Jordan Ramis pc. Attorneys at law

Retirement Home Rescue

Handling Financial Troubles

Problem

  • Under-capacity utilization coupled with a high-rate maturing loan, where the lender was unwilling to extend the due date, caused serious problems for our client.  General credit problems and the national recession precluded the ability to refinance, which was necessary to maintain all vendor relationships and to ensure licensing.

Solution

  • Jordan Ramis assisted our client in deferring foreclosure by filing Chapter 11 in order to explore financing options. 
  • The loan contained a prepayment premium claim, which was challenged before the court. 
  • During the Chapter 11 proceeding, the ownership orchestrated a sale leaseback that provided full payment of both the first loan and unsecured creditors with the ownership group subordinating debt owed to it.

Results

  • The reorganization plan was approved, as the sale plan satisfied the lender.
  • The lease option protected the client's indebtedness and its ultimate right to realize the long-term benefits of a continued upward operational result. All unsecured creditors were paid in full.