Études de cas

Receivership of 32-Acre Senior Housing Community Yields 89% Recovery for Bondholders

J.S. Held rachète Shechter & Everett pour développer sa comptabilité judiciaire dans le domaine du droit de la famille en Floride

En savoir plus fermer Créé avec Sketch.
Accueil·Receivership of 32-Acre Senior Housing Community Yields 89% Recovery for Bondholders

Contexte

The owner and developer of a 55+ active senior living community in Plano, Texas, with 318 rental units on 31.5 acres ("Borrower"), defaulted on its $80M+ loan funded via senior living bonds, filed for bankruptcy, and was in violation of the bankruptcy plan for failing to pay debt service on the bonds. A large national bank serving as Trustee on behalf of bondholders ("Trustee") sought a receiver to take control of the property and its operations, protect the underlying collateral for the benefit of bondholders, and design and implement an exit strategy.

After a heavily contested hearing and multiple rounds of cross-examination, the Trustee appointed one of our Texas-based experts to serve as Receiver based on our proven track record of turning around and optimizing the value of large, complex real estate entities. Within ten months of the appointment, the receivership, supported by our team, delivered an 89% recovery to bondholders by running a competitive property sale that yielded $71M in proceeds and working with counsel and the Trustee through the technically complicated process of terminating the bonds' regulatory agreement and transferring funds in concert with the sale process.

Nos conseils

With our Texas-based expert serving as the court-appointed Receiver, and supported by our broader team, the property was effectively operated throughout the sale process, ultimately resulting in a successful recovery for the bondholders by:

  • Stabilizing & Managing the Community: We took over operations and worked closely with the property manager to stabilize the community, including obtaining the final occupancy certificate and completing other key work that the Borrower failed to address. Our team generated $1.1M+ in cash flow through improved operations during the receivership period, helping fund bondholders’ recovery.
  • Negotiating with Key Vendors & Property Management Company: The property manager was overwhelmed and received very little guidance from the Borrower. Upon taking control, our team negotiated past-due balances with key vendors and established a new property management agreement that better aligned the property manager with the goals of the property, including increasing occupancy and retention.
  • Successfully Completing a Competitive Sale Process: Our team interviewed multiple qualified real estate brokers and investment bankers to sell the property, then selected a top agent who supported our experts throughout the process. We obtained multiple bids and ran a “best and final” bidding round, resulting in a $71M offer with the best financing terms. Additionally, we facilitated due diligence among numerous bidders and negotiated the purchase agreement.
  • Navigating the Complex Nature of the Bonds & Related Regulatory Agreements: Our team collaborated closely with counsel and the Trustee and proposed creative solutions that ultimately enabled a quicker closing process for all parties.

Obstacles et nos solutions

  • The Borrower's operations were in disarray, and the in-place property manager lacked visibility into the property's performance. To address these challenges, our team took the following actions:
    • Renegotiated the property management agreement to better align the property management’s incentives with the goals of the property.
    • Worked closely with on-site managers to properly maintain the property and related accounting.
    • Terminated certain contractors and vendors who were taking advantage of the property and absentee ownership.
  • The Borrower lacked a marketing or leasing strategy and had leased units at well below-market rates. We addressed gaps in marketing and leasing execution by:
    • Working with digital marketing agencies to establish a lead generation strategy and reduce spending on underperforming channels.
    • Revamping the property’s website and other marketing materials and confirming that the on-site leasing team had up-to-date collateral for prospective tenants.
    • Ensuring new leases were at market rates and negotiating renewals as close to market rates as possible.
  • The Borrower was expected to object to the property sale if it disagreed with the terms. We proactively managed this risk by:
    • Hiring a competent broker who advised and helped negotiate to achieve the highest and best offer.
    • Maintaining clear and consistent communication throughout the sale motion process.
  • We addressed deferred maintenance-related issues, including HVAC systems and the fire protection system, by:
    • Engaging an internal construction expert to work with vendors and resolve issues.

Domaines d'activité associés

> Mises sous séquestre
Les tribunaux fédéraux et étatiques, les créanciers et les conseillers juridiques confient à notre équipe la mission d'administrateur judiciaire d'entreprises et d'entités immobilières en difficulté. Nous aidons à stabiliser les opérations et les flux de trésorerie, protéger les actifs de l'entreprise et adopter des méthodes pour optimiser le redressement financier. Notre équipe multidisciplinaire met à profit sa vaste expérience en matière de restructuration et dans divers secteurs d'activité pour prendre le contrôle, en tant qu'administrateur d'entreprises confrontées à des difficultés financières, opérationnelles et juridiques.

 

> Solutions face aux situations difficiles
Nous proposons des solutions globales aux entreprises en difficulté et insolvables afin de maximiser leur redressement, de limiter les risques et de rétablir leur valeur. Nos experts sont mandatés pour aider les entreprises en difficulté à stabiliser leurs activités, protéger les intérêts des parties prenantes et appliquer des stratégies de redressement. Nous adoptons une approche centrée sur les opérations qui voit au-delà du bilan pour éviter toute dégradation supplémentaire et tracer la voie vers une croissance durable.

Personne de contact :

For additional information about the engagement or to learn more about our services, contact:

Nos experts