Eagle Senior Living, a nonprofit operator of 15 facilities in seven states, has filed for bankruptcy to restructure its roughly $235 million in municipal bond debt, the latest continuing-care community to seek protection from creditors during a pandemic that has increased labor costs, WSJ Pro Bankruptcy reported. The Ann Arbor, Mich.-based business filed for chapter 11 protection on Friday in the U.S. Bankruptcy Court in Wilmington, Del., with plans to reduce its debt by $40 million and transfer and possibly sell certain facilities to new operators. Eagle Senior said that it was having financial trouble before the pandemic but is the latest senior-care business to come under increasing financial pressure due to the COVID-19 pandemic, unable to make debt service payments. Occupancy rates have declined to roughly 81% from more than 90% before the pandemic, Todd Topliff, president of parent American Eagle Delaware Holding Co., said in a sworn declaration. Meanwhile, staffing costs have risen because of outbreak-related hazard payments and overtime, sign-on bonuses and wage increases to make up for “unprecedented” labor shortages across Eagle Senior’s facilities, he said. The business said it had to turn to staffing agencies to supplement its workforce, and continues to combat labor shortages it attributed to vaccine mandates and competition from other industries for workers. Costs also piled up for personal protective equipment, as well as food containers so meals could be personally delivered to residents’ rooms instead of eating in a dining room, Mr. Topliff said in court papers. Supply shortages of various products also added to costs. The business has been operating under several forbearance agreements. The business operates in Colorado, Minnesota, Wisconsin, Ohio, Alabama, Tennessee and Florida and has a total of 1,000 residents. It has 362 independent living apartments, 641 assisted living units, and 192 memory care units. COVID-19’s rapid spread through eldercare facilities, along with the pandemic’s lockdowns, have deterred many older Americans from moving into senior communities. Nearly 8% of the $41 billion in outstanding senior-living bonds are in default as of December, according to Municipal Market Analytics, the most since tracking began in 2009. The sector now accounts for almost one-quarter of defaulted debt in the muni market, not including bonds caught up in Puerto Rico’s bankruptcy.
