The senior living community Edgemere filed for bankruptcy last week, citing the impacts of the pandemic and the February 2021 winter storm, and accused its landlord, InterCity Investments, of trying to take back the property for a “windfall profit.”
The community with more than 400 residents consisting of 304 independent-living units, 113 assisted living units, and 87 nursing beds in the 8500 block of Thackery Street said in a statement that it’s negotiating a restructuring plan with its financial stakeholders and that it plans to continue operating during the proceedings.
Edgemere said in a court filing it plans to honor entrance fee refund obligations to former and current residents, but some told the Dallas Morning News that they’re not satisfied.
“This filing pretty much confirms for me that we won’t get the money back,” William Thomas, who’s awaiting a refund from when a relative moved out, told the Dallas Morning News.
The bankruptcy filing estimates Edgemere to have between 1,000 and 5,000 creditors, and its assets and liabilities are both estimated to be between $100 million and $500 million, according to the bankruptcy filing.
Aside from declining occupancy, Edgemere cited issues like labor costs and competition from other continuing care retirement communities in the area. There are 11 other senior living communities within a 10-mile radius of Edgemere, InterCity investments said in a court filing.
Edgemere sued Intercity and Kong Capital simultaneously with Edgemere’s bankruptcy filing, and the lawsuit alleges Intercity of working with Kong Capital to terminate its 52-year ground lease and turn it into a senior living rental community.
The lawsuit accuses Intercity of contacting residents via social media and “attempting to frighten them that Edgemere would be unable to repay their entrance fees … without explaining … that Intercity’s competing plan was was to repurpose the property and leave the residents no hope of a refund of their entrance fees.”
Intercity, for their part, responded to the lawsuit, describing Edgemere in court filings as “a sinking ship” “on the verge of financial collapse.”
Intercity alleged in court documents that Edgemere’s plan didn’t include a May 1 rent payment and that Edgemere “may already be or will likely soon be administratively insolvent.”
Edgemere has less than $420,000 in cash and investments and has been losing $2 million per month to operate the facility, Intercity said in court documents.
“Put bluntly, the Edgemere is a sinking ship, taking on water faster than it will ever be able to bail it out,” the filing from Intercity read.
Intercity also described the lawsuit in court filings as Edgemere’s “last-ditch effort to distract this Court and all other parties in interest from the incontrovertible fact that the Edgemere has experienced years of substantial and mounting losses, together with financial mismanagement, and has quite frankly run out of funds, by trying to pin blame on the landlord after the fact.”
Edgemere will be unable to make payroll next week without an emergency interim $2 million debtor-in-possession loan, Intercity continued in its response.
In response to Intercity’s accusations, an Edgemere spokeswoman told the Dallas Morning News, “the assertions from our landlord are without merit and an attempt to distract from our ongoing litigation.”