Selling 27 Real Estate Assets in a Receivership
Community Care (CCI), DeWitt Iowa
Healthcare Facilities. $18 million revenue. $5 million debt. Receivership.
- Healthcare services provider incurred suspension of government reimbursement payments after receiving a federal subpoena for Medicaid fraud based on credible allegations relative to the company’s billings.
- The company discontinued operations after it was unable to repay and implement corrective actions. All customers were transitioned to other care providers and employees were terminated without advance notice.
- MorrisAnderson was appointed Receiver to wind-down the business and sell all real estate.
- Secured and stored customer health records, secured the property, resolved matters pertaining to employee claims and trust funds, and sold the assets and distributed proceeds to creditors.
- MorrisAnderson identified real and personal assets at 27 locations, solicited prospective buyers and sold all assets, with exception of one unsaleable property, over a period of six months. The single unsold real property was in such neglect and disrepair that it did not attract any offers; the Receiver ultimately abandoned the property through the court process.
- A dispute arose regarding priority of payments between secured lenders, primarily related to the priority of Medicaid claim relative to secured debt. The matter ultimately was heard at the Iowa State Supreme Court, remanded to district court and ultimately settled through negotiations facilitated by MorrisAnderson.
- The net recovery for the secured creditors achieved expectations of the initial budget.