ST. LOUIS (9/16/04) — Fortress NBA Acquisitions, LLC, has bid $210 million for all 11 of the National Benevolent Association's senior living facilities, making it the frontrunner in the mergers and acquisitions process initiated in June.
The National Benevolent Association (NBA), in a Sept. 14 news release, announced its board's approval of an asset purchase agreement to sell the facilities to Fortress, and said the agreement positions Fortress as a "stalking horse" bidder during an auction process. As such, other bidders would have to outdo Fortress in both terms and capital. If other qualified bids are received, an auction will be held.
A motion filed by NBA but not yet approved by the U.S. bankruptcy court states that Fortress would receive a $5 million "break up fee" if the facilities go to another bidder.
A memo circulated to residents of NBA Robin Run Village in Indianapolis said the terms of the deal are favorable to residents, including a guarantee of no rate increases for one year and an agreement to spend $10,000,000 on deferred maintenance and improvements at the facilities, after consulting with residents.
Additionally, the buyer would assume liability for entrance fees, residency agreements and service contracts associated with the facilities,the memo said.
Prior to NBA's Chapter 11 filing, residents had expressed concerns about entrance fee refunds.
John Bean, a Robin Run resident and member of its executive committee, said residents understand this is the beginning of the process, not the end. So far, residents are pleased with the proposed deal, Bean said.
A lifelong Disciple and retired pastor of North Christian Church, Columbus, Ind., Bean said residents lamented losing the NBA and Disciples ties, "but so be it. Our life savings are here and we've got to save them," he said.
The memo said NBA has the right to remove five facilities from the sales process: Barton W. Stone Christian Home, Kansas Christian Home, California Christian Home, Oklahoma Christian Retirement Community, and Lenoir Retirement Community.
In at least one instance, a Disciples of Christ region has said it would attempt to purchase a facility. The Oklahoma region announced in July it would bid on Oklahoma Christian Retirement Facility and keep it affiliated with the denomination.
NBA's news release said Fortress would offer employment to current employees of the facilities.
The U.S. Bankruptcy Court still must approve NBA's motions on establishing the bidding process, setting a bid deadline and auction date, and related matters.
NBA has asked the court to consider these motions during a scheduled hearing on Sept. 30, and proposed Nov. 19 as the auction date.
After the auction, the deal would be presented to the court for approval, followed by regulatory approval prior to the closing.
NBA's news release gave a March 31, 2005 closing date for the Fortress deal, but said it could take place sooner.