Dallas continuing care retirement community Edgemere now faces a countersuit from its landlord, Intercity Investments, after having sued Intercity and its agent, Kong Capital, alleging breach of contract, promissory fraud, tortious interference with business and contractual obligations, civil conspiracy and equitable subordination, among other claims.
April 14, the CCRC said that it was working to restructure under Chapter 11 bankruptcy protections and seeking court approval for debtor-in-possession financing to help fund and protect its operations during the process. A bankruptcy judge on Monday granted the community’s request to use up to $2 million in cash collateral to continue operating, Law360 reported.
The CCRC’s lawsuit against Intercity also was filed April 14.
The landlord’s countersuit, filed Sunday, alleges that “Edgemere misled new residents about its financial situation between late 2021 and early 2022,” The Real Deal reported Tuesday.
According to the brief filed in the U.S. Bankruptcy Court for the Northern District of Texas, attorneys for Intercity called Edgemere “a sinking ship, taking on water faster than it will ever be able to bail it out.” Further, Intercity’s attorneys said that Edgemere’s lawsuit against the landlord was an “inflammatory ‘kitchen sink’ adversary complaint.”
Intercity said the CCRC misled residents “into a ‘a false sense of security’ about Edgemere’s financial situation by implying that the Edgemere will somehow receive millions of dollars from the landlord upon termination of the lease,” according to the brief.
An Edgemere spokesperson told the McKnight’s Business Daily that “[t]he assertions from our landlord are without merit and an attempt to distract from our ongoing litigation.”