LaVie Care Centers Takes Strategic Actions to Position the Company for Long-Term Success Amidst Challenging Skilled Nursing Operating Environment
it has taken steps to implement a financial restructuring designed to improve its capital structure and position the Company for long-term success. This process not only ensures that the Company can continue operating its existing portfolio in a seamless manner, but it also addresses its legacy liabilities associated with previously-divested operations. To facilitate this process efficiently and with minimal disruption to ongoing operations, the Company has filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Northern District of Georgia (the “Court”).
LaVie Care Centers and the current facilities in its portfolio will continue operations as normal, ensuring that all necessary care and treatment will be provided to its residents. The Company also announced that it has secured a commitment of $20 million in debtor-in-possession (“DIP”) financing from key stakeholders, including affiliates of Omega Healthcare Investors, the Company’s largest landlord and secured lender. Following Court approval, this new DIP financing, combined with cash on hand and cash flow generated from ongoing operations, will support the business to satisfy its ongoing obligations, and enable the Company to remain focused on delivering quality care during the Court-supervised process.
The Company previously engaged Ankura Consulting to provide certain financial advisory and restructuring services. Prior to the commencement of these filings, the Company retained M. Benjamin Jones, Senior Managing Director at Ankura Consulting, as the Company’s Chief Restructuring Officer. Mr. Jones brings over 25 years of experience in restructuring advisory and a breadth of business leadership expertise in the healthcare sector. LaVie’s management team, including Mr. Jones, will continue to lead the process and manage the business.
“Today’s announcement is an important step forward to strengthen the Company’s financial footing in order to combat some of the challenges faced by the skilled nursing industry generally since the COVID-19 onset, as well as potential looming challenges ahead. Following the Company’s reduction in footprint amidst this challenging operating environment, after analyzing all available options, the Company concluded that a court-supervised process was necessary to provide the best path forward for all of our stakeholders,” said Mr. Jones. “As we move through this period, we remain focused on delivering compassionate care to our patients and residents and continuing to be an outstanding place to work for our dedicated caregivers. We would like to extend our gratitude to our residents and their families for the continued trust that they place in us, as well as our vendors and hospital partners who we remain committed to expanding our relationships with. The financial performance of our current portfolio remains strong, and we are confident that this process will enable the Company to continue serving these residents well into the future.”
As is customary, the Company has filed various “first day” motions seeking court approval to continue its operations as normal during the court-supervised process, including the continued payment of employee wages and benefits, taxes, post-petition obligations to vendors and the continued delivery of resident care without interruption. In addition, the Company has retained Stout Capital as investment banker to explore alternatives to maximize value to the Company’s creditors.
Court filings and additional information related to the proceedings are available on a website administered by the Company’s claims and noticing agent, Kurtzman Carson Consultants LLC: www.kccllc.net/LaVie.
Advisors
McDermott Will & Emery LLP is serving as legal counsel, Stout Capital LLC is serving as investment banker, and Ankura Consulting is serving as financial advisor (including the retention of Mr. Jones, Senior Managing Director at Ankura, as the Company’s Chief Restructuring Officer).
