Thu 08/19/2021 09:04 AM
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Relevant Documents:
Voluntary Petition
First Day Declaration
Plan of Reorganization
Disclosure Statement
Motion to Approve Plan Support Agreement
Cash Collateral Motion

To view the relevant documents above as well as our First Day team's coverage of all U.S. chapter 11 cases filed since 2012 with over $10 million in liabilities including the Kingswood Senior Living Community chapter 11 filing request a trial here: https://reorg.com/trial

Kansas City United Methodist Retirement Home, Inc. dba Kingswood Senior Living Community, a Kansas City, Mo.-based owner and operator of a continuing care retirement community, or CCRC, filed for chapter 11 protection on Wednesday, Aug. 18 in the Bankruptcy Court for the Western District of Missouri. The company reports $10 million to $50 million in assets and $50 million to $100 million in liabilities. The debtor is represented by McDowell, Rice, Smith & Buchanan in Kansas City, Mo. The case number is 21-41049. The case has been assigned to Judge Cynthia A. Norton.

According to the first day declaration of Ross Marine, chairman of the debtor’s board, the debtor filed to restructure its debt related to Series 2016 revenue bonds issued by the Industrial Development Authority of the City of Kansas City, Missouri on a consensual basis with bond trustee UMB Bank through the issuance of Series 2021 bonds. Pursuant to the plan, the “existing Series 2016 Bonds, which currently total $51,770,000 outstanding principal amount, will be exchanged for new Series 2021B Bonds and Series 2021D Bonds. Holders of the existing Series 2016 Bonds will receive in exchange for such bonds (a) ratable shares of Series 2021B Bonds in the principal amount of $27 million, and (b) ratable shares of Series 2021D Bonds in the principal amount of $12.05 million.”

The debtor also seeks to assume all residency agreements and pay all prepetition and administrative claims in full. Further, the debtor requests the use of cash collateral of bond trustee UMB Bank. Along with a plan of reorganization and disclosure statement, the debtor has filed a motion to approve a plan support agreement entered into with the “preponderant majority” of bondholders, providing for a bond restructuring that the debtor says “will provide additional capital for Debtor’s operations and thereby stabilize Debtor’s liquidity position” and “promote the long-term financial stability of Debtor.”

In addition to the bond debt, the debtor discloses more than $4 million in unsecured nonpriority debt.

The debtor “has experienced increasing financial distress from slowed new occupancies and resulting cash flow shortfalls, causing it to fail to comply with its obligation to pay debt service,” that was “greatly exacerbated by the impact of the COVID-19 pandemic,” leading to default under the Series 2016 bonds, the DS says. The debtor entered into a forbearance agreement with the bond trustee, and ultimately entered into the plan support agreement, paving the way for the chapter 11 filing.

Reorg First Day will provide a full summary once the first day briefing is complete.
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