Christian Care committee says entire case only benefits UMB Bank

By Sarah Lizee

Olympia, Wash., June 16 – Christian Care Communities & Services’ official committee of unsecured creditors objected to the company’s proposed $5.85 million debtor-in-possession facility with UMB Bank, NA, according to court documents filed with the U.S. Bankruptcy Court for the Northern District of Texas.

The group also objected to the company’s motion seeking approval of bid procedures for its three senior living communities.

The committee called the terms of the DIP financing “overreaching” and “excessive,” and said it is in violation of many provisions of bankruptcy code.

“This entire case is being conducted for UMB's benefit and in the manner it prescribes,” the committee said in its objection.

The group said that while its true UMB is funding “new money,” the reality is that UMB is only funding what is necessary to obtain what it wants – a going concern sale to maximize the proceeds of its collateral.

“The bankruptcy process is not being used to collectively better the debtors' estates and other creditors,” the committee said.

The group said the case is “obviously not necessary” for the debtors' reorganization, because there is no actual reorganization, and UMB will receive all of the proceeds from the proposed sale.

DIP terms

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

Christian Care is also seeking approval to use the cash collateral of UMB.

Bid procedures

The company has identified Boncrest Resource Group as a potential buyer of the debtor’s three communities. Christian Care is now seeking court approval to designate Boncrest affiliate North Texas Benevolent Holdings, LLC as the stalking horse.

The purchase price under the stalking horse agreement is $45 million, plus assumed liabilities and less a credit of $750,000.

The stalking horse agreement would include a 3% breakup fee and an up to $350,000 expense reimbursement.

Competing bids would be due by July 12.

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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