Henry Ford Village files Chapter 11 bankruptcy in Michigan

By Sarah Lizee

Olympia, Wash., Nov. 2 – Henry Ford Village, Inc. filed Chapter 11 bankruptcy Wednesday in the U.S. Bankruptcy Court for the Eastern District of Michigan.

Chief restructuring officer Chad J. Shandler said in a declaration that while Henry Ford Village has struggled under an entrance fee business model and its debt load, the company’s financial situation became progressively worse through the years as the entrance fee liabilities to former residents continued to grow.

“In addition to a change in management companies and implementing expense reduction measures, HFV aggressively sought relief from its long-term debt obligations through a debt refinancing scheduled to close earlier in 2020, when the financial markets were more favorable,” Shandler said.

“The 2020 refinancing – like so many other things – was upended by the Covid-19 pandemic and not completed. Hence, in addition to its endemic challenges, Covid-19 became an additional and significant contributing factor compromising HFV’s financial viability.”

Shandler said the debtor will seek to run a marketing process while in Chapter 11 to find a strategic or financial acquirer or sponsor to put the company on a solid financial footing to provide for the residents and patients that rely upon the debtor now and into the future.

Henry Ford Village said it believes it has sufficient cash collateral to continue operations during a potential sale process over the next 13 weeks but will likely require additional liquidity to complete the case.

The debtor filed a motion seeking to use the cash collateral of UMB Bank, NA as bond trustee, or any other party that may assert an interest in cash, revenue or other funds of the debtor constituting cash collateral, although the company said it is unaware of any such party.

The company listed $50 million to $100 million in assets and $100 million to $500 million in liabilities.

The company’s largest unsecured creditor is Life Care Cos. LLC, based in Des Moines, with a $2.79 million contract claim. No other creditors were listed with unsecured claims of at least $1 million.

Henry Ford Village is a senior living community based in Dearborn, Mich. The Chapter 11 case number is 20-51066.

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