New York firm wins auction to buy Henry Ford Village out of bankruptcy – Detroit Free Press

The Henry Ford Village: Senior Living Community on Thursday, Jan. 14, 2021, in Dearborn. (Photo: Antranik Tavitian, Detroit Free Press)

A New York firm has won an auction to buy the1,038-unitHenry Ford Village retirement community in Dearborn out of bankruptcy and intends to paya portion of current residents' refundable entrance fee deposits that bankruptcy had put at risk.

The village announced Thursday thatSage Healthcare Partners won the auction with a$76.3 million bid, beating a $69 million offer fromMED Healthcare Partners, the only other bidder.

The deal is still subject to U.S. Bankruptcy Court approvaland is scheduled for a May 24 hearing. Sage plans to continue operating the village, but will convert it to a "rental only" residential model and stop theentrance fee deposits.

Henry Ford Village,15101 Ford Road nearthe birthplace of Henry Ford,declared Chapter 11 bankruptcy Oct. 28, citing asits biggest financial challenge the liability associated with the entrance fee deposits, which range from $27,500 to $356,000andcan be refundable when a residentmoves out or dies.

The deposits were supposed to be 100% refundable and totaled more than $112 million for current residents, as well as some former residents and their heirs who are still waiting to get deposits back.

But the village struggled inrecent years to make good onthe refunds because its occupancy ratehasslumped especially during the COVID-19 pandemic and it dependedonnew deposits from incoming residents to pay out those of former residents.

More: Henry Ford Village bankruptcy puts seniors' deposits at risk. Here's why they are worried

The proposedSage deal doesnot give formerresidents or former residents' heirsany deposit refunds.

Instead, theywould betreated as unsecured creditors in the village's ongoing bankruptcy case, and may eventuallyreceive some compensation for their unrefundeddeposits.

The Henry Ford Village: Senior Living Community on Thursday, Jan. 14, 2021, in Dearborn. (Photo: Antranik Tavitian, Detroit Free Press)

The deal would allow current residents to become eligible to get a percentage of their entrance feedeposits back after specific anniversariesof the Sage sale's future closing date. These refunds would be triggered oncethey exit the village:

Sage Healthcare Partners was started in 2014 and says it owns 13 properties such as Henry Ford Villagethat are known as continuing care retirement communities. Henry Ford Village isthe largest such community in the country and employed a staff of more than 500.

Chad Shandler, Henry Ford Villages chief restructuring officer, was not available for an interview Thursday, but issued a statement announcingthe auction results.

"Were confident thatSage, as the winning bidder, considers the long-term best interests of our residents, employeesand allthe wonderful people that make Henry Ford Village a true community, Shandler, also a New York-basedexecutive with FTI Consulting,said in the statement.

He continued, Throughout the sale process, our guiding focus was to identify a path forward that upheld Henry Ford Village's values and stabilized its financial position while allowing us to maintain the care and lifestyle our residents have come to know, love andrely on. Under Sages ownership, we believe HFV will achieve just that while providing a distribution to unsecured creditors.

Sage's PresidentAvi Satt said in a statement that his company looksforward to strengthening HFV

financially while enhancing the lifestyle residents have come to love."

Contact JC Reindlat 313-222-6631 or jcreindl@freepress.com. Follow him on Twitter@jcreindl. Read more on business and sign up for our business newsletter.

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New York firm wins auction to buy Henry Ford Village out of bankruptcy - Detroit Free Press