Lifespace Communities will fund up to $143.3 million of the restructuring plan for its Edgemere continuing care retirement community in Dallas, the company said Monday.
The CCRC filed for bankruptcy in April, citing challenges from managing the effects of the COVID-19 pandemic and responding to a winter storm in February 2021. Earlier this month, Edgemere withdrew a proposed restructuring plan, even as a lawsuit continues against its landlord, InterCity Investments, to reduce past rent payments, including late fees.
Under a revised restructuring plan, Lifespace will play a large part in the bankruptcy agreement, Jeremy Johnson of Polsinelli, an attorney for Edgemere, previously told the McKnight’s Business Daily. Some of the money that Lifespace invests will go to bondholders, and some will go to residents, he said. Former residents reportedly are owed $37 million, whereas current residents’ deposits total $107 million.
According to a statement from Lifespace, the proposed restructuring plan contemplates the sale of Edgemere to a new buyer that will transition the community to a rental community from a Type A entry-fee community. This transition will require former and current residents’ life care agreements to be terminated and replaced by new rental agreements. As a result of the termination of the agreements, current and former residents would not otherwise receive the entrance fee refunds owed to them unless Lifespace helps, company leadership said.
“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 President and CEO Jesse Jantzen said. “This contribution is consistent with Lifespace’s core mission of doing right by its residents.”
Johnson previously said that he expects the bankruptcy to be finalized in mid-January.
The nonprofit Lifespace, based in West Des Moines, IA, operates 17 communities in seven states. Six of them are in Texas.
