Certus is honored to receive Minnesota Turnaround Management Association’s (TMA) 2018 Turnaround of the year for the successful stabilization and sale of a 110-unit senior care facility, Manor House, in Grand Rapids, MN.
Manor House was under distress, with a several year track record of declining earnings (EBITDA) due largely to decreased occupancy and expenses not being properly managed. The facility began to experience deferred maintenance as a result.
To facilitate the turnaround, Certus negotiated a 12-month forbearance agreement with the debtor, allowing the time needed to stabilize operations with the goal to transact the facility at a price acceptable for all parties.
The turnaround began with Certus assessing the long-term viability and near-term operational changes needed to improve cash flow. After interviewing staff, retention agreements were entered into with key employees.
Certus provided operational oversight with a focus on increasing cash flow through targeted marketing efforts to untapped sources and emphasizing the quality of care being provided to improve census. They worked to ensure care plans were being billed appropriately, improved collections of receivables, and employed other cost containment measures. Certus also implemented a budget-conscious capital improvement campaign to preserve the value of the assets which was funded by improved cash flow.
Within 12 months of beginning the turnaround, occupancy at Manor House was the highest it had been in years and the trailing 12-month adjusted EBITDA increased from $225,000 to approximately $700,000. The operational and capital improvements allowed the property to be sold at a level sufficient for all parties.
The process for Manor House was carried out through effective communication with the secured creditors and interested parties, leading to the highest potential recovery in the timeline permitted. The stabilization and sale also provide long term stability for the employees and residents of Manor House.
Please read a case study to learn more: https://certusfin.com/wp-content/uploads/2018/12/Case-Study-Manor-House.pdf