US-based skilled nursing facilities operator LaVie Care Centers has filed for relief under the Chapter 11 of the US Bankruptcy Code. 

LaVie Care Centers’ voluntary petitions, filed in the US Bankruptcy Court for the Northern District of Georgia, is part of a strategic move to address its legacy liabilities and strengthen its financial footing.  

The move aims to facilitate a financial restructuring to improve the company’s existing capital structure and ensuring long-term success.  

According to the nursing facilities operator, the restructuring will not affect the daily operations of the care centres, which will continue to provide uninterrupted services to residents. 

The company, which operates 43 licensed facilities across five US states, has also secured a $20m commitment in debtor-in-possession (DIP) financing from several stakeholders, including Omega Healthcare Investors, to support ongoing operations. 

Omega is LaVie’s secured lender and largest landlord. 

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This DIP funding, subject to court approval, along with existing cash reserves from operations, is expected to enable the company to meet its financial obligations during the restructuring process. 

Ankura Consulting has been providing financial advisory and restructuring services to LaVie Care Centers.  

Ankura senior managing director M. Benjamin Jones, with over two decades of experience in healthcare restructuring, was appointed as LaVie’s chief restructuring officer to oversee the process. 

The management team of LaVie Care Centers, led by Jones, will continue to steer the company through this transition.  

LaVie has further filed “first day” motions requesting for court’s approval for maintaining normal operations, including the payment of taxes, employee wages and benefits, and post-petition vendor obligations. 

Furthermore, LaVie has engaged Stout Capital as an investment banker to explore options for maximising creditor value, while legal counsel is provided by McDermott Will & Emery. 

Jones said: “Today’s announcement is an important step forward to strengthen the Company’s financial footing in order to combat some of the challenges faced by skilled nursing industry generally since COVID-19 onset, as well as potential looming challenges ahead.   

“Following the Company’s reduction in footprint amidst this challenging operating environment, after analysing all available options, the company concluded that a court-supervised process was necessary to provide best path forward for all of our stakeholders.”