Covenant Living seeks to buy CCRC which filed for Chapter 11 bankruptcy
The nonprofit for the elderly Covenant Living has entered into a purchase agreement to purchase a CPAB in New Hampshire which recently filed for Chapter 11 bankruptcy.
The organization behind the continuing care retiree community (CCRC), The Prospect-Woodward Home, has filed for Chapter 11 bankruptcy protection in New Hampshire, where the community is located.
Covenant is looking to become a stalking horse bidder in the community and participate in a court-supervised auction that could result in higher bids or bids, according to a press release from the Skokie-based operator, in Illinois. Covenant is one of the largest nonprofit seniors’ organizations in the United States with a portfolio of 18 communities in nine states.
Covenant would pay $ 33 million to the community under the deal, according to court documents.
The 222-unit CPAB, Hillside Village, was under financial strain last year due to restrictions to protect against the Covid-19 pandemic.
“All of our efforts during the many months of mandatory quarantine have been directed towards protecting residents from the devastating and contagious virus,” said Nancy Crawford, who chairs the Hillside Village board of directors, in a press release. “At the same time, security measures prevented us from opening the community to new residents… [and] As we faced the resulting financial challenges, we concluded that the community needed a new owner / sponsor who would honor our commitments to our residents and have additional capital to invest.
Prospect-Woodward Home also discovered “significant construction flaws” when the community opened in 2019, which contributed to its financial difficulties, according to its Chapter 11 bankruptcy filing.
The organization alleges that the community’s original contractor performed “substandard and incomplete work” and hired another contractor to do around $ 570,000 of construction and remediation work on the community’s balconies, according to the organization. court documents.
The community’s estimated liability is between $ 50 million and $ 100 million, with only $ 10 million to $ 50 million in assets, depending on the record. Grandbridge Real Estate Capital is listed as leading the hunting horse tendering process.
Recommended SHN + exclusives
Hillside Village originally announced in February that it was looking for a buyer and would likely file for Chapter 11 bankruptcy, according to local news publication The Keene Sentinel. Stuck in financial distress fueled by Covid, the community also reportedly missed the payment of a $ 2 million bond last winter and was the target of a lawsuit for unreimbursed entry fees earlier this year.
Covenant has made growth a goal in recent months, according to President and CEO Terri Cunliffe.
“We are always open to acquisitions and affiliations and our growth and expansion is always an area of significant focus,” Cunliffe said in an interview with Senior Housing News Changemakers earlier this year. “I think after Covid our consumer will be looking for a different product in the health field.”