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Devonshire PGA Files Bankruptcy With Restructuring Plan

Sept. 19 (Bloomberg) -- Devonshire PGA Holdings LLC, the owner of a Florida assisted-living facility, sought bankruptcy protection with a restructuring plan that gives lenders ownership in exchange for debt.

The company, based in Palm Beach Gardens, Florida, listed debt of as much as $50 million and assets of less than $50,000 in a Chapter 11 filing today in U.S. Bankruptcy Court in Wilmington, Delaware. Three affiliates also entered court protection, including Devonshire at PGA National LLC, which listed more than $100 million in both assets and debt.

Devonshire intends to implement a consensual restructuring and will seek an “expeditious exit from Chapter 11 protection,” according to court documents. Residents and unsecured creditors won’t be affected.

The value of the company’s assets is “substantially less” than secured debt, so the reorganization plan “presents the best chance for any recovery for creditors,” the company said in court papers. Secured lender ELP West Palm LLC supports the plan and will get all of the reorganized company’s equity. Mezzanine lender HJSI Devonshire II LLC will get a $3 million payment under the plan.

Florida Home

The company owns the Devonshire at PGA National in Palm Beach Garden, a retirement community with 327 independent living units and an assisted living and skilled nursing facility with 110 units.

Devonshire defaulted on its secured first-lien loan and owed ELP about $158.4 million in principal and interest as of Sept. 1, according to court documents. The company owed about $20.2 million on its defaulted mezzanine loan as of Sept. 11.

HJSI acquired all of Devonshire’s equity, which was pledged as collateral for the mezzanine loan, in a Sept. 12 foreclosure sale offering forgiveness of about $17.1 million of the debt, court papers show.

The case is In re Devonshire PGA Holdings LLC, 13-12460, U.S. Bankruptcy Court, District of Delaware (Wilmington).

To contact the reporter on this story: Michael Bathon in Wilmington at mbathon@bloomberg.net

To contact the editor responsible for this story: Andrew Dunn at adunn8@bloomberg.net

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