Indiana Continuing Care Retirement Community Files for Chapter 11 Bankruptcy
On July 22, a continuing care retirement community (CCRC) in Bluffton, Indiana filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Northern District of Indiana. River Terrace Estates was approximately $14 million in debt from outstanding municipal bonds.
In its filing, the CCRC cited its inability to pay its long-term debt after the country’s economic recession. The not-for-profit company opened in 2003 and sought help in 2008 from the Continuums Foundation, a nonprofit corporation specializing in acquiring, operating and repositioning large senior housing campuses. However, despite repeated stabilization efforts over the last six years, the Continuums Foundation was unable to satisfy River Terrace Estates’ debt obligations.
Chapter 11 bankruptcy allows debtors to effectively restructure debt and does not place any limits on the amount of debt, unlike Chapter 7 and 13 bankruptcies. Corporations, partnerships and limited liability corporations (LLCs) typically file for Chapter 11, although individuals may be able to file under this chapter if they have too much income or debt to qualify for Chapter 7 or Chapter 13.
Once a business files Chapter 11 bankruptcy, it continues to operate more or less as usual; however, the business must hand over control of all major decisions to the bankruptcy court, including those concerning sales of assets, breaking or entering into leases, stopping or expanding business operations and paying fees to attorneys and other professionals. Once the company creates a debt reorganization plan, its creditors must approve it.
Filing for bankruptcy can be a difficult process, but it becomes easier with the help of a knowledgeable attorney. Consult a bankruptcy lawyer in Indiana for the assistance you need during a challenging time.