Edgemere’s plan sponsor says landlord’s cure statement chilling bids

By Sarah Lizee

Olympia, Wash., Jan. 3 – The plan sponsor for Northwest Senior Housing Corp., which does business as Edgemere Dallas, said landlord Intercity Investment Properties, Inc.’s cure statement is disrupting the sale process for the company’s assets, according to documents filed with the U.S. Bankruptcy Court for the Northern District of Texas.

UMB Bank, NA, as bond trustee, DIP lender and plan sponsor, asked the court to strike the asserted capex cure amount portion of the landlord’s cure statement, which asserts that nearly $64 million is “due and payable for the Edgemere to cure the lease.” That amount significantly exceeds the current purchase price for the Edgemere community – which is $48.5 million under a stalking horse agreement with Bay 9 Holdings LLC.

UMB said the cure statement is having a “chilling effect” on the sale process.

Some parties have already reported concerns that the significant obligations under the cure statement aren’t documented in the lease and, if the cure statement is determined to be accurate, they’ll withdraw from the bidding process.

UMB said most of the landlord’s asserted cure amount is unrelated to an existing default under the lease.

The plan sponsor said the landlord’s goal remains the same – to “sabotage the community and acquire the property for no consideration.”

The purchased assets under the stalking horse agreement include the ground lease, the seller’s interest in the land and existing improvements, the accounts receivable, equipment and inventory.

The break-up fee is $1,455,000 and the expense reimbursement amount is $200,000.

Qualified bids must be $100,000 in excess of the stalking horse bid, the break-up fee and the reimbursement amount.

Bids are due by Jan. 13 with an auction date of Jan. 17.

Objections to the sale transaction are due by Jan. 20.

The sale confirmation hearing will be held on Jan. 26.

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

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