Nashville Senior Care files bankruptcy, gets $41 million stalking horse bid

By Sarah Lizee

Olympia, Wash., Aug. 15 – Nashville Senior Care, LLC and six affiliated debtors filed Chapter 11 bankruptcy in the U.S. Bankruptcy Court for Middle District of Tennessee.

The debtors are comprised of five senior living communities and one Medicare-certified home health agency affiliated with the Trousdale Foundation, which is the sole member or equity holder of each of the debtors.

The company said in court documents that it was severely impacted by the Covid-19 pandemic and that rising costs, a decline in residents, and a high debt load led to a default under the company’s bond documents.

Following discussions with bond trustee UMB Bank, NA, the debtors determined that they needed to pursue strategic alternatives to maximize value. UMB holds a valid first-priority lien and security interest in substantially all of the debtors’ real and personal property.

As part of the Chapter 11 process, UMB has agreed to provide a $5.35 million priming super-priority debtor-in-possession facility to the debtors.

The financing is set to mature on Sept. 14 and bear interest at 12% per annum. The default rate would rise to 14%.

The bond trustee had also provided a $1.35 million bridge loan to the debtors prior to the filing.

The company has also entered into a stalking horse agreement with Cascasis LLC to purchase substantially all of its operating entities’ assets for $41 million.

Bid protections under the stalking horse agreement include a $2 million breakup fee and a $500,000 expense reimbursement.

Under the company’s proposed bid procedures, the bid deadline would be 6 p.m. ET on Oct. 12. If needed, an auction would take place on Oct. 17. A sale hearing would be set for Oct. 25.

Competing bids must be at least equal to the stalking horse bid, the bid protections, and $500,000.

In its petition, the company listed 200 to 999 creditors, $50 million to $100 million in assets and $100 million to $500 million in liabilities.

No unsecured creditors were listed with claims of $1 million or more.

Mcdonald Hopkins LLC and Emergelaw plc are proposed counsel to the company. Houlihan Lokey Capital, Inc. is acting as investment banker.

The Hermitage, Tenn.-based senior care company filed bankruptcy under Chapter 11 case number 23-02924.

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