Roy M. Terry, Jr., VSB No. 17764

William A. Gray, VSB No. 46911

John C. Smith, VSB No. 44556

SANDS ANDERSON PC

P.O. Box 1998

Richmond, Virginia 23218-1998

Telephone: 804.648.1636

Proposed Counsel for the Debtors

UNITED STATES BANKRUPTCY COURT

EASTERN DISTRICT OF VIRGINIA

Alexandria Division

In Re:

TCR III, INC. (f/k/a America House One, Inc.), Case No. 15-14162-BFK

EIN: 54-1910021

TCR IV, INC. (f/k/a America House Two, Inc.), Case No. 15-14163-BFK

EIN: 54-1892641

TCR V, INC. (f/k/a America House Three, Inc.), Case No. 15-14165-BFK

EIN: 54-1914323

TCR VI, INC., and Case No. 15-14168-BFK

EIN: 76-0801398

AMERICA HOUSE ASSISTED LIVING OF Case No. 15-14169-BFK

FRONT ROYAL, L.L.C.,

EIN: 54-2023050

Debtors. Chapter 11

DEBTOR'S MOTION FOR ORDER APPROVING

INTERIM USE OF CASH COLLATERAL AND

SETTING FINAL HEARING

COME NOW TCR III, Inc. (f/k/a America House One, Inc.); TCR IV, Inc. (f/k/a America

House Two, Inc.); TCR V, Inc. (f/k/a America House Three, Inc.); TCR VI, Inc.; and America

House Assisted Living of Front Royal, L.L.C. (collectively the "Debtors"), by counsel, and file

this motion pursuant to Bankruptcy Code §§ 105(a), 363, 1107(a) and 1108, and Federal Rule of

Bankruptcy Procedure 4001, for entry of an order approving the applicable Debtor to use cash

collateral on an interim basis pending final approval and setting procedures for providing

appropriate notice of the foregoing, and in support thereof state as follows:

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Jurisdiction

1. On November 24, 2015 (the "Petition Date"), each of the above-identified

debtors filed voluntary petitions seeking relief pursuant to Chapter 11 of the United States

Bankruptcy Code. Each debtor continues to manage and operate their respective business as a

debtor-in-possession in accordance with 11 U.S.C. §§ 1107 and 1108. No creditor's committee,

trustee, or examiner has been appointed in any of the cases. 1

2. The Court has jurisdiction over this motion pursuant to 28 U.S.C. § 157(b)(2).

Venue in this District is proper pursuant to 28 U.S.C. §§ 1408 and 1409.

Summary

3. Debtor TCR III, Inc. ("TCR III"), is a Virginia corporation licensed by the

Virginia Department of Social Services to operate an assisted living facility for up to 27 residents

at 10140 Hastings Drive, Manassas, Virginia 20110 (the "Manassas Facility"). TCR III owns

the Manassas Facility.

4. Debtor TCR IV, Inc. ("TCR IV") is a Virginia corporation licensed by the

Virginia Department of Social Services to operate an assisted living facility for up to 31 residents

at 680 University Lane, Orange, Virginia 22960 (the "Orange Facility"). TCR IV owns the

Orange Facility.

5. Debtor TCR V, Inc. ("TCR V") is a Virginia corporation licensed by the Virginia

Department of Social Services to operate an assisted living facility for up to 46 residents at 110

Spanish Oak Road, Stephens City, Virginia 22665 (the "Stephens City Facility"). TCR V owns

the Stephens Facility.

1

Concurrent with the filing of this motion, debtors have filed a Declaration of Charles V. Rice in Support of Initial

Motions.

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6. Debtor American House Assisted Living of Front Royal, L.L.C. ("America

House Front Royal") is a Virginia limited liability company licensed by the Virginia

Department of Social Services to operate an assisted living facility for up to 27 residents at 106

Westminster Drive, Front Royal, Virginia 22630 (the "Front Royal Facility") (together with the

Manassas Facility, the Orange Facility and the Stephens City Facility, the "Facilities"). America

House Front Royal owns the Front Royal Facility.

7. Debtor TCR VI, Inc. ("TCR VI") is a Virginia corporation with a mailing address

of 400A Kendrick Lane, Front Royal, Virginia 22630. TCR VI is wholly owned by TCR III.

TCR VI was formed to manage one or more Facilities, but has not taken over the management of

any of the Facilities.

8. For each of the Debtors except TCR VI, the residents in the Facilities are elderly

people who rely on the Debtor for their every need. As such, the Debtors' use of cash collateral

is essential to Debtors' reorganization success in that the Debtors need all of funds generated by

operations to pay for Debtor's post-petition operating expenses to continue care for the residents

at the facility without interruption.

9. Absent the availability of cash collateral, the Debtors will not be able to pay for

expenses necessary for the health, safety and welfare of its residents.

10. On or about May 28, 2015, TC10 Grantor Trust ("TC10 Trust") and TS

Cambridge Grantor Trust ("TS Cambridge Trust") (together with TC10 Trust, the "Secured

Parties") filed a complaint in state court against the Debtors seeking, among other things,

appointment of a receiver to take immediate custody and control of each of the Debtors pending

the Secured Parties sale of the Debtors' real and personal property. See TC10 Grantor Trust v.

TCR III, Inc., No. CL15-3871 (Cir. Ct. Prince William County) (the "State Court Action").

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11. Debtors filed bankruptcy on November 24, 2015, which stayed a hearing in the

State Court Action scheduled for November 30, 2015.

Debtors' Prepetition Financing

A. TCR III.

12. In the State Court Action, TC10 Trust alleges that it is the owner and holder of a

Deed of Trust Note, dated March 31, 1999, made by America House One, Inc. (TCR III's

predecessor-in-interest), in the original amount of $2,077,400.00 ("TCR III Note"). TC10 Trust

further alleges that the TCR III Note is secured by a Deed of Trust on the Manassas Facility

("Manassas Facility DOT"), and by a Security Agreement and certain financing statements

encumbering all personal property of TCR III, including, without limitation, inventory, accounts,

rents, equipment, furniture, furnishings, and intangibles (the "Manassas Facility Personal

Property").

13. On August 1, 2005, TC10 Trust and TCR III (together with other related debtorentities) entered into a Forbearance Agreement that, among other things provided for the

formation of TCR VI to manage the facilities, and in which the TC10 Trust agreed to forbear

from exercising foreclosure rights until December 1, 2006.

14. On October 1, 2007, TC10 Trust and TCR III (together with other related debtorentities) entered into a Second Forbearance Agreement that among other things extended the

"due and payable" date of the TCR III Note.

15. In the State Court Action, TC10 Trust alleges that, as of May 1, 2015, the

outstanding balance of the TCR III Note is $2,829,672.57, exclusive of attorneys' fees and costs.

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B. TCR IV.

16. In the State Court Action, TC10 Trust alleges that it is the owner and holder of a

Deed of Trust Note, dated February 25, 1999, made by America House Two, Inc. (TCR IV's

predecessor-in-interest), in the original amount of $2,295,000.00 ("TCR IV Note"). TC10 Trust

further alleges that the TCR IV Note is secured by a Deed of Trust on the Orange Facility

("Orange Facility DOT") and by a Security Agreement and certain financing statements

encumbering all personal property of TCR IV, including, without limitation, inventory, accounts,

rents, equipment, furniture, furnishings, and intangibles (the "Orange Facility Personal

Property").

17. On August 1, 2005, TC10 Trust and TCR IV (together with other related debtorentities) entered into a Forbearance Agreement that, among other things provided for the

formation of TCR VI to manage the facilities, and in which the TC10 Trust agreed to forbear

from exercising foreclosure rights until December 1, 2006.

18. On October 1, 2007, TC10 Trust and TCR IV (together with other related debtorentities) entered into a Second Forbearance Agreement that among other things extended the

"due and payable" date of the TCR IV Note.

19. In the State Court Action, TC10 Trust alleges that, as of May 1, 2015, the

outstanding balance of the TCR IV Note is $2,377,658.53, exclusive of attorneys' fees and costs.

C. TCR V.

20. In the State Court Action, TC10 Trust alleges that it is the owner and holder of a

Deed of Trust Note, dated July 18, 2000, made by America House Three, Inc. (TCR V's

predecessor-in-interest), in the original amount of $3,029,000.00 ("TCR V Note"). TC10 Trust

further alleges that the TCR V Note is secured by a Deed of Trust on the Stephens City Facility

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("Stephens City Facility DOT") and by a Security Agreement and certain financing statements

encumbering all personal property of TCR V, including, without limitation, inventory, accounts,

rents, equipment, furniture, furnishings, and intangibles (the "Stephens City Facility Personal

Property").

21. On August 1, 2005, TC10 Trust and TCR V (together with other related debtorentities) entered into a Forbearance Agreement that, among other things provided for the

formation of TCR VI to manage the facilities, and in which the TC10 Trust agreed to forbear

from exercising foreclosure rights until December 1, 2006.

22. On October 1, 2007, TC10 Trust and TCR V (together with other related debtorentities) entered into a Second Forbearance Agreement that among other things extended the

"due and payable" date of the TCR V Note.

23. In the State Court Action, TC10 Trust alleges that, as of May 1, 2015, the

outstanding balance of the TCR III Note is $4,812,941.41, exclusive of attorneys' fees and costs.

D. America House Front Royal.

24. In the State Court Action, TC Cambridge Trust alleges that it is the owner and

holder of a Deed of Trust Note, dated March 2, 2001, made by America House Front Royal, in

the original amount of $2,111,250.00 (the "America House Front Royal Note"). TC

Cambridge Trust further alleges that the America House Front Royal Note is secured by a Deed

of Trust on the Front Royal Facility ("Front Royal Facility DOT") and by a Security

Agreement and certain financing statements encumbering all personal property of TCR III,

including, without limitation, inventory, accounts, rents, equipment, furniture, furnishings, and

intangibles (the "Front Royal Facility Personal Property").

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25. In the State Court Action, TC10 Trust alleges that, as of May 1, 2015, the

outstanding balance of the America House Front Royal Note is $4,812,941.41, exclusive of

attorneys' fees and costs.

Relief Requested

26. By this Motion, Debtors seek interim authority to use the cash collateral of the

Secured Parties. Debtors believe, after preliminary investigation, that one or more of the

Secured Parties have a perfected security interest in the applicable Debtor's real estate and

substantially all personal property, including cash collateral. The cash collateral and rents

receivable of each Debtor is the only immediate sources of financing available to the Debtor and

none of the Debtors are able to secure other debtor-in-possession financing on better terms.

Basis for Relief

27. Bankruptcy Code § 363(c)(2) provides:

(2) The trustee may not use, sell, or lease cash collateral under

paragraph (1) of this subsection unless—

(A) each entity that has an interest in such cash collateral

consents; or

(B) the court, after notice and a hearing, authorizes such

use, sale, or lease in accordance with the provisions of this

section.

11 U.S.C. § 363(c)(2).

28. Federal Rule of Bankruptcy Procedure 4001(b)(2) provides:

Hearing. The court may commence a final hearing on a

motion for authorization to use cash collateral no earlier than 15

days after service of the motion. If the motion so requests, the

court may conduct a preliminary hearing before such 15 day period

expires, but the court may authorize the use of only that amount of

cash collateral as is necessary to avoid immediate and irreparable

harm to the estate pending a final hearing.

FED. R. BANKR. P. 4001(b)(2).

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29. Accordingly, the Debtors request that the Court grant interim approval of the use

of cash collateral.

30. Entry of a Cash Collateral Order is in the Best Interests of the Residents, Debtors,

the Creditors, and the Estates. The Debtors have engaged in a reasonable exploration of the

availability of alternate credit, but are unable to obtain post-petition credit. Because a substantial

amount of Debtors' assets are already encumbered with liens granted to the Secured Parties to

secure debts incurred prior to the Petition Date, the Debtors are unable to obtain, in the ordinary

course of business or otherwise, unsecured credit allowable pursuant to Bankruptcy Code

§ 503(b)(1) as an administrative expense in an amount necessary for the maintenance and

preservation of its assets and operation of its business on more advantageous economic and noneconomic terms than those offered under the Proposed Order.

31. Entry of the Proposed Order is in the best interests of the Residents, the Debtors,

their creditors and the estate, and will enable the Debtors among other things, to (i) pay

employees and trade creditors, (ii) maintain continuity of operations, and (iii) facilitate a smooth

transition into a successful reorganization.

32. Moreover, the Debtors submit that the use of cash collateral contemplated by the

Proposed Order is appropriate and proper under the facts herein. As indicated above, the

Debtors cannot care for the residents post-petition without the use of cash collateral.

33. Based upon the foregoing, the Debtors urge the Court to approve the Proposed

Order, thereby authorizing the Debtors to use cash collateral.

34. Notice and Final Hearing. No trustee, examiner or creditor's committee has been

appointed in this Chapter 11 case. Notice of this Motion has been given to (i) the United States

Trustee, (ii) counsel to the Secured Parties, and (iii) the Debtor's twenty largest creditors. Debtor

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submits that such notice is appropriate and sufficient under the circumstances, and that no other

or further notice is required.

35. Pursuant to Federal Rule of Bankruptcy Procedure 4001(b)(2), the Debtors

respectfully request that this Court schedule a final hearing on the relief sought in the Motion for

a date to coincide with the § 341 meeting of creditors. The Debtors further requests that they be

authorized to provide notice of the final hearing by serving a copy of the Motion, together with

the order approving the Proposed Order on an interim basis, upon (i) the United States Trustee,

(ii) counsel to the Secured Parties, (iii) the Debtor's twenty largest creditors, (iv) counsel for any

committee of unsecured creditors appointed pursuant to Bankruptcy Code § 1102, (v) any other

party which has filed a request for special notice with this Court and served such request on

Debtor's counsel, and (vi) such taxing authorities as may hold a claim against the Debtors.

36. No Prior Request. No previous request for the relief sought in this Motion has

been made to this or any other Court.

WHEREFORE, the applicable Debtor requests that the Court enter an order in the form

annexed hereto as Exhibit A, which among other things:

1. Authorizes Debtors to use cash collateral;

2. Sets the last time and date for the filing of objections to approval of the

Proposed Order on a final basis;

3. If an objection to the approval of the Proposed Order on a final basis is filed,

sets a hearing at a time and place set forth therein to consider approving the

Proposed Order on a final basis pursuant to Federal of Bankruptcy Procedure

4001;

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4. After the final hearing (if necessary), enter a final order, authorizing Debtors

to utilize the cash collateral in accordance with the terms and subject to the

provisions of the Proposed Order; and

5. Grant such other and further relief as is just and proper.

Dated: December 29, 2015 TCR III, INC., TCR IV, INC.,

TCR V, INC., TCR VI, INC., and

AMERICA HOUSE ASSISTED LIVING OF

FRONT ROYAL, L.L.C.,

by Proposed Counsel

/s/ Roy M. Terry, Jr.

Roy M. Terry, Jr., VSB No. 17764

William A. Gray, VSB No. 46911

John C. Smith, VSB No. 44556

SANDS ANDERSON PC

P.O. Box 1998

Richmond, VA 23218-1998

Telephone: 804.648.1636

Proposed Counsel for the Debtors

W3215680

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EXHIBIT A

Roy M. Terry, Jr., VSB No. 17764

William A. Gray, VSB No. 46911

John C. Smith, VSB No. 44556

SANDS ANDERSON PC

P.O. Box 1998

Richmond, Virginia 23218-1998

Telephone: 804.648.1636

Proposed Counsel for the Debtors

UNITED STATES BANKRUPTCY COURT

EASTERN DISTRICT OF VIRGINIA

Alexandria Division

In Re:

TCR III, INC. (f/k/a America House One, Inc.), Case No. 15-14162-BFK

EIN: 54-1910021

TCR IV, INC. (f/k/a America House Two, Inc.), Case No. 15-14163-BFK

EIN: 54-1892641

TCR V, INC. (f/k/a America House Three, Inc.), Case No. 15-14165-BFK

EIN: 54-1914323

TCR VI, INC., and Case No. 15-14168-BFK

EIN: 76-0801398

AMERICA HOUSE ASSISTED LIVING OF Case No. 15-14169-BFK

FRONT ROYAL, L.L.C.,

EIN: 54-2023050

Debtors. Chapter 11

FIRST INTERIM ORDER APPROVING

USE OF CASH COLLATERAL AND

SETTING FINAL HEARING

This matter comes before the Court, upon the applicable Debtor's motion for an order

approving Debtor's use of cash collateral and setting final hearing, and due notice having been

provided under the circumstances, and sufficient cause appearing therefore, and

IT APPEARING that Debtor is unable to obtain the use of cash collateral or unsecured

credit from any source other that its cash collateral, and under the circumstances, no other source

of immediate financing exists for the Debtor;

IT APPEARING that Debtor cannot care for its nursing home residents (the

“Residents”) post-petition without the use of its cash collateral;

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2

IT APPEARING that Debtor the relief requested in the motion is necessary, essential,

and appropriate for the continued operation of Debtor's business, the health, safety and welfare of

its Residents, and the management and preservation of Debtor's assets and properties is in the

best interest of the Residents, Debtor, its Creditors and its estate;

IT IS ORDERED that the motion is GRANTED in part and CONTINUED in part;

IT IS ORDERED that Debtor is authorized to use its cash collateral on an interim basis

until January __, 2016 at 5:00 p.m.;

IT IS ORDERED that notwithstanding Bankruptcy Code § 552, liens in cash collateral

that existed at the commencement of the case shall transfer, attach, and become replacement

liens in post-petition cash collateral, in the same amount, and with the same extent, validity and

priority, that existed at the time of the filing of the bankruptcy petition;

IT IS ORDERED that Debtor shall serve copies of a notice of final hearing, this interim

order and the proposed Final Order upon (i) the United States Trustee, (ii) counsel to TC10

Grantor Trust and TS Cambridge Grantor Trust, (iii) the Debtor's twenty largest creditors,

(iv) counsel for any committee of unsecured creditors appointed pursuant to Bankruptcy Code §

1102, (v) any other party which has filed a request for special notice with this Court and served

such request on Debtor's counsel, and (vi) such taxing authorities as may hold a claim against the

Debtor. The notice of final hearing shall state objections to approval of the proposed Final Order

on a final basis must be filed with the Court, at the address shown below, no later than January

__, 2016:

Clerk's Office

United States Bankruptcy Court

200 S. Washington Street

Alexandria, VA 22314; and

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IT IS ORDERED that further hearing on the Motion for interim use of cash collateral

shall be scheduled to be held on January __ 2016 at __:00 a.m., before the Honorable Brian F.

Kenney, United States Bankruptcy Judge, at 200 S. Washington Street, 3rd Floor Courtroom 3,

Alexandria, VA 22314.

DATE:

UNITED STATES BANKRUPTCY JUDGE

ENTERED ON DOCKET:

I ask for this:

/s/ Roy M. Terry, Jr.

Roy M. Terry, Jr., VSB No. 17764

William A. Gray, VSB No. 46911

John C. Smith, VSB No. 44556

SANDS ANDERSON PC

P.O. Box 1998

Richmond, VA 23218-1998

Telephone: 804.648.1636

Proposed Counsel for the Debtors

LOCAL RULE 9022-1(C) CERTIFICATION

I hereby certify that the foregoing proposed order has been endorsed by all necessary

parties.

/s/ Roy M. Terry, Jr.

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4

Copies to:

Charles V. Rice

400A Kendrick Lane

Front Royal, VA 22630

Proposed Debtor Designee

Roy M. Terry, Jr., Esquire

SANDS ANDERSON PC

P.O. Box 1998

Richmond, VA 23218-1998

Proposed Counsel for Debtors

TC 10 Grantor Trust

TS Cambridge Grantor Trust

c/o Valstone Asset Management

260 E. Brown Street, # 250

Birmingham, MI 48009

Secured Parties

Bruce M. Blanchard, Esquire

Donald King, Esquire

Alexander M. Laughlin, Esquire

Odin, Feldman & Pittleman, P.C.

1775 Wiehle Avenue, Suite 400

Reston, VA 20190

Counsel for Secured Parties

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