Lender, Committee Objections Stall Inspired Healthcare’s $717M Asset Sale
The bankruptcy court hearing meant to approve the sale of nearly all of Inspired Healthcare Capital’s senior-living portfolio has been continued for a second time, with no ruling yet on whether the sales can proceed. According to a notice filed by the debtors’ counsel, Dechert LLP, the sale hearing “commenced” Sept. 22, resumed Sept. 29, and will now continue Oct. 5 at 1 p.m. CT – the third calendar date assigned to a hearing originally expected to be a single session.
The hearing is meant to approve roughly $717 million in sales across about 30 senior-living and skilled-nursing communities, the product of a Chapter 11 asset auction that itself ran months behind its original schedule. In August, six lenders and an agent for Delaware statutory trust investors objected to the sale contracts before the auction even opened, arguing the contracts didn’t specify how proceeds would be split between the DST entities holding title to the properties and the operating companies running them. Once the auction results became public in September, two of those lenders – HPI Fairmount Lender LP and HPI Delray Lender LP – went further, arguing in a post-auction objection that the entire bidding process had been structured to avoid real competition and that an alternative bid for the company’s entire business that was never evaluated before the auction closed. The DST Investors Committee and the Official Committee of Unsecured Creditors filed their own, narrower objections the same week, questioning the sales’ payment terms and how proceeds will be allocated among the debtors’ many entities.
None of those objections has been resolved. Court filings from the Sept. 29 session show the parties still preparing for a contested evidentiary hearing: The HPI lenders and Stride Bank, N.A. – another secured lender with its own property-specific dispute – each filed amended witness and exhibit lists ahead of the hearing, including sealed loan appraisals, a sealed “summary table of bid variances,” and transcripts of both the original auction and the Sept. 22 hearing session. Four separate parties, including counsel for the debtors, the unsecured creditors committee, and the HPI lenders, ordered expedited transcripts of the entire Sept. 29 proceeding, suggesting that substantive argument and testimony took place, even though no order has been entered.
Not every dispute from the hearing is still open. The Huntington National Bank withdrew two narrower, property-specific objections the day before the Sept. 29 session resumed, one involving the sale of three Georgia and Nevada properties and another tied to a Las Vegas equipment lease, and neither withdrawal came with a public explanation. Separately, the debtors asked the court to let them file under seal a credit-bid proposal from competing bidder Integrity Life Insurance Company, citing confidential commercial terms. It wasn’t clear as of publication whether that request had been granted.
The continuance adds to an already crowded fall court calendar for Inspired Healthcare. A separate discovery dispute brought by the Official Committee of Unsecured Creditors was rescheduled off the Sept. 29 docket to Oct. 14 – the same date already set for the debtors’ bid to extend their exclusivity period and for former chief executive officer Luke Lee’s motion to tap the company’s insurance to pay his own legal costs, a fight AltsWire reported on in August. Taken together, the dates suggest the case’s major financial questions – who gets paid, how much, and on what terms – remain further from resolution than the September auction results alone might have indicated.
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