Grand Court Lifestyles files for Chapter 11
By Meredith Bonner, ALBR Editor
Grand Court Lifestyles’ (Boca Raton, FL) cash flow problems have led the company to bankruptcy. The company has filed a voluntary petition for Chapter 11 bankruptcy protection after failing to make interest payments due March 1 on $13.6 million of debt.
Grand Court also did not make March 1 rent payments for its corporate offices in Boca Raton, FL, and in Fort Lee, NJ, the company says.
Nasdaq has halted trading of Grand Court stock and says the halt will remain until more information about the bankruptcy filing is provided. The company’s new symbol, which was effective March 24, is GCLIQ.
Grand Court told the Palm Beach Post earlier in March that it was then considering a sale or recapitalization in the wake of its financial problems. The company said at the time that it might be in default on some debt obligations and that, to conserve cash, it had stopped building communities. Grand Court told the Post that its financial picture must improve or it won’t be able to pay debts, management contracts, or operating expenses and would then have to file for bankruptcy.
In February, Grand Court said it renegotiated some loan covenants related to lease arrangements in order to avoid a default and would likely be in default if it didn’t renegotiate the covenants again. The company said last month one covenant requires it to maintain a tangible net worth of $19.2 million and that it expects to incur losses for the year ended Jan. 31 that will put its net worth below that level. The company said at that time that it would likely file for bankruptcy and that it continued to explore a sale recapitalization.
In October, the company announced that it was pursuing a growth strategy, focusing on developing assisted and independent living communities in key secondary markets in the United States. Grand Court said that it would be expanding its development program beyond Texas and into markets in the Southeast and Midwest, according to an October ALBR report.