A continuing care retirement community (CCRC) with a history of financial woes is slated to change hands, with senior living company LCS poised to buy it.
The community, known as Harborside and previously Amsterdam at Harborside, in March filed for bankruptcy for the third time in nine years, with LCS winning a five-day auction worth $63 million for the community last fall, according to court records and an article published by Newsday.com. A judge approved the sale on Dec. 27, U.S. Bankruptcy Court in Central Islip court records indicate.
But the community’s debt holder, Kansas City based-UMB Bank, has appealed the ruling that approved the transaction to LCS.
In 2021, SHN reported on the continuing care retirement community (CCRC) attempting to restructure $199.5 million in bond debt. The community previously filed for bankruptcy in July 2014 to restructure $220 million in bond debt, replacing the debt with new bonds it attempted to refinance in 2021.
In a court filing at the time, former CEO James Davis noted that the community had a challenging time attracting new residents at the pace needed to manage its debt service requirements.
Two additional bids for the community were not accepted, with Chief Judge Alan S. Trust noting that the LCS bid was the most favorable of the bids since it would have the least impact on residents’ lives, while keeping the community open, the Newsday article states.
The competing bids would have nullified residents’ ownership contracts and transitioned the community to a rental agreement, while the other would have forced residents to relocate after the facility was closed, according to Newsday.
The LCS bid calls for the Des Moines, Iowa-based senior living operator to pay $63 million to bondholders at UMB and an undisclosed amount of refunds be issued to deceased Harborside residents’ families. An additional $40.8 million in refund payments would come from an anticipated sale of a Manhattan nursing home, court records show.
The Harborside is currently home to over 200 residents, of which 96 residents signed a petition in support of the LCS bid, the Newsday article notes.
A spokesperson for LCS issued the following statement to SHN on Tuesday, as the company is moving forward with its transition plans:
“LCS is pleased with Judge Trust’s ruling, and we are actively mobilizing on the regulatory approvals and transition plans needed to complete the Harborside acquisition as soon as possible in 2024,” the statement by LCS reads. “Under LCS ownership the financial challenges of The Harborside can finally be put in the past, and we are happy about what this outcome means for the residents of the community. We can also share LCS will continue operating the Harborside as a CCRC and current residents will have their contracts fully honored without modification.”
LCS manages, owns and operates over 140 senior living communities nationwide and is the nation’s third largest senior living provider.
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