Eagle Senior Living, had its Chapter 11 plan of reorganization go into effect on Thursday, according to a notice filed with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, the plan was confirmed on April 27.

According to the plan, the restructuring provides for the funding of an additional $28.13 million in new money bond financing, comprising $10.91 million principal amount of new taxable series 2022A-1 6% nine-year bonds with payment in kind for the first four years and $17.22 million of principal amount of new tax-exempt series 2022A-2 6% bonds maturing in 14 years with payment in kind for the first eight years. This will fund a capital expenditure fund of up to $15.23 million and an operating fund of up to $6.44 million.

The restructuring also provides for an exchange of the roughly $215.53 million of outstanding series 2018 bonds for a pro rata share of the series 2022 bonds.

Specifically, each consenting holder will have the opportunity to purchase the series 2022A-1 bonds in an amount proportionate to the outstanding principal amount of series 2018A-1 bonds that holder owns, plus a share of any series 2022A-1 bonds that are not purchased by other consenting holders.

Likewise, consenting holders will have the opportunity to purchase series 2022A-2 bonds in an amount proportionate to the outstanding principal amount of series 2018A-2 bonds they own, plus a share of any series 2022A-2 bonds that are not purchased by other consenting holders.

The series 2022A-1 and 2022A-2 bonds will be secured by a first priority lien on all assets of the reorganized debtors, subject to permitted encumbrances.

The existing series 2018A-1 bonds, which currently total $140.76 million outstanding principal amount, will be exchanged for new series 2022B-1 bonds. Each holder of a 2018A-1 bond claim will be deemed to have exchanged its series 2018A-1 bonds for a new series of tax-exempt 2022B-1 bonds in an initial principal amount equal to the principal amount of series 2018A-1 bonds held by the holder plus accrued interest to the petition date, minus the Vista Lake redemption amount.

The series 2022B-1 bonds will be issued in the aggregate principal amount of $153.3 million and bear interest at a rate of 5% per annum for the first 10 years, 5¼% per annum for the next 10 years and 5½% per annum for the remaining 15 years, with the final maturity 35 years from issuance.

Payments on the series 2022B-1 bonds will be interest only for the first 17 years due and payable semiannually. Annual principal payments will start after the interest-only period.

The existing series 2018A-2 bonds, which currently total $19.16 million outstanding principal amount, will be exchanged for new series 2022B-2 bonds. Each holder of a 2018A-2 bond claim will be deemed to have exchanged its series 2018A-2 bonds for a new series of taxable 2022B-2 bonds in an initial principal amount equal to the principal amount of series 2018A-2 bonds held by the holder plus accrued interest to the petition date.

The series 2022B-2 bonds will be issued in the aggregate principal amount of $20.64 million and bear interest at a rate of 5% per annum for the first 10 years and 5¼% per annum for the remaining eight years, with the final maturity 18 years from issuance.

Payments on the series 2022B-2 bonds will be interest only for the first 14 years due and payable semiannually. Annual principal payments will start after the interest-only period.

The existing series 2018B bonds, which currently total $33.82 million outstanding principal amount, will be exchanged for new series 2022C bonds. Each holder of a 2018B bond claim will be deemed to have exchanged its series 2018B bonds for a new series of tax-exempt 2022C bonds in an initial principal amount equal to 50% of the sum of the principal amount of series 2018B bonds held by the holder plus accrued interest to the petition date.

The series 2022C bonds will be issued in the aggregate principal amount of $18.06 million and bear interest at a fixed tax-exempt rate of 2% per annum. The final maturity of the series 2022C bonds will be 35 years from issuance. The series 2022C bonds may be redeemed with excess cash flow.

The existing series 2018C bonds, which currently total $21.79 million outstanding principal amount, will be exchanged for new series 2022D bonds. Each holder of a 2018C bond claim will be deemed to have exchanged its series 2018C bonds for a new series of tax-exempt 2022D bonds in an initial principal amount equal to 10% of the sum of the principal amount of series 2018C bonds held by the holder plus accrued interest to the petition date.

The series 2022D bonds will be issued in the aggregate principal amount of $2.46 million and will not bear interest. The final maturity will be 35 years from issuance. These bonds may be redeemed with excess cash flow.

Under the plan, administrative expense claims, accrued professional compensation claims, other priority claims and priority tax claims will be paid in full.

Holders of other secured claims will receive cash equal to the amount of their claims, the collateral securing their claims, reinstatement or other treatment leaving their claims unimpaired.

To the extent holders of general unsecured claims have not been paid prior to the effective date, they will receive their pro rata share of a $250,000 general unsecured fund.

Intercompany claims will be canceled with no distribution to holders.

Because the debtors are nonprofit entities, the equity or ownership interests in the debtors are deemed held by the public, and not by any individuals or entities. Interests will be preserved, and no property or other distribution of value will be made on account of the interests.

The Ann Arbor, Mich.-based senior living community provider filed bankruptcy on Jan. 14, 2022 under Chapter 11 case number 22-10028.

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