Edgemere’s Chapter 11 plan effective as of June 13

By Sarah Lizee

Olympia, Wash., June 21 – Northwest Senior Housing Corp., which does business as Edgemere Dallas, had its Chapter 11 plan go into effect on June 13, according to an order filed Tuesday with the U.S. Bankruptcy Court for the Northern District of Texas.

The plan, which was confirmed on April 7, was filed jointly with UMB Bank, NA as bond trustee and debtor-in-possession lender, as previously reported.

At the time of confirmation, the court also approved the sale of the debtor’s luxury senior living community to stalking horse bidder Bay 9 Holdings LLC for $48.5 million.

Under the plan, assets not sold through the stalking horse agreement will be transferred to a litigation trust to be liquidated for the benefit of litigation trust interests.

The plan will convert the senior community into a rental model.

The plan will also include a settlement of all potential estate, trustee, DIP and resident claims against Lifespace in exchange for a $16.5 million payment to the trustee on the effective date for distribution in current holders of the original bonds, and annual payments made into a residents trust, which will be used to pay participating residents for claims relating to their residency agreements.

In exchange for the Lifespace residency contributions and the release provided under the plan, Lifespace will be entitled to a pro rata distribution of litigation trust assets.

Holders of other priority claims will receive payment in full in cash.

Holders of bond claims are estimated to receive distributions of about 40% of their bond claims.

Holders of general unsecured claims will receive a pro rata share of the litigation trust proceeds. They are expected to receive distributions ranging from zero to 50% of their claims, depending on the outcome of litigation with landlord Intercity Investment Properties, Inc. and the liquidation of the other litigation trust assets.

Holders of former and current resident claims who opt out of the Lifespace settlement will receive a general unsecured claim. Those who do not opt out will receive cash from the residents trust in an amount equal to their refund claim.

Intercompany claims held by Lifespace will be waived and released with no distribution.

The interests held by Lifespace will be terminated.

The Dallas-based luxury senior living community filed Chapter 11 bankruptcy on April 14, 2022 under case number 22-30659.

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