A New Jersey investment firm has agreed to pay $30.25 million for Northeast Philadelphia's Deer Meadows Retirement Community, which filed for bankruptcy protection in April.
Investment 360 L.L.C., of Lakewood, will function as a "stalking horse bidder" at an auction next month, setting a baseline price, according to a bankruptcy court filing.
U.S. Bankruptcy Judge Eric L. Frank on Monday scheduled a hearing for Aug. 11 on a proposed breakup fee that would pay 2.5 percent of the purchase price, or $756,250, to Investment 360 if the deal does not close or a higher bidder emerges. The proposed asset purchase agreement with Investment 360 was filed Friday.
Competing bids from other potential buyers are due by Aug. 8.
Deer Meadows, a tax-exempt organization that had 491 residents and employed 369 workers when it filed for Chapter 11, owes $23 million to bondholders and about $7 million to Beneficial Bank.
Deer Meadows hasn't made a bond payment since late 2011. Negotiations over a restructuring of the debt have been unsuccessful since then. However, it has remained current on the Beneficial loans to protect the securities that are collateral for Beneficial.
Founded in 1869, Deer Meadows took on $28.38 million in bond debt in 1998 to build a new nursing home with space for 135 beds and then renovate the former nursing-home space into 78 personal-care units.
Then, between 2003 and 2008, Deer Meadows, formerly known as the Baptist Home of Philadelphia, borrowed from Beneficial to reconfigure apartments to make them larger.
Investment 360's website says it was founded in 2006 and specializes in the purchase of financially distressed nursing homes.
The site does not include a list of facilities owned by the firm, which recently bought a county nursing home in Western Pennsylvania, paying $18.5 million for Sunnyview Nursing and Rehabilitation Center in Butler.
Investment 360 did not respond to a request for more information about its operations.
Among the Investment 360 representatives at a March 19 Butler County Board of Commissioners meeting on the sale was Bruce Peckman, who is listed in public records as chief executive of Westchester Center for Rehabilitation & Nursing, a 240-bed nursing home in Mount Vernon, N.Y.
The anticipated sale of Deer Meadows to a for-profit operator will continue the trend of tax-exempt nursing homes being sold to for-profit operators.
Another recent example involves the Archdiocese of Philadelphia, which agreed this month to sell its seven nursing and senior-living facilities for $145 million to Center Management Group, of the Flushing section of New York City.
BY THE NUMBERS
When Deer Meadows filed for bankruptcy it had:
Currently it owes
(approximate amount) to