By Maria Cook
The company that owns upscale senior-living community The Barrington has filed for Chapter 11 bankruptcy in a Dallas court.
Delaware-based Mayflower Communities Inc., which owns The Barrington, owes $52 million to an unspecified number of residents, according to court documents.
Residents pay six-figure refundable entrance fees to live in the community, and usually they are partially refunded to residents or their estates if they move out or pass away. The residents are considered unsecured creditors, meaning they will not be repaid until after secured creditors and bondholders.
A spokesman for The Barrington sent a statement that said the bankruptcy filing begins the process of resolving an “untenable financial position” and “affords the greatest protection to residents and their investment.”
“Given the challenging market conditions and the financial climate post-recession, despite our best efforts, it has been an uphill struggle the last five-plus years to service our bond debt,” the statement read.
The Barrington is a not-for-profit organization, funded in part by municipal bonds. Mayflower Communities Inc. defaulted on multiple bond payments in Nov. 2018. The City of Carmel sold $119 million in bonds for Mayflower in 2012, which have an outstanding balance of $92.7 million, according to local news reports.
“The current situation Barrington finds is unfortunate,” stated Chief Restructuring Officer Louis Robichaux in recent court filings. “The facility has no operational or healthcare issues and has not found itself defending contentious litigation brought on by its residents or its estate. The issue is that Barrington simply cannot continue to maintain its current debt structure.”
The terms of the bonds state that the City of Carmel is not financially responsible for the debt. According to City of Carmel spokesman Dan McFeely, the city is not expected to face any long-term repercussions should The Barrington eventually close.
“We work very hard to provide the infrastructure and quality of life attributes to support our local small businesses and we hate to see any business, large or small, have difficulties,” McFeely said. “But that is the nature of the free market. Thanks to our diverse economy, we are confident that the loss of one of our employers will not have a long-term negative impact on Carmel’s economy.”
The Barrington opened in 2014 and includes 271 living units on nearly 20 acres and employs more than 200 people. Day-to-day operations at The Barrington have not been affected by the bankruptcy filing.