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Full title: Objection to Resident Deposit Motion Filed by Interested Party State of New Hampshire Department of Insurance (RE: related document(s) 21 Motion (BK) filed by Debtor The Prospect-Woodward Home) (Attachments: # 1 Exhibit) (Helman, Andrew) (Entered: 09/02/2021)

Document posted on Sep 1, 2021 in the bankruptcy, 4 pages and 0 tables.

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LIMITED OBJECTION TO THE EMERGENCY EX PARTE MOTION OF THE DEBTOR FOR ENTRY OF AN ORDER AUTHORIZING DEBTOR TO MAINTAIN ESCROW ARRANGEMENTS IN THE ORDINARY COURSE AND REFUNDCERTAIN RESIDENT DEPOSITS The State of New Hampshire (the “State”), acting through the New Hampshire Department of Insurance (“DOI”) files this limited objection to the Emergency Ex Parte Motion of Debtor for Entry of an Order Authorizing Debtor to Maintain Escrow Arrangements in the Ordinary Course and Refund Certain Resident Deposits, filed by The Prospect-Woodward HomePursuant to Chapter 420-D, the Commissioner is responsible for, among other things, licensing continuing care retirement communities, issuing a certificate of authority to operate, and approving disclosure statements of risks to be provided to prospective residents.(“The commissioner may refuse to approve such transfer until full disclosure has been made, to his satisfaction, of the terms and conditions of the transfer and he has determined that such transfer is in the best interests of the residents and the state of New Hampshire.”).Thus there is no basis for this Court to exercise jurisdiction over such property, and it should not be subject to the terms of any order authorizing use of property that may be cash collateral (as defined in the Bankruptcy Code).

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UNITED STATES BANKRUPTCY COURT DISTRICT OF NEW HAMPSHIRE In re: ) ) Chapter 11 The Prospect-Woodward Home, ) ) Case No. 21-10523 Debtor. ) ) STATE OF NEW HAMPSHIRE’S LIMITED OBJECTION TO THE EMERGENCY EX PARTE MOTION OF THE DEBTOR FOR ENTRY OF AN ORDER AUTHORIZING DEBTOR TO MAINTAIN ESCROW ARRANGEMENTS IN THE ORDINARY COURSE AND REFUND CERTAIN RESIDENT DEPOSITS The State of New Hampshire (the “State”), acting through the New Hampshire Department of Insurance (“DOI”) files this limited objection to the Emergency Ex Parte Motion of Debtor for Entry of an Order Authorizing Debtor to Maintain Escrow Arrangements in the Ordinary Course and Refund Certain Resident Deposits, filed by The Prospect-Woodward Home [Dkt. No. 21] (the “Debtor”). LIMITED BACKGROUND 1. DOI is a regulatory agency with supervisory authority over the Debtor’s business operations, as set forth in Chapter 420-D of the New Hampshire Revised Statutes. Pursuant to Chapter 420-D, the Commissioner is responsible for, among other things, licensing continuing care retirement communities, issuing a certificate of authority to operate, and approving disclosure statements of risks to be provided to prospective residents. N.H. RSA 420-D:4. Chapter 420-D further requires robust financial reporting be provided to the Commissioner and that a continuing

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care retirement community maintain cash reserves at statutorily-mandated levels. N.H. RSA Ch. 420-D:7-8.1 2. The Commissioner further has authority to “file a lien in accordance with RSA 420-D:9 on the real and personal property of the provider and take any other action necessary to protect the residences of the facility.” Consistent with this, the Commissioner also may petition an appropriate court to appoint a trustee to rehabilitate or liquidate a continuing care retirement community, under certain circumstances. N.H. RSA 420-D:16. 3. The Commissioner, along with the New Hampshire Department of Justice Charitable Trusts Director, must approve of any transaction by which the Debtor will sell its assets. RSA 420-D:13 (“The commissioner may refuse to approve such transfer until full disclosure has been made, to his satisfaction, of the terms and conditions of the transfer and he has determined that such transfer is in the best interests of the residents and the state of New Hampshire.”). 4. There are civil and criminal penalties for a failure to comply with applicable law governing continuing care requirement communities. N.H. RSA 420-D:20, 26. 5. For a period of several months, DOI has been in regular contact with the Debtor regarding its financial stability and the potential for a sale of its assets. LIMITED ARGUMENTS IN OBJECTION 6. DOI objects to the Motion on a limited basis and requests three changes to the proposed order. First, DOI request that paragraph 2 of the proposed order indicate that any modifications to the relevant agreements are subject to applicable nonbankruptcy law and any necessary approvals. Second, DOI requests a general reservation of rights be added to make clear that the order does not alter DOI’s regulatory or police power rights and obligations. Third, DOI 1 The Debtor also must provide a disclosure statement containing certain information to prospective residents. The Debtor’s disclosure statement must be updated to reflect its status as a debtor. N.H. 420-D:4.

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objects to paragraph 8. It appears that the Debtor seeks to take the position that the New Resident deposits are not property of the estate. Thus there is no basis for this Court to exercise jurisdiction over such property, and it should not be subject to the terms of any order authorizing use of property that may be cash collateral (as defined in the Bankruptcy Code). 7. Attached as Exhibit A is a revised proposed order that would be acceptable to the State. CONCLUSION DOI respectfully requests that the Court grant the Motion by entry of the proposed order attached to this Objection and grant such further and additional relief as the Court deems proper. Respectfully submitted, The State of New Hampshire, acting through its attorneys Dated: September 2, 2021 /s/ J. Christopher Marshall James T. Boffetti, Associate Attorney General J. Christopher Marshall 33 Capitol Street Concord, New Hampshire 03301-6397 (603) 271-3650 (Mr. Boffetti) (603) 271-1210 (Mr. Marshall) james.t.boffetio@doj.nh.gov c.j.marshall@doh.nh.gov and /s/ Andrew C. Helman Andrew C. Helman (admitted pro hac vice) DENTONS BINGHAM GREENEBAUM, LLP 254 Commercial Street, Suite 245 Merrill’s Wharf Portland, Maine 04101 (207) 619-0919 andrew.helman@dentons.com

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Gina M. Young (admitted pro hac vice) DENTONS BINGHAM GREENEBAUM, LLP 3500 PNC Tower 101 S. Fifth St. Louisville, KY 40202 (502) 587-3606 gina.young@dentons.com

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