A Texas-based nonprofit senior living provider’s Amarillo facility has been turned over to a creditor owed about $3.5 million as part of the provider’s ongoing bankruptcy case.
Sears Methodist Retirement System (SMRS) is walking away from The Canyons Senior Living Center— located in the original Northwest Texas Hospital building with 111 apartments on four acres.
The Canyons’ mortgage is owed to Dallas-based Prudential Huntoon Paige Associates, which lent The Canyons $3.6 million in 2010 for renovations.
The move comes as the company continues to realign its financials after filing for Chapter 11 bankruptcy to handle funded debt obligations of about $160 million.
As the The Canyons deal moves forward, SMRS says it will continue its attempts to negotiate with the U.S. Department of Housing and Urban Development (HUD), but so far little progress has been made, Melody Chatelle, spokesperson with Sears Methodist Retirement System, told SHN in an email.
“Unfortunately that agency has refused to work with us,” Chatelle said. “Although we are not certain what course of action HUD will take next, on our end we will continue to keep providing services and paying our employees until HUD advises what they will do and when. We are disappointed in HUD’s response to this matter.”
After SMRS allows Prudential to take back The Canyons community, the senior living provider wiill continue to own seven properties and manage three Texas State Veteran’s Homes. Senior Dimensions, Inc., an affiliate of SMRS, has contracts with the Texas Veterans Land Board to operate the veterans’ homes.
“SMRS is considering many options for their other communities, but The Canyons was different than the other communities as it was not considered a core asset of SMRS,” Chatelle said.
Despite the company’s efforts to refinance its debt last year, SMRS filed for bankruptcy protection June 10 spanning all of its locations in eight cities throughout Texas. The economic downturn’s impact on the ability of seniors to sell their homes played a role in the company being unable to meet its financial goals, SMRS spokeswoman Nancy Shellhorse told SHN earlier this year.
A Dallas Division judge granted SMRS permission June 12 to borrow $600,000 from existing bondholders to be used for payroll purposes to help maintain the provider’s commitment to residents across its communities.
Sears listed assets of $10 million to $50 million in its initial bankruptcy filing in June, according to court documents. It listed liabilities of $100 million to $500 million.
Written by Cassandra Dowell