A potential buyer has bid $83.1 million to acquire the largest life plan community in Illinois after it declared Chapter 11 bankruptcy earlier this year.
A company referred to as IL CCRC LLC has inked an agreement with Friendship Village of Schaumburg in Schaumburg, Illinois, to set a minimum price floor for the acquisition in a process also known as a “stalking horse” bid, according to recent court documents.
A “stalking horse” bid essentially establishes a low-end bid for a bankrupt property prior to an auction for it. Other bids can be filed prior to the auction, with the latest possible closing date listed as Feb. 9, 2024 in the filing.
The buyer, IL CCRC LLC, is a limited liability company based out of Delaware, according to the court filings. The company has committed to invest up to $15 million for capital improvements on the property if it wins the bid.
Friendship Village of Schaumburg had filed for Chapter 11 bankruptcy in June this year after citing troubles from the Covid pandemic and a decreased number of move-ins. Previous reporting from Senior Housing News states that at the time stakeholders believed the best solution would be to “utilize the bankruptcy process to run a marketing and sale process to select a potential purchaser.”
The court filing states that at closing, operator Evangelical Retirement Homes of Greater Chicago would receive $31 million, or 37.3% of the purchase price. Former residents will receive $2 million to be paid out collectively on a pro rata basis, and current residents will be entitled to $51.1 million in the repayment of “all or a portion of their entrance fees” paid over time.
According to the filing, Friendship Village of Schaumburg has a total of 815 units consisting of assisted living, independent living and skilled nursing across a total of 70 acres, and if occupancy if full, can house 1,000 residents. It was listed as the No. 24 largest non-profit senior housing community in the country, according to the 2023 LeadingAge-Ziegler 200.
Companies featured in this article:
