Glenmoor Project to receive court approval of forbearance agreement

By Caroline Salls

Pittsburgh, July 17 – The Glenmoor Project and the indenture trustee for its series 2014A health care refunding revenue bonds and series 2014B subordinate health care refunding revenue bonds will receive court approval of a forbearance agreement related to the project’s failure to make required payments and meet specified covenants under the bond documents, according to a notice from trustee UMB Bank, NA.

The forbearance agreement, which the U.S. Bankruptcy Court for the Middle District of Florida said it would approve, will expire on the earlier of May 31, 2016 and the occurrence of a termination event.

As previously reported, the series 2014 bonds were exchanged for bonds issued in 2006 following a Chapter 11 bankruptcy and in connection with the reorganization of borrower Life Care St. Johns, Inc., which owns the Glenmoor retirement facility in St. Johns County, Fla.

The trustee said the forbearance agreement allows the project to use revenues for operating expenses at its facility in accordance with the series 2014 bond documents.

In addition, the trustee has agreed to subordinate its lien against the non-real estate assets of the project to the rights of any residents who became or become residents of independent living units at the facility after Oct. 1, 2014 through the forbearance termination date to receive their respective entrance fee refunds.

As part of the forbearance agreement, Glenmoor agreed to launch a formal process to explore a sale of the facility or an affiliation transaction and to seek a transaction on terms acceptable to the trustee.

According to a July 7 notice, the forbearance agreement sets various milestones for accomplishing the transaction, including the requirement that it close by Dec. 31.

The forbearance agreement also requires Glenmoor to hire a consultant to assist it in connection with the transaction and to analyze and make recommendations regarding the operations at the facility.

St. Augustine, Fla.-based Life Care’s Chapter 11 plan of reorganization took effect on April 16, 2014.

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