Edgemere Drops Restructuring Plan, Supports Proposed Sale
Edgemere will back a plan by debt holders that includes selling the luxury retirement community’s assets.
Edgemere filed for bankruptcy in April, with its liabilities estimated between $100 million and $500 million.
Initially, there were two competing plans — one from Edgemere and one from the debt holders.
Edgemere dropped its original plan, which depended on winning a lawsuit against its landlord, a reduction in rent payments, and a cash infusion from its parent company, Lifespace.
The debt holders’ initial plan called for selling “substantially all” of the retirement community’s assets for $48.5 million to a new owner, who would continue operating the facility in the 8500 block of Thackery Street off Northwest Highway.
New and current residents would be offered new monthly rental agreements, as opposed to the entrance fee model, per the plan.
Notably, as part of the new plan, LifeSpace announced its intent in December to contribute up to $143.4 million that would go in part toward entrance fee refunds for current and former Edgemere residents. Former residents are owed $37 million, and current residents’ deposits total $107 million.
“Lifespace is stepping in to fill this gap and fund the payment of these refunds that would not otherwise be paid through the restructuring plan,” LifeSpace CEO Jesse Jantzen said. “This is truly a rare and extraordinary circumstance. Accordingly, Lifespace feels compelled by its long-standing charitable mission and deep commitment to support its residents to deliver an extraordinary solution to mitigate the impact felt by current and former residents as a result of this unique and challenging situation.”
Edgemere’s original plan involved a $20 million cash infusion from Lifespace.
The new development came shortly before a $10 million emergency loan was due.
Lifespace, a nonprofit based in Dallas and Iowa, operates 17 communities in seven states and has offered to continue managing Edgemere through a transition period to a new owner.
Jeremy Johnson, an attorney for the retirement community, says the confirmation hearing was moved to Feb. 21.
The proceedings have been contentious from the start, with Edgemere suing its landlord, Intercity Investments, simultaneously with its bankruptcy filing last April and alleging in court documents that Intercity was working with Kong Capital to terminate its 50-plus-year ground lease.
