Nonprofit Turnaround of the Year - Mayflower Communities, Inc., and Tarrant County Senior Living Center, Inc.
Rachel Nanes, DLA Piper LLP (US)
Louis Robichaux IV, Ankura Consulting Group LLC
Andrew Turnbull, Houlihan Lokey Capital, Inc.
David Kliewer, Cushman & Wakefield
John Chesley, Ropes & Gray LLP
Daniel Bleck, Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
James Banister, Ice Miller LLP
Keith Allan, Larx Advisors, Inc.
About the Turnaround:
Barrington is a not-for-profit corporation that owned and operated a continuing care retirement community (CCRC) and provided a wide range of services to more than 250 elderly residents in Carmel, Indiana. Barrington and its largest creditor, UMB Bank, N.A., as bond trustee, were parties to a series of bond documents secured by liens on substantially all of Barrington's assets. Prior to the petition date, Barrington defaulted on its payment obligations under the bond documents. As a result, the bond trustee commenced a receivership action. Barrington, to maintain control over its operations for the benefit of its residents and creditors, commenced a Chapter 11 case in U.S. Bankruptcy Court for the Northern District of Texas. Shortly after filing, Barrington and the bond trustee reached a consensual resolution that provided for, among other things, a sale of the debtor’s facility. As a result of the resolution, Barrington was sold to another not-for-profit CCRC operator for $61 million, and all resident obligations were honored.
Incorporated in 2006, Stayton is a not-for-profit corporation that has built a best-in-class CCRC in Fort Worth, Texas, dedicated to giving its residents an enriching lifestyle. As has become common in the senior living industry and in particular among CCRCs, Stayton has historically faced financial challenges, the effect of which threatened Stayton’s ability to honor its long-term debt obligations and maintain its operational stability.
To address its financial condition, Stayton engaged in extensive, arm’s-length negotiations with: (a) SQLC; (b) Lifespace Communities, Inc., Stayton’s current not-for-profit sole corporate member; (c) UMB Bank, N.A., as successor bond trustee and successor master trustee; and (d) the holders of at least 67% of outstanding aggregate principal amount of all bonds issued, with a goal of achieving a consensual restructuring centered on a refinancing of its existing tax-free municipal bond debt totaling approximately $105 million. This was to be accomplished through a prepackaged restructuring to minimize the costs of the Chapter 11 case and the impact on the debtor’s business.
With overwhelming support from its bondholders, Stayton commenced its Chapter 11 case in the Northern District of Texas and confirmed its plan of reorganization in just 45 days. As a result of plan confirmation, Stayton closed on the refinancing transaction, all obligations to unsecured creditors were paid in full, and resident contracts were assumed. Stayton achieved its goal of ensuring its long-term ability to honor its debt obligations and continue its charitable mission to provide for the health and well-being of its residents.