Life Care St. Johns spells out treatment of claims in Chapter 11 plan

By Caroline Salls

Pittsburgh, May 17 – Life Care St. Johns, Inc. filed a Chapter 11 plan and related disclosure statement Tuesday with the U.S. Bankruptcy Court for the Middle District of Florida.

Under the plan, holders of series 2014 bond claims will receive a share of funds remaining in a debt service reserve account, a revenue fund and a Life Care St. Johns operating account.

The bond trustee will also receive $7,450 from the portion of a repair and replacement reserve and/or the operating fund that would otherwise be distributed to a refund queue trustee to reimburse the bond trustee for use of its cash collateral in connection with the sale of excess land. The bond trustee will also receive the proceeds from the sale of Life Care St. Johns assets and any unused portion of an administrative carve-out.

The distribution on account of series 2014A bonds is estimated at 61%; the distribution on account of series 2014B bonds is estimated at 0%.

Refund queue holders’ distribution trust claims will be satisfied through net excess land sale proceeds.

Post-bankruptcy entrance fees escrowed during the case will be released to Life Care St. Johns and applied toward the payment of all entrance fee refund claims. All remaining refund obligations due to pending refund claimants will be assumed by and paid by the asset purchaser.

At closing, the purchaser will pay up to $150,000 to the company on account of trade claims. If trade claims exceed the balance remaining in the $150,000 fund, holders will receive a further distribution in accordance with the treatment of general unsecured claims.

Holders of general unsecured claims and bond trustee and rejection damages deficiency claims will share in the distribution of 50% of the funds in the repair and replacement reserve and the operating reserve. Holders of refund queue deficiency claims will also share in 50% of these reserves, minus $7,450.

All interests will be cancelled.

Life Care St. Johns is a St. Augustine, Fla.-based not-for-profit. The company returned to bankruptcy on April 11 under Chapter 11 case number 16-01347.

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