Bankruptcy Plan Leaves Buckingham Residents Facing Steep Entrance-Fee Losses
A federal bankruptcy judge approved a Chapter 11 liquidation plan for Buckingham Senior Living Community in Houston, according to The Wall Street Journal. The CCRC’s plan overruled objections from residents and other unsecured creditors, while granting executives broad protection from civil lawsuits.
About 500 current and former residents and their heirs are expected to receive roughly 4.8% of their allowed claims, subject to final reconciliation. The claims include approximately $147 million in entrance fees. The ruling illustrates the financial risk residents can face when refundable entrance fees are unsecured in bankruptcy, even when contracts promised substantial refunds. The plan was approved as the court’s “best interest” test found creditors would recover more than they would in a Chapter 7 liquidation.
What safeguards or disclosures should residents expect before paying a large entrance fee?
Read the full article here: https://www.wsj.com/pro/bankruptcy/buckingham-senior-community-wins-bankruptcy-exit-as-residents-face-millions-in-losses-3f0a4292