Kingswood Senior Living Community

THIS DEBTOR IS ANOTHER SENIOR COMMUNITY

The Debtor in this bankruptcy case is Kansas City United Methodist Retirement home, Inc., doing business as (“dba”) Kingswood Senior Living Community. It is the latest in what seems to be a string of bankruptcies of senior living communities. The facilities that have been filing for bankruptcy typically provide multiple levels of residential senior care, from community care all the way up to memory care for seniors who are unable to care for themselves.

Commentators who focus on bankruptcy and insolvency have theorized that the trend of senior living communities filing for bankruptcy will escalate through the end of 2021. Obviously, this is a concern for seniors and loved ones of seniors who are living in senior care communities.

If you have any concerns about a friend or family member in a senior care facility, you can reach out to PRLT with questions about the facility where they reside.

CREDITORS ARE MOSTLY SET TO BE PAID IN FULL

In the Kingswood bankruptcy case, a proposed plan of reorganization has already been filed. The Plan, if confirmed, provides for the Debtor to pay all of its creditors, except for certain bondholders, in full. The bondholders who are impaired under the Plan will be paid a percentage up front, while other bond obligations will be reorganized and due dates extended. This will allow Kingswood access to some new, critical capital while lowering its required debt payments in the near term.

The Debtor was able to negotiate the reorganization of its bonds before it filed for bankruptcy. So, it already has approval for the Plan from the bondholders. Since the only creditors who will be harmed by the Plan have already agreed to the proposed reorganization, it is likely that the Kingswood facility will be out of bankruptcy, and its creditors will be paid back, promptly. However, nothing is certain in bankruptcy until the Judge orders relief.

DEBTOR IS WELL ON ITS WAY TO CONFIRMATION

Recently, bankruptcies have seemed to proceed through Court at a breakneck pace. In 2020 and 2021, even extremely large and complex companies have been able to get in and out of bankruptcy in as little as a day. This is even the case where creditors are able to race to Court and get their objection noted before the Judge can act.

All in all, bankruptcy has been tough business for creditors for years. If companies continue to proceed through the bankruptcy process on short notice, it will only get harder for creditors to assert their rights. All small businesses need to be aware and prompt in speaking up if their suppliers seem to be struggling.

In this case, creditors are fortunate that Kingswood has proposed to pay them in full because a confirmation hearing has already been set for September 2021. The company will probably be through bankruptcy before some creditors are even aware that the case has started. Contact PRLT if you have questions or concerns about this or any other current or anticipated bankruptcy case.