Proposed sale would allow bankrupt retirement community to refund millions from entry fees
The Harborside, formerly called The Amsterdam at Harborside, in Port Washington. Credit: Howard Schnapp
Millions of dollars in entrance-fee refunds that are owed by a Port Washington-based retirement community to its residents and the families of deceased residents would be paid if a proposed suitor prevails in a bankruptcy-court auction, representatives of the current owner and possible future owner said.
The Harborside, formerly called the Amsterdam at Harborside, owes at least $29 million in refunds. That’s the amount that must be paid to 30 residents and their families, according to documents filed in federal bankruptcy court in Central Islip.
The nonprofit retirement community at 300 E. Overlook sought protection last month from its creditors under Chapter 11 of the bankruptcy code for the third time in nine years. It listed assets of $100 million to $500 million against liabilities in the same range.
At the time, the Harborside said it had “a proposed stalking-horse term sheet” or purchase bid from another nonprofit: New England Life Plan Communities Corp.
In bankruptcy proceedings, a stalking-horse bidder is the initial bidder with whom the debtor negotiates a purchase agreement. The stalking horse usually sets the bar for lowest bid in the forthcoming auction and may or may not end up the winner, according to the law firm Jones Day.
New England Life was founded in fall 2021 and is based in Lincoln, Massachusetts, west of Boston, based on incorporation records.
"We intend to be able to fund all of the entrance-fee refunds that are due to either residents who have moved out [of the Harborside] or to family members of deceased residents," Larry Bradshaw, president of New England Life, told Newsday on Tuesday.
His comments followed a creditors’ meeting on Monday where Harborside representative Michael Morton said its “current potential stalking-horse bidder provides for the assumption of entrance-fee refund obligations as well as the refund of former residents obligations.”
Prospective residents often sell their homes to pay the Harborside’s entrance fee, which was between $527,250 and $2.2 million under one type of sales contract offered in 2021, depending on the size of the apartment. A portion of the entrance fee is refunded after the resident dies, according to documents from the Harborside’s second bankruptcy case in 2021.
Since then, a second type of contract was introduced with a lower entrance fee in return for limited nursing home services. That contract was supposed to increase the number of people living at the Harborside, CEO Brooke Navarre said two years ago.
The Harborside, with 329 units, offers different levels of care as residents age, from independent- and assisted-living apartments to a nursing home and dementia care.
At Monday's hourlong creditors' meeting, the Harborside representative was asked what it would do if the stalking-horse bidder isn't successful. The representative said, "At this point in time [the retirement community] is currently focused on either a sale or an affiliation transaction with a third party.”
James T. Madore writes about Long Island business news including the economy, development, and the relationship between government and business. He previously served as Albany bureau chief.
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