One of the nation’s Largest senior living communities has initiated Chapter 11 Bankruptcy proceedings, citing the negative impact of the Covid-19 pandemic. 

The Community, Friendship Village of Schaumburg in Schaumburg, Illinois, is initiating Chapter 11 proceedings in the U.S. Bankruptcy Court for the Northern District of Illinois, according to a news release issued Friday afternoon.

During bankruptcy proceedings, the life plan community will continue operations..

Alongside the bankruptcy case, the community requested the court approve a new marketing and sale process subject to court oversight to “maximize value” for creditors and stakeholders.

“By taking these steps toward a healthier financial structure, FVS will gain the financial flexibility to make material improvements that will further enrich our campus, amenities, and services,” CEO Mike Flynn said in a news release.

Friendship Village of Schaumburg is largest in Illinois, according to the company’s website. It is also ranked as the No. 22 largest not-for-profit senior living community in the U.S., according to the 2022 LeadingAge-Ziegler 200.

Troubles from the pandemic and a decrease in move-ins and tours led to the community’s financial hardships. Last year, the community started discussions to find a “consensual solution” to strengthen the community’s financial standing and build towards a new future.

“Stakeholders believe the best solution is to utilize the bankruptcy process to run a marketing and sale process to select a potential purchaser and, after an auction, a winning bidder,” the company’s news release states.

In terms of addressing resident refund obligations, the company said it will address that area “after a successful realignment and outcome is reached.” Resident deposits received after April 17 will be held in escrow under an agreement to protect deposited funds as typical in life plan communities.

When fully occupied, the community can house up to 1,000 older adults. The life plan community first opened in 1977 on a 60-acre campus.

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