Park Place of Elmhurst bond borrowers file Chapter 11 bankruptcy cases

By Caroline Salls

Pittsburgh, Jan. 19 – Park Place of Elmhurst Project Illinois Finance Authority revenue bond borrowers Timothy Place, NFP and Christian Healthcare Foundation, NFP filed Chapter 11 bankruptcy on Jan. 17 in the U.S. Bankruptcy Court for the Northern District of Illinois to implement a previously announced restructuring transaction, according to a notice from bond trustee UMB Bank, NA.

Restructuring terms

As previously reported, under the proposed restructuring terms:

• Issuer Illinois Finance Authority will issue new series 2016 bonds in exchange for outstanding series 2010 bonds;

• Holders of series 2010A, series 2010B and series 2010C bonds will receive a share of the principal amount of series 2016A bonds in the total principal amount equal to 85% of the then outstanding bonds, a share of series 2016C bonds in the total principal amount equal to 15% of the then outstanding bonds and payment in full in cash on account of its allocable share of unpaid interest through the date immediately preceding the completion of the restructuring;

• Holders of the series 2010D bonds will exchange their bonds for a share of the principal amount of series 2016B bonds equal to 85% of the then outstanding series 2010D bonds, a share of series 2016C bonds equal to 15% of the then outstanding series 2010D bonds and payment in full in cash of interest accrued through the date immediately preceding the completion of the transaction;

• The series 2016A bonds will be issued as current paying bonds, bear interest at a rate of 6 3/8% and mature in 2055. They will be subject to optional redemption beginning on the fifth year after the proposed exchange, at a price equal to 102 in year five, 101 in year six and par thereafter;

• The series 2016B bonds will bear interest at a rate of 5 5/8% and mature in 2020. They will be subject to mandatory redemption from entrance fees;

• The series 2016C bonds will bear interest at 2%, payable semiannually, but only from excess cash, and will mature in 2055 and be subject to optional redemption at the option of the borrower, at a redemption price equal to 65% of the par amount outstanding from years one through five, 75% of the par amount outstanding from years six through 10 and 100% of the par amount outstanding thereafter; and

• The proposed restructuring calls for a number of amendments to various operating and financial covenants to reflect the current operating projections of the borrower and the project.

The trustee said the restructuring agreement calls for the company to emerge from bankruptcy within three months of the petition date, with an outside date of April 1.

Bankruptcy case details

Timothy Place and Christian Healthcare requested court approval to use funds on deposit in some operating accounts as cash collateral to fund the project’s operations during the bankruptcy process.

A hearing on the cash collateral use and other customary first-day bankruptcy motions is scheduled for Jan. 20.

According to court documents, Timothy Place and Christian Healthcare both have $100 million to $500 million in assets and debt.

The companies are represented by McDonald Hopkins LLC.

The Chapter 11 cases are being jointly administered under case numbers 16-01336 and 16-01337.

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