Christian Care: U.S. trustee appoints committee, objects to DIP loan

By Sarah Lizee

Olympia, Wash., June 3 – The U.S. trustee overseeing Christian Care Communities & Services’ bankruptcy case appointed an official committee of unsecured creditors and objected to the company’s motion seeking approval of debtor-in-possession financing and cash collateral use, according to court documents filed Friday with the U.S. Bankruptcy Court for the Northern District of Texas.

Region 6 U.S. trustee William T. Neary appointed two members to the committee: Nicholas Samarkos for Quality Care Rehab, Inc., based in Homosassa, Fla., and James Couch, based in Dallas.

Neary said he is currently in discussions with the debtor regarding the financing motion.

The U.S. trustee said he objects to the financing because the debtors waive certain rights and surcharge rights.

In addition, third parties are enjoined from enforcing any marshaling provisions against the lender.

Neary said the debtor has granted a release in favor of the lender, the bondholders and a “broad cast” of affiliated entities.

The U.S. trustee also said the final DIP order should preserve the right of the patient care ombudsman to request a larger carveout.

As previously reported, the company is seeking final court approval of a $5.85 million 12% debtor-in-possession bond due Nov. 30 with UMB Bank, NA. The company is seeking interim access to $2.5 million of the financing.

The Texas-based non-profit faith-based organization operates three communities for seniors in Mesquite, Fort Worth and Allen. The company filed bankruptcy on May 23 under Chapter 11 case number 22-80000.

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