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Edgemere’s Financial Restructuring – What You Need to Know

REVISED ON 7/5/2022

In April 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. In June, we secured several wins in our case that will help us emerge from this process more efficiently and effectively, including approval from the Bankruptcy Court for $10.1 million in financing, which will carry us through the end of the year as we work to strengthen our financial foundation. Simultaneously with the bankruptcy filing, Edgemere also filed a lawsuit against its landlord, Intercity Investments Inc., and its agent, Kong Capital, and in that lawsuit, we alleged claims of tortious interference with our business, unlawful use of our confidential information, and equitable subordination in bankruptcy, as well as a number of other claims. We believe pursuing this lawsuit is in the best interest of Edgemere and its residents, and we intend to pursue it vigorously. The lawsuit is publicly filed, and for more information you can find this and other bankruptcy pleadings on the KCC website, http://www.kccllc.net/Edgemere.

The Chapter 11 process is very different from what you might think of when you hear the word “bankruptcy” – it does not mean that Edgemere is going out of business. This process is a positive step for Edgemere, our residents, team members, vendors and future residents. Chapter 11 is a financial tool that has been used by many companies across multiple industries, including the senior living industry, to navigate a path to financial strength and long-term success.

Through this process, Edgemere remains confident that it will gain long-term financial flexibility and stability by working alongside its financial stakeholders, allowing it to serve the best interests of current and future residents. In the meantime, Edgemere remains fully operational throughout the Chapter 11 process, fulfilling obligations to our stakeholders while continuing to provide high-quality care and services to residents and their families.

Edgemere published a press release about this filing on April 14, 2022 which you can find here. For detailed information about the Chapter 11 process, please visit http://www.kccllc.net/Edgemere.

If you would like to learn more about what this process means for you, please click on the relevant button below for common frequently asked questions and additional resources. If you have a question not addressed in the FAQs provided, we encourage you to fill out a form at the bottom of this page so that the appropriate party can address them.

Feel free to visit this section of our website periodically as we will continue to update this information to ensure you remain informed.

UPDATES

July 5, 2022
Several positive and important milestones were achieved in June, including approval by the court of $10.1 million in financing for Edgemere and a favorable Patient Care Ombudsman’s report verifying the high-quality care provided to residents.

READ MORE

FAQ

In a recent Bankruptcy Court hearing, we achieved several wins in our case that will help us emerge from this process more efficiently and effectively. We received approval from the Court for $10.1 million in financing, which will carry us through the end of the year as we strengthen our financial foundation.

Approval of this financing enables us to continue meeting our commitments to our stakeholders, including our current and future residents and family members. This milestone demonstrates continued positive momentum and further supports our commitment to operate our community as usual.

Learn More: http://www.kccllc.net/Edgemere

Chapter 11 is a section of the U.S. Bankruptcy Code that allows organizations to operate as usual and maintain commitments to stakeholders while addressing financial challenges. Many well-known companies and senior living communities have filed for Chapter 11 protection and emerged as healthier companies on the other side.

This process is very different from what you might think of when you hear the word “bankruptcy” – it does not mean that Edgemere is going out of business. The legal process of Chapter 11 offers communities like Edgemere protection to operate without interruption as we work to resolve financial challenges. This means Edgemere can maintain our industry-leading health center, unique amenities, and beautiful campus.

Edgemere is negotiating with its other stakeholders on a financial restructuring plan that will provide the community with a healthier, more sustainable financial future. Through this process, Edgemere is confident that it will gain long-term financial flexibility and stability by achieving a permanent resolution with its financial stakeholders regarding the future of its capital structure, allowing it to serve the best interests of current and future residents.

We are not the only senior living community to run into financial hardships in the past few years. Like many others, we have taken significant strides to improve upon our financial structure to be in the place for our current and future residents to enjoy a long-term sustainable community and take part in life-enriching activities they love. In early 2021, we began discussions with our stakeholders intended to reach a consensual resolution among all parties to strengthen the community’s financial position and build a sustainable future.

Last year, we entered into substantive discussions with the intention of improving our financial position. These discussions resulted in an initial forbearance agreement late last year, and on March 7, 2022, we announced a new forbearance agreement with our bondholders. The forbearance gave us some much-needed breathing room—but, ultimately, was a temporary measure. We strongly believe that by filing for Chapter 11 now, we will holistically work to strengthen our financial structure and meet all go-forward commitments to all stakeholder groups throughout the process.

Given occupancy remains the most important factor to Edgemere’s financial health, we have revamped our marketing and sales processes to address the growing competitive market. We continue to put all of our support behind our sales team to grow our occupancy. Edgemere led Lifespace move-ins with 48 in 2021, which we expect to continue in 2022.

The COVID-19 pandemic hit many senior living communities hard, and Edgemere is not the only senior living community to run into financial hardships in the past few years. In the senior living space in particular, there are many communities that have filed for Chapter 11 protection recently, including Amsterdam House (New York), the Buckingham (Texas), California-Nevada Methodist Homes (California), Henry Ford Village (Michigan), Hillside Village (New Hampshire), Inverness Village (Oklahoma), Clare Oaks Senior Living (Illinois), the Barrington of Carmel (Indiana) and AltaVita (California). Throughout their processes, each has been able to continue its resident care and experience while addressing their financial challenges, which is our goal as well.

We are working collaboratively with all stakeholders in our Chapter 11 case with the goal of completing this process in a timely fashion, well-positioned for long-term success and a healthier financial future.

Edgemere does not anticipate any leadership changes as a result of this announcement.

Edgemere has filed a lawsuit against Intercity Investments Inc. and its agent, Kong Capital, alleging claims related to their actions over the last year. We believe this is in the best interest of the community and all stakeholders, and we intend to pursue it vigorously. While we can’t discuss claims in active litigation, the complaint is filed publicly and you can find a copy of it on the KCC website, http://www.kccllc.net/Edgemere, which has all the bankruptcy filings related to Edgemere.

Contacts

We understand you may still have a few questions and appreciate your concerns for Edgemere throughout this financial restructuring process. Please contact the respective contacts below for more information.

  • Edgemere Residents and Team Members: Please reach out to our Executive Director, John Falldine
  • Prospective Residents: Please reach out to our Executive Director, John Falldine
  • Prior Residents: Please contact your usual Edgemere contact, or call 310-751-2669 for U.S. calls or 866-967-0269 for international calls or email EdgemereInfo@kccllc.com
  • Vendors: Please contact your usual Edgemere contact, or call 310-751-2669 for U.S. calls or 866-967-0269 for international calls or email EdgemereInfo@kccllc.com

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