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A senior living facility with 228 units and more than 180 staff faced Chapter 11 bankruptcy from impacts of over-leverage. This was due to its pricing model being too high to attract and retain residents, especially in the aftermath of the economic downturn in 2008. After attempts to improve its financial position, the company remained insolvent and required bankruptcy protection to avoid a liquidation of hundreds of millions of assets. The client required expert accounting and financial guidance leading up to and throughout the bankruptcy process (also known as pre- and post-petition phases) in order to minimize negative impacts on the business and residence. Operationally, the company held a healthy cash flow position, and by securing emergency financing and strategically managing bankruptcy proceedings, it was possible to meet their objectives.
With a wealth of experience helping companies through distressed and bankruptcy situations, Larx guided this client through a Chapter 11 bankruptcy which included preparing all necessary financial reporting statements, documents, motions and budgets throughout the process. Larx oversaw the liquidity, treasury and cash management needs while also completing required reports and managing court orders in a timely manner. • Developed and maintained comprehensive 13-week cash flow model • Established Monthly Operating Reports (MOR), Statements of Financial Affairs (SOFA) and Statements of Assets and Liabilities (SOAL) • Prepared and submitted statements, schedules and first-day motions • Reviewed and validated vendor invoices and relationships • Provided Debtor in Possession (DIP) lenders with reporting and third-party support • Delivered ad-hoc reporting and claims work
Larx Advisors was able to provide the functional and executional expertise the company needed to efficiently and effectively work through and successfully exit a Chapter 11 bankruptcy. Larx leveraged prior turnaround experience to work with the debtors’ counsel and was named financial advisor to the debtor. The Larx team also collaborated closely with vendors and other third parties to repair and maintain relationships. This resulted in all parties working together for a swift and mutually beneficial solution. After the enterprise transitioned out of bankruptcy, Larx assisted through the completion of a 363 sale of the assets. With a successful outcome, the parent company of the senior living facility hired Larx to perform similar restructuring for another facility.
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