The owner of a Florida assisted-living facility filed for Chapter 11 bankruptcy protection with a restructuring plan based on a deal that would give lenders an ownership stake in exchange for the debt. Devonshire PGA Holdings LLC listed its debt at up to $50 million with assets of less than $50,000 in its filing for debt relief.
Palm Beach Gardens-based Devonshire PGA Holdings LLC filed for bankruptcy in U.S. Bankruptcy Court in Wilmington, Delaware, on Sept. 19, along with three of its affiliates. The company owns a retirement community that houses up to 437 people in a mixture of independent living units and an assisted care and skilled nursing care facility. Observers said that the business bankruptcy won’t affect residents or unsecured creditors.
Court documents stated that the company owed about $158.4 million in principal and interest on a secured debt to one lender and about $20.2 million on an unsecured debt to another lender. The company listed more than $100 million in both its assets and debts and said that the value of its debts far exceeded the value of its assets. It also stated that its reorganization plan offered creditors the best chance for recovering any of their money. The company’s secured lender supports the plan and will receive the reorganized company’s equity, while the unsecured lender will receive a $3 million payment.
Bankruptcy reorganization to stay in business and repay some debt offers a company a way to continue. Individuals can also find themselves with debt that they cannot fully repay. A consumer bankruptcy attorney could analyze someone’s situation and help them determine the best course of action in a foreclosure, credit card or other debt situation. They could also help someone file for bankruptcy.
Source: Bloomberg, “Devonshire PGA Files Bankruptcy With Restructuring Plan“, Michael Bathon, September 19, 2013