Friendship Village operating normally during search for new owner
With an anticipated six-month process ahead to emerge from bankruptcy protection, life at the Friendship Village of Schaumburg retirement community is continuing in a largely normal fashion, officials and residents say.
The state's largest continuing care retirement community announced a month ago it was filing for Chapter 11 bankruptcy protection and seeking new ownership after a financial setback blamed on the inability to conduct tours for prospective residents for nearly a year during the pandemic.
But after the initial jolt that news caused, life quickly returned to normal among both current residents and those making preparations to move in, said Mark Zullo, vice president of sales & marketing at Friendship Senior Options.
"From a resident's standpoint, operation of the community is status quo," Zullo said. "The residents now seem to be OK. The residents have taken upon themselves to address the things they're seeing on social media."
Resident Burke MacDonald agreed, saying management is friendly and forthcoming with information while services like dining and maintenance are continuing just as before.
He added, he's come to prefer the term "reorganization" because the word "bankruptcy" probably caused an undue amount of anxiety about the process.
"Our day-to-day life is pretty normal," MacDonald said. "I would say, as far as we're concerned, these things tend to work out."
Zullo said explanations of the process seemed to instill a similar level of confidence in prospective residents. Of the 18 people making preparations to move in when the news broke, only one who was planning to rent has backed out.
"It hasn't really affected the process of selling or renting apartments," Zullo said.
Although the market generally is seeing more renters these days, Friendship Village did make a sale as recently as Thursday, he added.
The only change to sales is instead of the entrance fee and deposit going directly to Friendship Village, they will go to a fully guaranteed and refundable escrow account until new ownership for the 60-acre community is established, Zullo said.
Although a new owner hasn't yet been identified, the general expectation based on prior examples of such procedures is that one would be in place around the end of the year, he added.
Friendship Village spokeswoman Debra Sheridan said letters were sent out last month, far and wide, to prospective companies that might have the ability and interest to buy the community.
While the letters identify the property only as a Midwestern retirement community, the submittal of nondisclosure agreements by interested parties by the end of July would allow them to learn specifics about Friendship Village and move on the next stage, Sheridan said.
Friendship Village has been at 350 W. Schaumburg Road for 46 years and is the nation's 16th largest continuing care retirement community.
When fully occupied, it can accommodate up to 1,000 residents.
According to its 38-page Chapter 11 filing, the company has between $100 million and $500 million in liabilities, about $10 million to $50 million in assets, and between 200 and 999 creditors.
The largest creditor is listed as UMB Bank, which holds an unsecured claim of about $75.4 million, the filing indicates.