Edgemere Dallas’ hearing on disclosure statement slated for Sept. 29

By Sarah Lizee

Olympia, Wash., Aug. 10 – Northwest Senior Housing Corp., which does business as Edgemere Dallas, had the hearing on approval of the disclosure statement for its Chapter 11 plan of reorganization scheduled for Sept. 29, according to a notice filed with the U.S. Bankruptcy Court for the Northern District of Texas.

As previously reported, the plan proposes a bond transaction, which provides for the issuance of new series 2023A-1 bonds and series 2023A-2 bonds that will provide about $30 million in new capital to the debtors and the exchange of the outstanding original bonds in the total principal amount of $109.19 million for new series 2023B bonds in the approximate amount of $92.81 million.

The debtor will also obtain a sponsor contribution of $13.5 million in cash, as well as additional liquidity support from the sponsor in the form of an unfunded $6 million liquidity support agreement and about $20 million in deferred sponsor fees.

The plan sponsor is Lifespace Communities, Inc., the sole member of each of the debtors.

The plan also provides for a restructuring of Edgemere’s existing lease obligations under a ground lease dated Nov. 5, 1999 between landlord Intercity Investments Properties, Inc. and Edgemere in one of the following ways: equitable subordination of the landlord’s rights and claims so that the landlord is entitled to payment of no more than $20 million in total for the remaining term of the lease; or an extension of the term of the lease by at least 25 years and reduction of the annual rent obligation to no more than $2.2 million per year.

In addition to reducing the outstanding debt on account of the original bonds and increasing liquidity for working capital and capital expenditure needs, the plan also provides for the assumption of all residency agreements and the satisfaction and payment in full of all outstanding, non-contingent refund obligations due to former residents.

The plan also permits the continuation of Edgemere’s business as an “entrance fee” continuing care retirement community.

Under the plan, allowed administrative claims, the debtor-in-possession facility claims, allowed priority tax claims, allowed other priority claims, allowed other secured claims and allowed refund obligations will be paid or satisfied in full.

Holders of the class 2 series 2015 bond claims and class 3 series 2017 bond claims will exchange the then outstanding bonds for a pro rata share of the principal amount of the series 2023B bonds.

There will be no distribution to holders of general unsecured claims.

Residents who are not yet owed refunds will be paid in the ordinary course of business as the refund obligations come due under the terms of the applicable residency agreements.

The Dallas-based luxury senior living community filed Chapter 11 bankruptcy on April 14 under case number 22-30659.

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