A nonprofit Texas-based retirement community operator filed for Chapter 11 bankruptcy on Monday to deal with its troubled debt and sell its assets.
Christian Care Centers, which operates three senior living communities in the Dallas area, has $50.17 million of revenue bonds outstanding and owes $3.11 million in accrued and unpaid interest, according to documents filed in U.S. Bankruptcy Court for the Northern District of Texas.
North Texas Benevolent Holdings has agreed to purchase the three communities for $44.25 million and lease them to affiliates of Atlanta-based nonprofit Boncrest Resource Group as their operator, resolving “the financial uncertainty for CCC&S that the COVID-19 pandemic exacerbated,” Christian Care said in a statement.
Because the sale will not likely pay bondholders in full, Christian Care turned to bankruptcy, the company’s representatives said in an emailed response to questions.
Since 2018, Christian Care has failed to meet certain bond covenants, defaulted on payments, and entered into forbearance agreements with bond trustee UMB Bank, according to a court filing. In 2021, it hired a chief restructuring officer and also tapped Houlihan Lokey Capital, Inc. as its investment banker “in accordance with the conditions and milestones in the forbearance agreement.”
The debt was sold through the Mesquite Health Facilities Development Corporation.
“Over the past several years, Christian Care has taken significant steps to decrease costs and spending,” the company's representatives said. “We have explored all viable options to secure a bright future for our facilities and to preserve access to needed health care services in the communities we serve. Ultimately, it became clear that this was the right path.”
Christian Care said the sale of its properties is expected to be completed in August or September through a court-approved process.
It added it has secured debtor-in-possession financing to fund the communities through the bankruptcy.
An initial hearing in the bankruptcy case is scheduled for Wednesday and a meeting with creditors is set for June 29.
Founded in 1947, Christian Care provides independent living, assisted living, memory care, and skilled nursing at its facilities.
