A meeting for creditors of the bankrupt Barrington of Carmel is scheduled for March 8 in Dallas, Texas. The luxury retirement home declared Chapter 11 bankruptcy on Jan. 30, listing debts far in excess of assets.
Representatives of Barrington residents are expected to attend and learn whether they are secured or unsecured creditors. Each resident paid a $300,000 “refundable entrance fee” plus a monthly fee which together assured residents care for their lifetime.
The retirement living facility has 271 apartments. The Barrington’s parent company is Mayflower Communities, Inc. of Dallas, an organization which owns five other senior living enters. The Barrington opened five years ago at 1335 S. Guilford Road in Carmel.
Financing for construction and equipping the facility came from “developer bonds” issued by the City of Carmel with repayment to be made entirely with Mayflower revenues. City officials say taxpayers have absolutely no risk under provisions of the $112 million bond issue.
Since the Barrington was formed as a non-profit entity, and therefore tax exempt, the City asked for $1.5 million in lieu of property taxes, and Barrington has been paying in semi-annual installments. About half the money has been paid on schedule, according to city clerk-treasurer Christine Pauley. The next payment of $175,000 is due in November.
The bankruptcy court could order a reorganization of finances so as to arrange for eventual solvency, or it could order a liquidation of assets to pay creditors with bond holders first in line to receive their money. Unsecured creditors would get what is left.
Those folks will never see a dime. The bankruptcy judge in Texas does nor care about the residents of The Barrington. He cares about the developers from Texas.
The residents of The Barrington should be focusedon buying The Barrington out of bankruptcy.
I think the folks who established the Barrington as a not for profit will bid in the bankruptcy sale (under a different name) as a for profit entity and keep in place as much of the debt sponsored by Carmel (tax exempt). In this type of transaction, the purchaser out of bankruptcy makes big money.
What happened at the meeting????