Haven Healthcare creditors committee asks court to postpone auction after stalking horse bid gets pulled

By Jennifer Lanning Drey

Portland, Ore., May 21 - Haven Healthcare Management, LLC's official committee of unsecured creditors asked the U.S. Bankruptcy Court for the District of Connecticut to adjourn until further notice the auction related to the sale of substantially all of the company's assets, according to a Tuesday filing.

The auction is scheduled for May 22.

The committee requested the adjournment in light of stalking horse bidder LifeHouse Retirement Properties, Inc.'s May 19 termination of the previously negotiated asset purchase agreement.

According to the filing, LifeHouse terminated the agreement after the state of Connecticut announced new Medicaid-reimbursement rates for state-aided residents at Haven's facilities that are dramatically lower than expected.

"If the auction proceeds to conclusion under the current circumstances, there is a grave risk that the sale price will be so low as to pay nothing more than the secured debt," the committee said in the motion.

The creditors said they need additional time to investigate the circumstances surrounding the rate announcement to determine whether higher rates are appropriate. They also want time to consider whether Haven's assets could be repackaged in a way that might yield a higher sale price.

Haven, a Middletown, Conn.-based nursing home operator, filed for bankruptcy on Nov. 20, 2007. Its Chapter 11 case number is 07-32722.

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