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Full title: Motion to Approve Compromise under Rule 9019 Reorganized Debtors' Motion for Entry of Order Approving Compromise and Settlement with MRT Landlord Pursuant to 11 U.S.C. § 105(a) and Rule 9019 of the Federal Rules of Bankruptcy Procedure Filed by AAC Holdings, Inc.. Hearing scheduled for 5/19/2021 at 03:00 PM at US Bankruptcy Court, 824 Market St., 3rd Fl., Courtroom #7, Wilmington, Delaware. Objections due by 5/12/2021. (Attachments: # 1 Exhibit 1 - Proposed Order # 2 Exhibit 2 - Compromise Agreement # 3 Notice) (Meloro, Dennis) (Entered: 04/28/2021)

Document posted on Apr 27, 2021 in the bankruptcy, 9 pages and 0 tables.

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Fitrx, LLC (5410); Oxford Treatment Center, LLC (7853); Oxford Outpatient Center, LLC (0237); Concorde Treatment Center, LLC (6483); New Jersey Addiction Treatment Center, LLC (7108); ABTTC, LLC (7601); Laguna Treatment Hospital, LLC (0830); AAC Las Vegas Outpatient Center, LLC (5381); Greenhouse Treatment Center, LLC (4402); AAC Dallas Outpatient Center, LLC (6827); Forterus Health Care Services, Inc. (4758); Solutions Treatment Center, LLC (8175); San Diego Addiction Treatment Center, Inc. (1719); River Oaks Treatment Center, LLC (0640); Singer Island Recovery Center LLC (3015); B&B Holdings Intl LLC (8549); The Academy Real Estate, LLC (9789); BHR Oxford Real Estate, LLC (0023); Concorde Real Estate, LLC (7890); BHR Greenhouse Real Estate, LLC (4295); BHR Ringwood Real Estate, LLC (0565); BHR Aliso Viejo Real Estate, LLC (2910); Behavioral Healthcare Realty, LLC (2055); Clinical Revenue Management Services, LLC (8103); Recovery Brands, LLC (8920); Referral Solutions Group, LLC (7817); Taj Media LLC (7047); Sober Media Group, LLC (4655); American Addiction Centers, Inc. (3320); Tower Hill Realty, Inc. (0039); Lincoln Catharine On or about August 9, 2017, the Debtor Tenant and MRT Landlord entered into that certain Master Lease dated as of August 9, 2017 (the “Existing Master Lease”), by and between Concorde Real Estate, LLC, BHR Greenhouse Real Estate, LLC, AAC Las Vegas Outpatient Center, LLC, and AAC Dallas Outpatient Center, LLC (collectively, the “Debtor Tenant”), pursuant to which the Debtor Tenant leases from MRT Landlord the following drug and alcohol rehabilitation outpatient and/or sober lodging facilities: (i)No. 439, of which $163,432.94 was filed as a general unsecured claim (the “AAC Las Vegas Unsecured Claim”); (iii) proof of claim in the amount of $545,012.80 filed against BHR Greenhouse Real Estate, LLC and designated Claim No. 440, of which $517,537.45 was filed as a general unsecured claim (the “BHR Greenhouse (iv) proof of claim in the amount of $545,012.80 filed against Concorde Real Estate, LLC and designated Claim No. 443, of which $517,537.45 was filed as a general unsecured claim (the “Concorde RE Unsecured Claim”); and (v) proof of claim in the amount of $1,430,801.33 filed against AAC Holdings, Inc. and designated Claim No. 444, of which $1,361,940.78 was filed as a general unsecured claim (the “AAC Unsecured Claim,” and together with the AAC Dallas Unsecured Claim the AAC Las Vegas Unsecured Claim, the BHR Greenhouse Unsecured Claim, and the Concorde RE Unsecured Claim, the “Unsecured Claims”).The POCs also include administrative expense claims in respect of rent due and owing, but unpaid, under the terms of the Existing Master Lease, for the period of June 20, 2020, through June 30, 2020 (collectively, the “Administrative Claims”) as follows: (i) administrative expense claim against AAC Dallas Outpatient Center, LLC in the amount of $8,676.43; (ii) administrative expense claim agains

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IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: Chapter 11 AAC HOLDINGS, INC., et al.,1 Case No. 20-11648 (CTG) Reorganized Debtors. (Jointly Administered) Hearing Date: May 19, 2021 at 3:00 p.m. Objection Deadline: May 12, 2021 at 4:00 p.m. REORGANIZED DEBTORS’ MOTION FOR ENTRY OF ORDER APPROVING COMPROMISE AND SETTLEMENT WITH MRT LANDLORD PURSUANT TO 11 U.S.C. § 105(a) AND RULE 9019 OF THE FEDERAL RULES OF BANKRUPTCY PROCEDURE The above-captioned reorganized debtors (collectively, the “Debtors” or the “Reorganized Debtors”) hereby move this Court (the “Motion”) for entry of an order, substantially in the form attached hereto as Exhibit 1 (the “Proposed Order”), approving the Reorganized Debtor’s proposed compromise and settlement with MRT of Nevada-ATF, LLC and MRT of Texas-ATF, LLC (collectively, “MRT Landlord”), joined by Peter Kravitz as the Litigation Trustee (the 1 The Reorganized Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification number, are: Recovery First of Florida, LLC (3005); Fitrx, LLC (5410); Oxford Treatment Center, LLC (7853); Oxford Outpatient Center, LLC (0237); Concorde Treatment Center, LLC (6483); New Jersey Addiction Treatment Center, LLC (7108); ABTTC, LLC (7601); Laguna Treatment Hospital, LLC (0830); AAC Las Vegas Outpatient Center, LLC (5381); Greenhouse Treatment Center, LLC (4402); AAC Dallas Outpatient Center, LLC (6827); Forterus Health Care Services, Inc. (4758); Solutions Treatment Center, LLC (8175); San Diego Addiction Treatment Center, Inc. (1719); River Oaks Treatment Center, LLC (0640); Singer Island Recovery Center LLC (3015); B&B Holdings Intl LLC (8549); The Academy Real Estate, LLC (9789); BHR Oxford Real Estate, LLC (0023); Concorde Real Estate, LLC (7890); BHR Greenhouse Real Estate, LLC (4295); BHR Ringwood Real Estate, LLC (0565); BHR Aliso Viejo Real Estate, LLC (2910); Behavioral Healthcare Realty, LLC (2055); Clinical Revenue Management Services, LLC (8103); Recovery Brands, LLC (8920); Referral Solutions Group, LLC (7817); Taj Media LLC (7047); Sober Media Group, LLC (4655); American Addiction Centers, Inc. (3320); Tower Hill Realty, Inc. (0039); Lincoln Catharine Realty Corporation (5998); AdCare Rhode Island, Inc. (2188); Green Hill Realty Corporation (4951); AdCare Hospital of Worcester, Inc. (3042); Diversified Healthcare Strategies, Inc. (3809); AdCare Criminal Justice Services, Inc. (1653); AdCare, Inc. (7005); Sagenex Diagnostics Laboratory, LLC (7900); RI - Clinical Services, LLC (6291); Addiction Labs of America, LLC (1133); AAC Healthcare Network, Inc. (0677); AAC Holdings, Inc. (6142); San Diego Professional Group, P.C. (9334). Grand Prairie Professional Group, P.A. (2102); Palm Beach Professional Group, Professional Corporation (7608); Pontchartrain Medical Group, A Professional Corporation (1271); Oxford Professional Group, P.C. (8234); and Las Vegas Professional Group - Calarco, P.C. (5901). The location of the Reorganized Debtors’ corporate headquarters is 200 Powell Place, Brentwood, TN 37027.

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“Litigation Trustee”), of certain disputes between the Reorganized Debtors and MRT Landlord (collectively, the “Parties”), as memorialized in that certain Compromise Agreement, dated as of April 28, 2021, by and among the Parties, attached hereto as Exhibit 2 (the “Compromise Agreement”)2, pursuant to section 105(a) the Bankruptcy Code and Rule 9019 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”). In support of the Motion, the Reorganized Debtors respectfully represent as follows: JURISDICTION AND VENUE 1. The United States Bankruptcy Court for the District of Delaware (the “Court”) has jurisdiction over this Motion pursuant to 28 U.S.C. §§ 157 and 1334 and the Amended Standing Order of Reference from the United States District Court for the District of Delaware, dated February 29, 2012. This matter is a core proceeding within the meaning of 28 U.S.C. § 157(b)(2). Under Local Rule 9013-1(f), the Reorganized Debtors consent to entry of a final order under Article III of the United States Constitution. Venue is proper in this district pursuant to 28 U.S.C. §§ 1408 and 1409. 2. The statutory bases for the relief requested herein are sections 365 and 105(a) of the Bankruptcy Code. Such relief also is warranted under Bankruptcy Rule 9019(a). BACKGROUND A. The Chapter 11 Cases 3. On June 20, 2020 (the “Petition Date”), each of the Debtors filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code in this Court. 2 Attached hereto is an execution version of the Compromise Agreement. A fully executed Compromise Agreement will be filed with the Court as soon as administratively possible following the filing of this Motion.

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4. On July 2, 2020, the United States Trustee appointed the official committee of unsecured creditors (the “Committee”) in the above-captioned chapter 11 cases (the “Chapter 11 Cases”). See Docket No. 97. 5. On October 20, 2020, the Court entered the Order Confirming Second Amended Joint Chapter 11 Plan of AAC Holdings, Inc. and its Debtor Affiliates [Docket No. 695] (the “Confirmation Order”), which confirms the Second Amended Joint Chapter 11 Plan of AAC Holdings, Inc. and its Debtor Affiliates [Docket No. 647] (together with all modifications, amendments and supplements, the “Plan”). 6. On December 11, 2020, the Plan became effective [Docket No. 807] (the “Effective Date”). B. Rejection of the Existing Master Lease and Entry into New Master Lease 7. On or about August 9, 2017, the Debtor Tenant and MRT Landlord entered into that certain Master Lease dated as of August 9, 2017 (the “Existing Master Lease”), by and between Concorde Real Estate, LLC, BHR Greenhouse Real Estate, LLC, AAC Las Vegas Outpatient Center, LLC, and AAC Dallas Outpatient Center, LLC (collectively, the “Debtor Tenant”), pursuant to which the Debtor Tenant leases from MRT Landlord the following drug and alcohol rehabilitation outpatient and/or sober lodging facilities: (i) Desert Hope Outpatient Center, 3441 S. Eastern Avenue, Las Vegas, Nevada 89189; (ii) Resolutions Las Vegas, 1000 Main Street, Las Vegas, Nevada 89101; (iii) Greenhouse Outpatient Center, 2301 Avenue J, Arlington, Texas 76006; and (iv) Resolutions Arlington, 1075 Wet N Wild Way, Arlington, Texas 76011 (collectively, the “Facilities”). 8. The Existing Master Lease is listed on the Schedule of Rejected Executory Contracts and Unexpired Leases (the “Rejection Schedule”) included with the Plan Supplement

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filed with the Court.3 See Docket No. 582, Ex. F. at 18. The Existing Master Lease was deemed rejected as of January 16, 2021, but the Debtor Tenant and MRT Landlord intend to enter into a new master lease (the “New Master Lease”), the form of which is attached as Exhibit B to the Compromise Agreement. The entry into the New Master Lease would result in substantial savings to the Reorganized Debtors as the lease payments would be reduced by more than 40% for an annual savings of over $930,000. C. Proofs of Claim 9. On August 17, 2020, MRT Landlord timely filed the following proofs of claim (collectively, the “POCs”): (i) proof of claim in the amount of $172,109.38 filed against AAC Dallas Outpatient Center, LLC and designated Claim No. 438, of which $163,432.94 was filed as a general unsecured claim (the “AAC Dallas Unsecured Claim”); (ii) proof of claim in the amount of $172,109.38 filed against AAC Las Vegas Outpatient Center, LLC and designated Claim No. 439, of which $163,432.94 was filed as a general unsecured claim (the “AAC Las Vegas Unsecured Claim”); (iii) proof of claim in the amount of $545,012.80 filed against BHR Greenhouse Real Estate, LLC and designated Claim No. 440, of which $517,537.45 was filed as a general unsecured claim (the “BHR Greenhouse Unsecured Claim”); (iv) proof of claim in the amount of $545,012.80 filed against Concorde Real Estate, LLC and designated Claim No. 443, of which $517,537.45 was filed as a general unsecured claim (the “Concorde RE Unsecured Claim”); and (v) proof of claim in the amount of $1,430,801.33 filed against AAC Holdings, Inc. and designated Claim No. 444, of which $1,361,940.78 was filed as a general unsecured claim (the “AAC Unsecured Claim,” and together with the AAC Dallas Unsecured Claim the AAC Las Vegas Unsecured Claim, the BHR Greenhouse Unsecured Claim, and the Concorde RE Unsecured Claim, the “Unsecured Claims”). 3 The Debtors filed the Rejection Schedule and amendments thereto with the Plan Supplement [Docket Nos. 582, Ex. F; 651, Ex. F-1; and 667, Exhibit F-2].

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10. The POCs also include administrative expense claims in respect of rent due and owing, but unpaid, under the terms of the Existing Master Lease, for the period of June 20, 2020, through June 30, 2020 (collectively, the “Administrative Claims”) as follows: (i) administrative expense claim against AAC Dallas Outpatient Center, LLC in the amount of $8,676.43; (ii) administrative expense claim against AAC Las Vegas Outpatient Center, LLC in the amount of $8,676.43; (iii) administrative expense claim against BHR Greenhouse Real Estate, LLC in the amount of $27,475.35; (iv) administrative expense claim against Concorde Real Estate, LLC in the amount of $27,475.35; and (v) administrative expense claim against AAC in the amount of $72,303.55. 11. The Reorganized Debtors have raised informal objections to the POCs. In particular, the Reorganized Debtors were concerned that MRT Landlord would receive a “double” dividend” on account of Claim No. 444 when MRT Landlord is entitled to single satisfaction of its claims. D. The Compromise Agreement 12. Rather than litigating objections to the POCs and any issues related to the rejection of the Existing Master Lease, the Parties, including the Litigation Trustee, engaged in arms’-length negotiations and ultimately reached a compromise (the “Settlement”) that would, among other things, resolve all issues among the Parties under the terms set forth in the Compromise Agreement, other than the Rejection Damages Claim (as defined herein). The Settlement is memorialized in the Compromise Agreement, and, in sum, provides for the filing of this Motion and requesting entry of an order approving and/or ordering, among other things: • the entry into the New Master Lease, effective as of the earlier of June 1, 2021 or the Effective Date (as that term is defined in the Compromise Agreement) of the Compromise Agreement and having a Commencement Date of January 1, 2021;

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• the execution of a guaranty of the New Master Lease (the “New Guaranty”) by AAC New HoldCo Inc., a Delaware corporation (“AAC New HoldCo”), the form of which is attached as Exhibit C to the Compromise Agreement, effective as of the earlier of June 1, 2021, or the Effective Date of the Compromise Agreement and having a Commencement Date of January 1, 2021; • the allowance of the Unsecured Claims in the amount of $1,361,940.78 as Class 5 General Unsecured Claims under the Plan; provided, however, that MRT Landlord is entitled to single satisfaction and to recover only once on account of its claims; • the allowance of the Administrative Claims in the amount of $68,860.54, which sum is to be paid by the Reorganized Debtors to MRT Landlord not later than five business days after the Effective Date as defined in the Compromise Agreement; and • the submission by MRT Landlord of proofs of claim (the “Rejection Damages Claim”) based on the rejection of the Existing Master Lease to be filed with the Debtors’ claims agent no later than thirty (30) days after the date of an order approving this Motion, if not already submitted. RELIEF REQUESTED 13. By the Motion, the Reorganized Debtors respectfully request that the Court enter an order, substantially in the form of the Proposed Order attached hereto as Exhibit 1, approving the Settlement between the Parties memorialized in the Compromise Agreement, including the entry into the New Master Lease and the allowance of the Unsecured Claims and the Administrative Claims, each as set forth above. BASIS FOR RELIEF I. Approval of the Settlement and the Compromise Agreement 14. The Reorganized Debtors request entry of an order approving the Settlement and the Compromise Agreement pursuant to section 105(a) of the Bankruptcy Code and Bankruptcy Rule 9019. Section 105(a) of the Bankruptcy Code provides that “[t]he court may issue any order . . . that is necessary or appropriate to carry out the provisions of this title.” 11 U.S.C. § 105(a). Bankruptcy Rule 9019(a) provides that: On motion by the trustee [or debtor in possession] and after notice and a hearing, the court may approve a compromise or settlement. Notice shall be given to

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creditors, the United States trustee, the debtor, and indenture trustees as provided in Rule 2002 and to any other entity as the court may direct. Fed. R. Bankr. P. 9019(a). 15. The decision to approve a compromise under Bankruptcy Rule 9019 is committed to the Court’s sound discretion. See In re Louise’s, Inc., 211 B.R. 798, 801 (D. Del. 1997). However, the Court may approve a settlement if and only if it is “fair and equitable” to creditors as a body. See Will v. Nw. Univ. (In re Nutraquest, Inc.), 434 F.3d 639, 644 (3d Cir. 2006). To assess whether a settlement is fair and equitable, the Court must weigh the value of the claim that is being settled against the settlement’s value. See Myers v. Martin (In re Martin), 91 F.3d 389, 393 (3d Cir. 1996). In making this determination, the United States Court of Appeals for the Third Circuit has enumerated four factors that the Court should consider: (a) “the probability of success in litigation,” (b) “the likely difficulties in collection,” (c) “the complexity of the litigation involved, and the expense, inconvenience and delay necessarily attending it,” and (d) “the paramount interest of the creditors.” Id.; accord Nutraquest, 434 F.3d at 644. Because the Court cannot estimate a claim’s value precisely, the Court may approve a settlement—even if it is not “the best possible compromise”—if it “is within the reasonable range of litigation possibilities.” In re World Health Alts., Inc., 344 B.R. 291, 296 (Bankr. D. Del. 2006) (quoting In re Coram Healthcare Corp., 315 B.R. 321, 330 (Bankr. D. Del. 2004) and In re Penn Cent. Transp. Co., 596 F.2d 1102, 1114 (3d Cir. 1979)). As the Court has noted, settlements are encouraged and favored in bankruptcy because they reduce litigation and expedite the estate’s administration. See In re Key3Media Grp., Inc., 336 B.R. 87, 93 (Bankr. D. Del. 2005). 16. Here, the Reorganized Debtors submit that the Martin factors are satisfied. The Settlement represents a global resolution of all issues and claims among the Parties including, without limitation, the entry into the New Master Lease, and the informal objections to the POCs.

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were to be litigated, the Reorganized Debtors would be forced to incur substantial costs with respect thereto. Such litigation is not without risk. Absent the Settlement, the Parties would be forced to litigate several issues. Instead, the Settlement mitigates the attendant risk and cost of litigation, provides the Parties with a mechanism for a smooth transition from the rejected Existing Master Lease to the New Master Lease, results in substantial costs savings to the Reorganized Debtors due to the reduction in the amount of the lease payments, and allows the Reorganized Debtors to reconcile the claims asserted by MRT Landlord. 17. In sum, the Reorganized Debtors submit that the Martin factors are satisfied under the circumstances here. Moreover, the Settlement was negotiated at arm’s-length among the Parties, is joined by the Litigation Trustee, and provides substantial benefits to the Reorganized Debtors, the Debtors’ estates and creditors. Accordingly, for the foregoing reasons, the Reorganized Debtors submit that the Settlement is “fair and equitable” and that the Settlement between, as memorialized in the Compromise Agreement, should be approved. NOTICE 18. Notice of this Motion has been or will be provided to: (i) the Office of the United States Trustee for the District of Delaware; (ii) counsel to the Litigation Trustee; (iii) counsel to the ad hoc committee of certain Senior Lenders and Junior Lenders and the Initial DIP Lenders; (iv) counsel to the Prepetition Agents; and (v) any party who has requested notice in these Chapter 11 Cases. The Reorganized Debtors submit that, in light of the nature of the relief requested, no other or further notice need be given. NO PRIOR REQUEST 19. No previous request for the relief sought herein has been made by the Reorganized Debtors to this Court or any other court. [Remainder of Page Intentionally Left Blank]

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CONCLUSION WHEREFORE, the Reorganized Debtors respectfully request that this Court enter an order, substantially in the form of the Proposed Order attached hereto as Exhibit 1 and grant such other and further relief as is just and proper. Dated: April 28, 2021 Respectfully submitted, Wilmington, Delaware GREENBERG TRAURIG, LLP /s/ Dennis A. Meloro Dennis A. Meloro (DE Bar No. 4435) The Nemours Building 1007 North Orange Street, Suite 1200 Wilmington, Delaware 19801 Telephone: (302) 661-7000 Facsimile: (302) 661-7360 Email: melorod@gtlaw.com - and - David B. Kurzweil (admitted pro hac vice) Alison Elko Franklin (admitted pro hac vice) Terminus 200 3333 Piedmont Road, NE, Suite 2500 Atlanta, Georgia 30305 Telephone: (678) 553-2100 Facsimile: (678) 553-2212 Email: kurzweild@gtlaw.com franklinae@gtlaw.com Counsel for the Reorganized Debtors

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