Friendship Village of Schaumburg files Chapter 11 liquidation plan

By Sarah Lizee

Olympia, Wash., Oct. 18 – Evangelical Retirement Homes of Greater Chicago, Inc., which does business as Friendship Village of Schaumburg, filed a Chapter 11 plan of liquidation and disclosure statement on Wednesday with the U.S. Bankruptcy Court for the Northern District of Illinois.

A disclosure statement hearing is scheduled for Nov. 22.

The plan contemplates the sale of substantially all the debtor’s assets.

The company has a stalking horse bid with IL CCRC LLC. The purchase price under the stalking horse agreement is $83.11 million.

Proceeds from the sale will be used to pay allowed administrative expense claims, priority tax claims, professional fee claims, DIP facility claims, and U.S. trustee fees.

Under the plan, other priority claims and other secured claims are unimpaired.

The estimated recoveries to class 2 bond claimholders, class 4 deficiency claimholders and class 5A participating current resident claims are to be determined.

The estimated amount of claims in class 2 is $131.6 million, and the estimated amount in class 5A is $77.89 million. The amount of deficiency claims is to be determined.

Holders of class 5B non-participating current resident claims, class 7 general unsecured claims, class 8 intercompany claims and class 9 interests are expected to receive no recovery.

Class 7 will include any rejection claims that arise as a result of a holder of a current resident claim electing not to consent to be bound by the terms of a modified residency agreement, causing their residency agreement to be rejected.

The proposed sale transaction provides for the purchaser to contribute at least $2 million to be held in escrow or trust for the benefit of holders of class 6 former resident claims. The plan administrator will cause the former resident proceeds fund to be distributed pro rata to holders of former resident claims.

The company noted that it has not completed its review of all claims in the case.

The Schaumburg, Ill.-based retirement community filed bankruptcy on June 9 under Chapter 11 case number 23-07541.

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