Edgemere’s Financial Restructuring

On April 14, 2022, Edgemere took decisive action to best position the community for the future and protect the interests of its stakeholders by initiating a voluntary, comprehensive restructuring through the Chapter 11 process in the U.S. Bankruptcy Court for the Northern District of Texas. Listed below are a number of milestones in Edgemere’s Chapter 11 Case. This list does not encompass everything that has happened throughout the Chapter 11 Case, but simply provides a high-level overview of the more notable milestones that have occurred thus far (as well as what is upcoming). More information can be found by reaching out to our community directly, or contacting KCC by emailing EdgemereInfo@kccllc.com or calling (866) 967-0269 for U.S. calls or (310) 751-2669 for international calls.

PAST MILESTONES

  • April 14, 2022 – Edgemere filed for Chapter 11 protection.
  • April 18, 2022 – The Court heard Edgemere’s First Day Motions, requesting orders that would, among other things, allow Edgemere to continue to honor commitments to residents and team members during the Chapter 11 process. The First Day Motions were subsequently granted, on interim and/or final bases.
  • June 2, 2022 – The Patient Care Ombudsman assigned to Edgemere’s Chapter 11 Case filed her first interim report discussing the Patient Care Ombudsman’s first site visit at the community. The report was consistent with Edgemere’s reputation as a top tier community and reflective of Edgemere’s high-quality care for residents and excellent maintenance of the facility.
  • June 10, 2022 – Edgemere received Court approval for $10.1 million in debtor-in-possession financing, demonstrating continued positive momentum and further supporting the community’s commitment to uphold resident care and operate as usual.
  • July 21, 2022 – Anyone (other than governmental agencies) who believed they were owed money by Edgemere prior to its Chapter 11 filing on April 14, 2022, must have filed a claim asserting the amount they believed they were owed and the basis for the asserted claim. This deadline was considered and is referred to as Edgemere’s “Bar Date.”
  • August 2, 2022 – The Patient Care Ombudsman filed the second interim report describing her second site visit, and this report is consistent with the tone of the Patient Care Ombudsman’s first report.
  • August 3, 2022 – Edgemere filed its initial Disclosure Statement and Plan of Reorganization (“the Plan”) with the approval and support of its Bond Trustee and Lifespace Communities, Inc.
  • August 11, 2022 – Edgemere filed an Exclusivity Motion, which would enable the community to have additional time to file an updated Plan of Reorganization and, during the extended “Exclusivity Period”, other parties would be prohibited from proposing separate and competing Chapter 11 plans.
  • September 29, 2022 – The Bankruptcy Court ruled on the Exclusivity Motion, providing Edgemere with additional time to file an amended Plan by October 26, 2022. At this hearing, Judge Larson also expressed apparent support for Edgemere, stating “This Court’s not going to shut down the Edgemere. I just want to say that. I realize every party in here has to do what it has to do. It has to advocate for its clients. But there is absolutely no way that this Court is going to leave these residents without a substantial safety net. And when I say a safety net, I mean a plan. And I don’t necessarily mean a capital “P” plan of reorganization, but there’s at least going to be a little “P” plan of what the go-forward strategy is for these residents… I just wanted to clear the air and divest people of the thought that at any time soon the Edgemere is just closing down. Because it’s not.”
  • October 4, 2022 – The Patient Care Ombudsman filed the third interim report describing her third site visit, and this report is consistent with the tone of previous reports.
  • October 26, 2022 – Status Conference regarding Exclusivity, Edgemere’s Amended Plan of Reorganization, and any additional Chapter 11 plans to be proposed by authorized parties, including the Bond Trustee and Lifespace Communities, Inc.

FUTURE MILESTONES

  • To be determined: Hearing on Edgemere’s Disclosure Statement (as may be amended or modified) and proposed Solicitation Procedures and Confirmation Process.
  • To date, Edgemere has not requested approval of solicitation procedures. Following the October 26th Status Conference, Edgemere expects to have guidance from the Court as it relates to a plan confirmation process and will file a motion for approval of the solicitation process. Upon approval of such a motion, solicitation can commence. Essentially, solicitation is a process by which Edgemere distributes its Chapter 11 plan, requesting votes of acceptance from creditors entitled to vote in Edgemere’s Chapter 11 Case. If the Plan does not receive the sufficient amount of accepting votes, Edgemere will continue working alongside its advisors and legal counsel to create a Plan that will be most beneficial for stakeholders. If Edgemere receives the sufficient amount of accepting votes, Edgemere will propose the Plan, supported by its balloting report and confirmation papers, to the Bankruptcy Court for consideration. A confirmation hearing will be set where the Court will hear from counsel with respect to the Plan and will be asked to confirm (or approve) the Plan through the entry of a confirmation order. Should the Court approve the Plan, Edgemere will move forward and emerge from Chapter 11 protection on the terms set forth in the approved Plan.