Court filings in the federal bankruptcy case of a Bloomington retirement community show its debt is nearly six times higher than the value of its property.
Attorneys for Luther Oaks said the buildings and other property for the senior living center on the southwest side of Bloomington are worth about $31 million. The company owned by the Arlington Heights-based Lutheran Life Communities has debts of more than $179 million.
Lutheran Life's other three facilities in Illinois and Indiana are similarly leveraged.
Luther Oaks, Wittenberg Village, Lutheran Home, Pleasant View, associated foundations for those entities, and a skilled care and memory care service company have total assets of about $223 million, while liabilities are north of $1.08 billion.
In its entirety, documents show Lutheran Life is leveraged at nearly five times its value.
The bulk of those liabilities appear to be secured debt owed to lending institutions, though some unsecured debt is listed. It is not clear from the documents whether amounts owed to heirs of residents of the retirement community who have passed away are included in that unsecured debt.
It is common in upscale retirement communities to require a large buy-in fee when residents move in. If the residency lasts for a period of years, heirs generally get up to 75% of that fee back unless it has been diminished by charges for assisted living or memory care services in the interim.
Some heirs whose parent(s) passed away in mid-2024 have said they are still waiting for that reimbursement from Luther Oaks.
Lutheran Life is asking the court for reorganization under Chapter 11. The next hearing in the Northern District of Illinois Bankruptcy court is scheduled for April 2.
