Christian Care Communities settlement hearing scheduled for Jan. 12

By Sarah Lizee

Olympia, Wash., Jan. 4 – Christian Care Communities & Services had the hearing to consider a settlement with the debtors, the official committee of unsecured creditors and prepetition and debtor-in-possession lender UMB Bank, NA scheduled for Jan. 12, according to a notice filed Tuesday with the U.S. Bankruptcy Court for the Northern District of Texas.

As previously reported, the parties attended mediation on Dec. 6 and reached an agreement to resolve all claims under an adversary proceeding filed by the committee against UMB in August.

As background, the company filed a Chapter 11 plan in November and got conditional approval of the related disclosure statement on Dec. 7. The confirmation hearing is slated for Jan. 30.

In summary, the settlement term sheet calls for:

• Allowance of UMB’s bond claim in the amount of $54.06 million;

• UMB’s prepetition liens and secured interests to be deemed valid and perfected;

• The debtors will make a cash deposit of $150,000 into a general unsecured creditors distribution account on the effective date;

• Proceeds of certain additional assets of debtors will be placed in the GUC account;

• Proceeds of 5% of proceeds of the employee retention credit will be placed in the GUC account; and

• The plan will be amended to provide for the treatment of allowed secured lender claims and general unsecured creditors claims consistent with the terms of the settlement.

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, 2022 under Chapter 11 case number 22-80000.

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