CASE SUMMARY: Florida Assisted Living Communities The Bridges and Coral Landing File to Pursue Sale or Reorganize

Florida Assisted Living Chapter 11s:

Relevant Documents:
Voluntary Petition - The Bridges
Voluntary Petition - Coral Landing
Case Management Summary - The Bridges
Case Management Summary - Coral Landing
Cash Collateral Motion - The Bridges
Cash Collateral Motion - Coral Landing
First Day Hearing Notice

The chapter 11 cases were precipitated by foreclosure and receivership actions commenced by CPIF Lending LLC and U.S. Bank, the bond trustee and master trustee under the mortgages with $23 million owed secured by the debtors’ facilities. In The Bridges foreclosure case, the state court entered an order appointing a receiver on Jan. 27, and in the Coral Landing foreclosure case, the court has yet to set a hearing or rule on the appointment of a receiver. The debtors say that they believe that a receiver would be “detrimental to the staff, resident population and the going concern value of the Debtor’s business and other assets.” Consequently, the debtors filed the chapter 11 cases with the goal of preserving the value of their estates “until either an orderly sale of the Debtors’ assets can occur or a reorganization occurs.”

The debtors say that any allegations by CPIF Lending or U.S. Bank regarding patient care deficiencies “are disputed and Debtors would demand evidence to support such a baseless allegation.”

The case would be funded with the use of cash collateral, to which the secured lenders have yet to consent.

The first day hearing has been scheduled for Wednesday, Feb. 2, at 10 a.m. ET.

On a consolidated basis, the company’s prepetition capital structure includes:

• Secured debt:
  
  
  
  • CPIF Lending/U.S. Bank mortgage: $23.2 million
  
  
  
  


• Unsecured debt:
  
  
  
  • The Bridges: $21.1 million
  
  
  • Coral Landing: $19.3 million
  
  
  
  


• Taxes:
  
  
  
  • Internal Revenue Service:
    
    
    
    • The Bridges: $2.4 million plus a $132,206 penalty
    
    
    • Coral Landing: $805,469 plus a $39,791 tax penalty
    
    
    
    
  
  
  • County taxes:
    
    
    
    • The Bridges/Hillsborough County: $148,113
    
    
    • Coral Landing/St. Johns County: $36,191
    
    
    
    
  
  
  
  


• Equity: The debtors’ members own the following amount of the company’s interests: U.S. Lifestyles (45%), IMH Healthcare LLC (30%), Venice Avenue Investors LLC (15%), BVM Management Inc. (10%) (these members are entitled to receive distributions of surplus cash, but debtors have not had surplus cash to distribute over 12 months before the petition date).

The prepetition mortgage, which is undersecured according to the debtors, is cross-collateralized between the debtors’ two facilities.

The Coral Landing debtor has $2,084 in cash, $27,556 in accounts receivable, $8,000 in utility security deposits and $20,000 in FF&E, plus an internet domain name and website valued at $2,000. The Bridges debtor has assets consisting of one-third of the real property located in Riverview, Fla. valued at $3 million, $2,347 in cash, $140,097 in accounts receivable, $5,000 in utility security deposits and $70,500 in FF&E, plus an internet domain name and website valued at $2,000.

Pallardy LLC purchased two-thirds of The Bridges’ real property (including all community amenities and approximately 75% of the licensed beds) in a September 2021 tax deed sale, and thereafter filed a quiet title action. The Bridges says it is not aware of legal grounds to challenge the Pallardy claim; “however, CPIF and U.S. Bank are contesting the tax deed sale and the quiet title action.” To the extent CPIF or U.S. Bank prevail, title would revert back to the debtor, which currently owns one-third the property. The Bridges is “working towards obtaining” a short-term lease with Pallardy.

According to the company’s case management summary, The Bridges intends to file a motion for mediation, a 363 sale motion, a motion to approve either a lease or occupancy agreement with Pallardy and a chapter 11 plan.

The debtors are represented by Johnson Pope Bokor Ruppel & Burns in Tampa. The case has been assigned to Judge Michael G. Williamson (case no. 22-00345).

Background

BVM The Bridges operates an 87-bed/69-unit assisted living facility known as The Bridges Assisted Living & Memory Care and The Claridge House at the Bridges in Riverview, Fla. The average census is 70 residents. The facility is licensed up to 101 beds within its 69 units.

BVM Coral Landing operates a 58-bed/49-unit assisted living and memory care facility known as Coral Landing located in St. Augustine, Fla. The average census is 46 residents, and the facility is licensed up to 60 beds within its 49 units.

The debtors have operated both facilities since 2014.

Many residents and/or their families are willing to pay extra for private rooms, resulting in the conversion of double occupancy into private rooms, the case management summary explains, which has reduced the number of available beds at each of the facilities.

The debtors are affiliated with Americare Property Group LLC, which filed chapter 11 in April 2021, reporting $500,000 to $1 million in assets and $1 million to $10 million in liabilities. “After successfully resolving all matters in the case, Americare obtained a dismissal of its Chapter 11 case,” the BVM petitions state. The Americare case was dismissed on July 22.

The Bridges’ total gross income in 2020 and 2021 was approximately $4 million and $3.7 million, respectively, and gross income from Jan. 1 through the petition date is approximately $161,800. Coral Landing’s total gross income in 2020 and 2021 was approximately $1.3 million and $1.2 million, respectively. Gross income from Jan. 1 through the filing date is approximately $77,207.

The debtors’ largest unsecured creditors are listed below: