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US: Senior living company Nashville Senior Care LLC has become the latest operator in the sector to file for bankruptcy after exhausting an emergency loan secured due to the Covid-19 pandemic.
In a court filing seen by Bloomberg, executive director Thomas Johnson, who is also founder of non-profit organisation Trousdale Foundation [which owns the facilities], explained that Nashville Senior Care’s number of residents had dropped “precipitously” after pandemic lockdown measures started to be enforced. At the same time, expenses shot up “dramatically”, and the operator was no longer able to make the investments needed to continue running profitably.
Johnson continued: “This difficult combination of rising costs and a lower census, coupled with a high debt load from their financing, led to the debtors’ default under their bond documents.”
Nashville Senior Care currently operates five senior living facilities and one home health firm in three US states [Florida, Tennessee and Ohio]. With listed assets between $50 million and $100 million, the company has liabilities of $100 million to $500 million, including $213 million in municipal bond debt outstanding.
In the weeks prior to the filing, Nashville Senior Care reported an “acute liquidity crisis” which led it to seek a $1.35 million emergency loan from trustee UMB Bank N.A that would enable it to continue operating and find a new owner during the bankruptcy protection.
The senior living facility operator is now seeking court approval that could pave the way for Cascasis LLC to acquire its assets for a reported $41 million. It is also looking for approval to borrow a further $4 million from UMB for a total of $5.35 million in debtor-in-possession financing, according to Bloomberg.
