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Altavita, formerly Air Force Village West, files for bankruptcy protection

Press-Enterprise - 3/13/2019

March 12--Altavita Village, the Riverside retirement community originally built for military veterans, has filed for bankruptcy protection.

The nonprofit senior housing complex, which has more than 300 residents, has been embroiled in financial woes for more than a decade. It opened in 1993 as Air Force Village West but changed its name to Altavita in 2015 when it started accepting non-veteran residents. Many residents continue to use the community's original name.

The Chapter 11 bankruptcy was filed Sunday in U.S. Bankruptcy Court in Riverside. In a statement released by the facility, Altavita said it would continue to operate and provide residents safe assisted living.

Altavita's financial troubles in recent years had worsened to a point where it was forced to stop paying almost $60 million to its secured creditors, the statement indicates. A buyer was poised to purchase the community in late 2017, but a lawsuit by a resident, who believed the sale would affect the quality of life there, blocked the deal.

The complex has been in receivership since February 2018, the result of a lawsuit brought by creditors who were not getting paid.

Since that time, efforts were made to find a buyer. Several qualified bidders expressed interest and handed over letters of intent, but with debt mounting, it was eventually determined that bankruptcy was the only recourse.

"We believe this bankruptcy will allow us to find a buyer to serve as a stalking horse bidder who can help this facility survive," Mary Carruthers, board president of the facility, said in the statement.

A "stalking horse" is a term assigned to a potential bidder who will float a viable purchase price for a bankrupt property. This process is designed to set a bar that prevents low-end buyers from underbidding.

The statement identified Westmont Development, a senior living management firm in La Jolla, as the stalking horse bidder.

The first hearing will likely be this week at which time Altavita will file several motions to ensure it has enough money to operate during the bankruptcy. The facility estimates it needs about $4.25 million, to be provided by existing secured lenders, according to the statement.

Also, the facility's current management company, Eskaton, will continue to run Altavita.

The bankruptcy auction to determine the new owner will likely happen in May.

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