Mon 09/20/2021 12:32 PM
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Relevant Documents:
First Amended Plan (Blackline)
First Amended DS (Blackline)
Class 5 Claimants’ Motion to Continue Hearing

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The Buckingham Senior Living debtor filed a first amended plan and disclosure statement on Sunday, Sept. 19, which reflects a number of changes previously requested by the official committee of unsecured creditors. The debtor says that the amended plan “could improve the Debtor’s liquidity and working capital by as much as $5 million to $7 million.” The plan is supported by the UCC and bondholders holding approximately 69% of the aggregate amount of the debtor’s secured bond, according to the DS.

Although the DS approval hearing is set for Wednesday, Sept. 22, at 10:45 a.m. ET, the ad hoc committee of Class 5 “Pre-Petition Refund Queue Claimants” filed a motion over the weekend requesting an adjournment of the DS hearing until Oct. 5. The ad hoc committee of Class 5 claims argues that its members and professionals have not had an opportunity to review the amended plan prior to its filing and that all the ad hoc committee’s “efforts to participate have been rebuffed with the retort that the parties have finished negotiating the Amended Plan.” The adjournment request has been set for hearing on the same date as the DS.

As with the prior iteration of the plan, the debtor’s secured bondholders would exchange their secured bond claims for a pro rata share of the $140.34 million of new Series 2021B bonds and trade claims would be paid in full. Current resident claims would be paid in full or would otherwise remain unimpaired. The plan still anticipates $28.5 million in new funds from the issuance Series 2021A bonds that would be used to improve the facility, address “immediate deferred capital needs” and pay any shortfall of allowed trade claims not otherwise paid by cash on hand. However, a portion of such funds (not to exceed $2.37 million) would now be allocated to provide an initial distribution to the holders of the resident refund claims.

Unlike the earlier plan, the first amended plan contemplates the creation of a litigation trust for the benefit of holders of resident refund claims and general unsecured claims. The litigation trust would be funded with $50,000 in available cash and its assets would include the proceeds of causes of action against Senior Quality Lifestyles Corp. and Seniority Inc. as well as the debtor’s nonreleased avoidance actions.

Under the amended plan, refund claims of “Charter Residents” who have triggered refund obligations within 180 days of departing the community would no longer be separately classified from other resident refund claims and all pre-effective date resident refund claims would be classified as Class 4 “Pre-Effective Date Refund Queue Claims.” Class 4 claims would be entitled to an initial cash distribution on the effective date (equal to the amount that would have been allocated to satisfy the former separately classified charter resident claims) with the remainder to be paid in full over a five-year period. Holders of Class 4 and Class 7 general unsecured claims would be entitled to receive their pro rata share of litigation trust proceeds.

The plan does not provide an explanation as to how the litigation trust proceeds would be allocated between the holders of Class 4 and Class 7 claims.

Charts of the amended plan’s classes, along with their impairment status, voting rights and projected recoveries, are shown below:
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The amended plan sets forth the following classification of and proposed distributions to holders of allowed claims and interests (with changes from the previous plan in bold):

  • Class 1 - Priority non-tax claims: At the election of the reorganized debtor, payment of cash in full (to be paid out of available cash or if available cash is insufficient, then from proceeds of the Series 2021A bonds) or such other agreed treatment to render the claim unimpaired.

  • Class 2 - Secured bond claims: Allowed in the aggregate principal amount of $140.3 million (exclusive of costs and expenses of the trustee and its professionals). Holders of existing Series 2007, Series 2014 and Series 2015 bond claims would exchange their outstanding bonds for a pro rata share of Series 2021B bonds issued in the aggregate principal amount of $140.3 million.

  • Class 3 - Miscellaneous secured claims: At the election of the reorganized debtor (with the prior written consent of the bond trustee), treatment in accordance with Bankruptcy Code section 1124 as may be determined by the bankruptcy court, payment in full in cash, delivery of the collateral securing the claim and “paying any interest fees, costs and/or expense required to be paid under Bankruptcy Code section 506(b)” or “providing such Holder with such treatment in accordance with Bankruptcy Code section 1129(b) as may be determined by the Bankruptcy Court.”

  • Class 4 - Pre-effective date refund queue claims: As noted above, classes 4 and 5 under the previous plan have been merged into one class to include all pre-effective date resident refund claims. Holders would receive (i) pro rata share of the “Initial Queue Payment” on the effective date (not to exceed $2.37 million), (ii) pro rata share of litigation trust proceeds and (iii) pro rata cash payments made semiannually to the extent that on such semiannual dates the reorganized debtor has operating cash in excess of 135 days’ cash on hand until such time as the allowed prepetition refund queue claims are paid in full. The previous plan had a 150 days’ cash on hand funding requirement.

  • Class 5 - Current resident claims: Unaltered and unaffected by the plan; current residence agreements assumed by debtor and claims paid in ordinary course.

  • Class 6 - Trade claims: Payment in full in cash, to be paid from the debtor’s available cash, or if available cash is insufficient, any shortfall would be paid from the proceeds of the Series 2021A bonds.

  • Class 7 - General unsecured claims (including secured bonds deficiency claim and “any claim of a Resident (under such Resident’s Residence Agreement or otherwise), except for a Refund Claim”): Pro rata share of the litigation trust proceeds. The previous version of the plan contemplated an undetermined cash distribution on the effective date. Holders of secured bond claims would receive no distribution on account of their secured bonds deficiency claim but would have the right to vote such claims in Class 7.

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