The winning bidder in the bankruptcy auction for the Friendship Village of Schaumburg retirement community has been identified.
Encore Healthcare Services of New York prevailed at the recent bankruptcy auction, paying $114.8 million for the 815-unit complex at 350 West Schaumburg Road in the northwest suburb, the Daily Herald reported.
Last month, it was reported that a potential buyer planned to offer a minimum bid of $83.1 million. Turns out, Encore Healthcare was playing the role of “stalking horse” by offering the minimum bid.
The company, known for its reliability in the industry, has committed to investing $15 million in capital improvements at Friendship Village beyond the purchase price. The sale is expected to be made official on Nov. 8, with a closing date anticipated within 60 days thereafter.
Friendship Village officials said the pandemic was the primary factor that led to their decision to seek bankruptcy protection earlier this year. The community halted tours for nearly a year as a result of the public health crisis, causing a decline in sales. Despite operating as a nonprofit, the auction garnered interest mainly from for-profit entities. These buyers believe that increasing the community’s residency numbers will restore its profitability.
As part of the pending agreement, former residents seeking repayment of entrance fees will share a $2 million payment, while current residents will receive their share over time from $76.6 million of the purchase price. The repayment plan for current residents’ entrance fees includes 25 percent within three years of the closing, 35 percent within four years and incremental increases every few years until they’re fully reimbursed after 16 years.
In addition to their financial commitments, Encore Healthcare Services has pledged to make charitable contributions of $50,000 per year and provide $25,000 per year to their employees for educational assistance.
—Quinn Donoghue
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