Senior Management Services of America

Client

Bridge was hired to serve as Chief Restructuring Officer and restructuring consultants to Senior Management Services of America and 23 related debtors (collectively, “SMSA”) in its Chapter 11 proceedings.

Challenge

SMSA was an $80 million operator of 14 nursing facilities in Texas. SMSA had filed bankruptcy 30 days before Bridge’s retention. The original CRO lost the confidence of management, resulting in the appointment of Bridge. At the time of Bridge’s retention, the Debtors: (i) were unable to generate a reliable cash flow forecast, (ii) were significantly behind in paying their post-petition payables, (iii) out of compliance with the DIP facility, and (iv) were facing challenging deadlines to sell the Debtors’ owned and leased nursing facilities.

Solution

Upon our retention, Bridge worked quickly to prepare a reliable short-term cash flow forecast and facilitate the sale of two of the Debtors’ nursing facilities –which were required under the DIP credit agreement. Subsequent to the sale, for reasons unrelated to the sale, the Debtors’ DIP lender determined it was unwilling to continue lending to the Debtors. Drawing on our deep contacts with healthcare lenders and industry participants, Bridge launched an intense effort to secure replacement DIP financing to allow the Debtors to pursue a sale of their remaining facilities.

Results

Bridge secured DIP financing from the Debtors’ primary landlord, Omega Healthcare Investors and provided critical testimony necessary for Court approval. Working closely with Debtors’ counsel, Omega and the Unsecured Creditors Committee, Bridge assisted in the negotiation of a consensual Plan of Liquidation and managed the successful sale of the leasehold interests / operations of seven of the Debtors’ nursing facilities. Bridge currently serves as the post-confirmation Plan Agent responsible for claims administration, final tax and cost report preparation and recovering any remaining assets for the benefit of the remaining creditors of the Debtors’ estates. At the confirmation hearing, Bridge and the other professionals in the case were recognized by Judge Hale (N.D TX) for the hard work and successful outcome in what was a very challenging healthcare bankruptcy.