IN THE UNITED STATES BANKRUPTCY COURT

FOR THE NORTHERN DISTRICT OF TEXAS 

DALLAS DIVISION

In re: § 

§ CHAPTER 11

TARRANT COUNTY SENIOR LIVING § 

CENTER, INC.1 § CASE NO. 24-33082

§

Debtor. 

DISCLOSURE STATEMENT FOR DEBTOR’S PREPACKAGED PLAN OF 

REORGANIZATION PURSUANT TO CHAPTER 11 OF THE BANKRUPTCY CODE

NO CHAPTER 11 CASE HAS BEEN COMMENCED AS OF THE DATE OF 

DISTRIBUTION OF THIS DISCLOSURE STATEMENT. THIS DISCLOSURE 

STATEMENT IS DISTRIBUTED TO YOU AS PART OF A PREPETITION 

SOLICITATION OF YOUR VOTE ON A PREPACKAGED PLAN OF 

REORGANIZATION PURSUANT TO CHAPTER 11 OF THE BANKRUPTCY CODE.

THE DEADLINE TO VOTE ON THE PLAN IS SEPTEMBER 27, 2024, AT 5:00 P.M. 

(PREVAILING CENTRAL TIME) UNLESS EXTENDED BY THE DEBTOR. 

THE RECORD DATE FOR DETERMINING WHICH HOLDERS OF CLAIMS MAY 

VOTE ON THE PLAN IS AUGUST 26, 2024.

Dated: August 30, 2024

1

 The last four digits of the Debtor’s federal tax identification number are 8602.

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Tarrant County Senior Living Center, Inc. d/b/a Stayton at Museum Way (the “Debtor” 

or “Stayton”) is providing you with the information in this Disclosure Statement for Debtor’s 

Prepackaged Plan of Reorganization Pursuant to Chapter 11 of the Bankruptcy Code (as may be 

amended, modified, altered, revised, or supplemented from time to time, the “Disclosure 

Statement”) because you are a creditor entitled to vote on the Debtor’s Prepackaged Plan of

Reorganization Pursuant to Chapter 11 of the Bankruptcy Code (as may be amended, modified, 

altered, revised, or supplemented from time to time, the “Plan”). Capitalized terms used but 

not otherwise defined herein shall have the meanings ascribed to them in the Plan. Nothing in 

this Disclosure Statement may be relied upon or used by any Person for any other purpose. 

The Debtor is soliciting your vote to approve the Plan before the Debtor commences a voluntary 

reorganization under chapter 11 of the Bankruptcy Code.

The consummation and effectiveness of the Plan are subject to certain material 

conditions precedent described herein and set forth in Section 9 of the Plan. There is no 

assurance that the Bankruptcy Court will confirm the Plan or, if the Bankruptcy Court does

confirm the Plan, that the conditions necessary for the Plan to become effective will be satisfied 

or otherwise waived.

If sufficient votes to obtain confirmation of the Plan are received and certain other 

conditions are met, the Debtor intends to commence a case under chapter 11 of the Bankruptcy 

Code (the “Chapter 11 Case”) in the United States Bankruptcy Court for the Northern District 

of Texas (the “Bankruptcy Court”) to implement the Plan. Because the Chapter 11 Case has 

not yet commenced, this Disclosure Statement has not been approved by the Bankruptcy Court 

as containing “adequate information” within the meaning of section 1125 of the Bankruptcy 

Code. If the Debtor commences the Chapter 11 Case, then it will promptly seek an order of 

the Bankruptcy Court: (i) approving this Disclosure Statement as containing “adequate 

information”; (ii) approving the solicitation of votes as complying with sections 1125 and 1126 

of the Bankruptcy Code; and (iii) confirming the Plan.

RECOMMENDATION BY THE DEBTOR

The board of directors of the Debtor has approved the transactions contemplated by 

the Plan and described in this Disclosure Statement. The Debtor believes the Plan is in the 

best interests of all stakeholders and recommends that all creditors whose votes are being 

solicited submit ballots to accept the Plan.

Subject to the terms and provisions of that certain Plan Support Agreement; dated as 

of February 7, 2024 (and together with all exhibits and schedules thereto, the “Plan Support 

Agreement”), the following parties have agreed to vote in favor of or otherwise support the 

Plan:

• holders of at least 67% of the aggregate principal amount of the Debtor’s 

outstanding bonds 

• Buckner Retirement Services, Inc., the Debtor’s sole corporate member and 

the plan sponsor

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The Debtor strongly recommends that all creditors vote to accept the Plan by 

returning their Ballots so as to be actually received by the Voting Agent no later than 

September 27, 2024 at 5:00 p.m. (prevailing Central time) pursuant to the instructions 

provided herein and on the Ballots. 

FOR YOUR VOTE TO BE COUNTED, YOUR BALLOT (OR THE MASTER 

BALLOT CONTAINING YOUR VOTE) MUST BE ACTUALLY RECEIVED BY THE 

VOTING AGENT BEFORE THE VOTING DEADLINE IN ACCORDANCE WITH THE 

INSTRUCTIONS PROVIDED HEREIN. 

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DISCLAIMER

IF YOU ARE ENTITLED TO VOTE TO APPROVE THE PLAN, YOU ARE 

RECEIVING A BALLOT WITH YOUR NOTICE OF THIS DISCLOSURE STATEMENT. 

THE DEBTOR URGES YOU TO VOTE TO ACCEPT THE PLAN. 

EACH HOLDER OF A CLAIM AGAINST THE DEBTOR ENTITLED TO VOTE TO 

ACCEPT OR REJECT THE PLAN SHOULD READ THIS DISCLOSURE STATEMENT 

AND THE PLAN IN THEIR ENTIRETY BEFORE VOTING. NO SOLICITATION OF 

VOTES TO ACCEPT OR REJECT THE PLAN MAY BE MADE EXCEPT PURSUANT TO 

THIS DISCLOSURE STATEMENT AND BANKRUPTCY CODE SECTION 1125. NO 

HOLDER OF A CLAIM SHOULD RELY ON ANY INFORMATION RELATING TO THE 

DEBTOR, THEIR PROPERTY, OR THE PLAN OTHER THAN THAT CONTAINED IN 

THIS DISCLOSURE STATEMENT AND THE ATTACHED EXHIBITS. 

THIS DISCLOSURE STATEMENT CONTAINS A SUMMARY OF CERTAIN 

PROVISIONS OF THE PLAN. ALTHOUGH THE DEBTOR BELIEVES AND HAS MADE 

EVERY EFFORT TO ENSURE THAT THIS SUMMARY PROVIDES ADEQUATE 

INFORMATION WITH RESPECT TO THE PLAN, IT DOES NOT PURPORT TO BE 

COMPLETE AND IS QUALIFIED TO THE EXTENT IT DOES NOT SET FORTH THE 

ENTIRE TEXT OF THE PLAN. IF THERE IS ANY INCONSISTENCY BETWEEN THE

PLAN AND THE SUMMARY OF THE PLAN CONTAINED IN THIS DISCLOSURE 

STATEMENT, THE PLAN SHALL CONTROL. ACCORDINGLY, EACH HOLDER OF A 

CLAIM SHOULD REVIEW THE PLAN IN ITS ENTIRETY. 

THIS DISCLOSURE STATEMENT HAS BEEN PREPARED IN ACCORDANCE 

WITH BANKRUPTCY CODE SECTION 1125 AND BANKRUPTCY RULE 3016 (BUT HAS 

NOT BEEN APPROVED BY THE BANKRUPTCY COURT AS COMPLYING WITH 

SECTION 1125 OF THE BANKRUPTCY CODE AND BANKRUPTCY RULE 3016) AND 

NOT IN ACCORDANCE WITH FEDERAL OR STATE SECURITIES LAW OR OTHER 

APPLICABLE NONBANKRUPTCY LAW. PERSONS OR ENTITIES TRADING IN OR 

OTHERWISE PURCHASING, SELLING, OR TRANSFERRING CLAIMS AGAINST THE 

DEBTOR SHOULD EVALUATE THIS DISCLOSURE STATEMENT AND THE PLAN IN 

LIGHT OF THE PURPOSE FOR WHICH IT WAS PREPARED. THIS DISCLOSURE 

STATEMENT SHALL NOT BE CONSTRUED TO BE ADVICE ON THE TAX, 

SECURITIES, OR OTHER LEGAL EFFECTS OF THE REORGANIZATION OF THE 

DEBTOR AS TO HOLDERS OF CLAIMS AGAINST THE DEBTOR. 

IRS CIRCULAR 230 NOTICE: TO ENSURE COMPLIANCE WITH IRS CIRCULAR 

230, HOLDERS OF CLAIMS ARE HEREBY NOTIFIED THAT: (I) ANY DISCUSSION OF 

U.S. FEDERAL TAX ISSUES CONTAINED OR REFERRED TO IN THIS DISCLOSURE 

STATEMENT IS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, 

BY HOLDERS OF CLAIMS FOR THE PURPOSE OF AVOIDING PENALTIES THAT MAY 

BE IMPOSED ON THEM UNDER THE INTERNAL REVENUE CODE; (II) SUCH

DISCUSSION IS WRITTEN IN CONNECTION WITH THE PROMOTION OR 

MARKETING BY THE DEBTOR OF THE TRANSACTIONS OR MATTERS ADDRESSED

HEREIN; AND (III) HOLDERS OF CLAIMS SHOULD SEEK ADVICE BASED ON THEIR 

PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR.

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THIS DISCLOSURE STATEMENT WAS NOT FILED WITH THE SECURITIES 

AND EXCHANGE COMMISSION OR ANY STATE AUTHORITY AND NEITHER THE 

SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE AUTHORITY HAS 

PASSED UPON THE ACCURACY OR ADEQUACY OF THIS DISCLOSURE STATEMENT 

OR UPON THE MERITS OF THE PLAN. NEITHER THIS DISCLOSURE STATEMENT 

NOR THE SOLICITATION OF VOTES TO ACCEPT OR REJECT THE PLAN 

CONSTITUTES AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY

SECURITIES IN ANY STATE OR JURISDICTION IN WHICH SUCH OFFER OR 

SOLICITATION IS NOT AUTHORIZED.

CERTAIN STATEMENTS CONTAINED IN THE DISCLOSURE STATEMENT,

INCLUDING STATEMENTS INCORPORATED BY REFERENCE, PROJECTED

FINANCIAL INFORMATION (SUCH AS THAT REFERRED TO UNDER THE CAPTION 

“FINANCIAL PROJECTIONS” ELSEWHERE IN THE DISCLOSURE STATEMENT) AND 

OTHER FORWARDLOOKING STATEMENTS, ARE BASED ON ESTIMATES AND 

ASSUMPTIONS. THERE CAN BE NO ASSURANCE THAT SUCH STATEMENTS WILL 

BE REFLECTIVE OF ACTUAL OUTCOMES. FORWARD-LOOKING STATEMENTS

SHOULD BE EVALUATED IN THE CONTEXT OF THE ESTIMATES, ASSUMPTIONS,

UNCERTAINTIES, AND RISKS DESCRIBED HEREIN.

ALL OF THE PROJECTED RECOVERIES TO CREDITORS ARE BASED UPON 

THE ANALYSIS PERFORMED BY THE DEBTOR AND ITS PROFESSIONALS. 

ALTHOUGH THE DEBTOR HAS MADE EVERY EFFORT TO VERIFY THE ACCURACY 

OF THE INFORMATION PRESENTED HEREIN AND, IN THE EXHIBITS, ATTACHED 

HERETO, THE DEBTOR CANNOT MAKE ANY REPRESENTATIONS OR WARRANTIES 

REGARDING THE ACCURACY OF THE INFORMATION.

THE DEBTOR CANNOT ASSURE YOU THAT THE DISCLOSURE STATEMENT, 

INCLUDING ANY EXHIBITS THERETO, THAT IS ULTIMATELY APPROVED BY THE 

BANKRUPTCY COURT IN THE CHAPTER 11 CASE (I) WILL CONTAIN ANY OF THE 

TERMS DESCRIBED IN THIS DISCLOSURE STATEMENT; OR (II) WILL NOT 

CONTAIN DIFFERENT, ADDITIONAL, OR MATERIAL TERMS THAT DO NOT 

APPEAR IN THIS DISCLOSURE STATEMENT. THE DEBTOR URGES EACH HOLDER 

OF A CLAIM TO (I) READ AND CAREFULLY CONSIDER THIS ENTIRE DISCLOSURE 

STATEMENT (INCLUDING THE PLAN AND THE MATTERS DESCRIBED AS “RISK 

FACTORS” BELOW); AND (II) TO CONSULT WITH ITS OWN ADVISORS WITH 

RESPECT TO REVIEWING THIS DISCLOSURE STATEMENT, THE PLAN, AND EACH 

OF THE PROPOSED TRANSACTIONS CONTEMPLATED THEREBY PRIOR TO

DECIDING WHETHER TO ACCEPT OR REJECT THE PLAN. YOU SHOULD NOT 

RELY ON THIS DISCLOSURE STATEMENT FOR ANY PURPOSE OTHER THAN TO 

DETERMINE WHETHER TO ACCEPT OR REJECT THE PLAN.

THE DEBTOR HAS NOT AUTHORIZED ANY PERSON TO GIVE ANY 

INFORMATION OR ADVICE, OR TO MAKE ANY REPRESENTATION IN 

CONNECTION WITH THE PLAN OR THIS DISCLOSURE STATEMENT. THIS 

DISCLOSURE STATEMENT DOES NOT CONSTITUTE, AND MAY NOT BE 

CONSTRUED AS, AN ADMISSION OF FACT, LIABILITY, STIPULATION, OR WAIVER. 

THE DEBTOR MAY SEEK TO INVESTIGATE, FILE, AND PROSECUTE ANY CLAIMS 

AND CAUSES OF ACTION AND MAY OBJECT TO CLAIMS AFTER THE 

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CONFIRMATION OR EFFECTIVE DATE OF THE PLAN IRRESPECTIVE OF WHETHER 

THIS DISCLOSURE STATEMENT IDENTIFIED ANY SUCH CLAIMS OR OBJECTIONS 

TO SUCH CLAIMS. HOLDERS OF CLAIMS SHOULD NOT CONSTRUE THE 

CONTENTS OF THIS DISCLOSURE STATEMENT AS PROVIDING ANY LEGAL, 

BUSINESS, FINANCIAL, SECURITIES, OR TAX ADVICE AND SHOULD CONSULT 

THEIR OWN ADVISORS BEFORE VOTING ON THE PLAN.

THE DEBTOR RECOMMENDS THAT CREDITORS SUPPORT AND VOTE TO 

ACCEPT THE PLAN. IT IS THE OPINION OF THE DEBTOR THAT THE TREATMENT 

OF CREDITORS UNDER THE PLAN CONTEMPLATES A GREATER RECOVERY THAN 

THAT WHICH IS LIKELY TO BE ACHIEVED UNDER OTHER ALTERNATIVES FOR 

THE REORGANIZATION OR LIQUIDATION OF THE DEBTOR. ACCORDINGLY, THE 

DEBTOR BELIEVES THAT CONFIRMATION OF THE PLAN IS IN THE BEST 

INTERESTS OF CREDITORS.

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i 

TABLE OF CONTENTS

I. EXECUTIVE SUMMARY. ..................................................................................................... 1

A. Introduction. ................................................................................................................. 1

A. Overview of Stayton’s Recent Financial Challenges and Strategic Transaction. .......... 2

B. Proposed Refinancing Transaction. ............................................................................. 4

C. Purpose of the Disclosure Statement. ........................................................................... 7

D. The Solicitation Package. ............................................................................................. 8

E. The Plan. ....................................................................................................................... 9

II. BACKGROUND INFORMATION. ...................................................................................... 13

A. Overview of the Debtor’s Business............................................................................. 13

B. Organizational Structure of the Debtor. ...................................................................... 14

C. The Debtor’s Prepetition Capital Structure. ................................................................ 15

III. THE CHAPTER 11 PLAN. ................................................................................................... 16

A. Summary of Key Plan Provisions. ............................................................................. 16

B. Treatment of Claims Under the Plan. .......................................................................... 19

C. Means for Implementation of the Plan. ....................................................................... 20

D. Release, Exculpation, and Injunction Provisions. ...................................................... 21

IV. RISK FACTORS IN CONNECTION WITH THE PLAN. .................................................... 24

A. Bankruptcy Considerations. ....................................................................................... 24

B. Risks Related to the Debtor’s Business and Industry. ................................................. 25

C. Additional Factors. ..................................................................................................... 29

V. PLAN CONFIRMATION AND CONSUMMATION. .......................................................... 30

A. The Confirmation Hearing. ......................................................................................... 30

B. Objections to Confirmation. ....................................................................................... 30

C. Requirements for Confirmation of the Plan. .............................................................. 32

VI. ALTERNATIVES TO CONFIRMATION AND CONSUMMATION OF THE 

PLAN. ..................................................................................................................................... 35

A. Chapter 7 Liquidation. ................................................................................................ 36

B. Alternative Plan Pursuant to Chapter 11 of the Bankruptcy Code. ............................. 36

VII. CERTAIN FEDERAL TAX MATTERS RELATING TO THE SERIES 2024 

BONDS................................................................................................................................... 36

A. Opinion of Bond Counsel. .......................................................................................... 37

B. Other Tax Consequences. ........................................................................................... 38

VIII. RECOMMENDATION AND CONCLUSION. .................................................................... 39

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EXHIBITS 

Exhibit A Debtor’s Prepackaged Plan of Reorganization Pursuant to Chapter 11 of the 

Bankruptcy Code, dated August 30, 2024 

Exhibit B Plan Support Agreement

Exhibit C 2024 Bond Documents 

Exhibit D Financial Projections 

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1 

I. EXECUTIVE SUMMARY. 

A. Introduction.

Stayton submits this Disclosure Statement in connection with its solicitation of votes on 

the Plan.2

 Stayton is commencing this Solicitation to implement a refinancing of the Debtor’s 

outstanding Retirement Facility Revenue Bonds (The Stayton at Museum Way Project) Series 

2020 (the “Bonds”). Stayton anticipates filing a voluntary petition for relief under chapter 11 of 

title 11 of the United States Code (the “Bankruptcy Code”) in the Bankruptcy Court on or about 

October 1, 2024. 

The purpose of the Disclosure Statement is to provide information of a kind, and in 

sufficient detail, to enable creditors of the Debtor that are entitled to vote on the Plan to make an 

informed decision on whether to vote to accept or reject the Plan. The Disclosure Statement 

contains, among other things, summaries of the Plan, certain statutory provisions, and certain 

documents related to the Plan. A copy of the Plan is attached hereto as Exhibit A. 

As discussed in greater detail below, Stayton experienced financial difficulties that 

threatened the viability of the community. Following a default under its bond documents in June 

and December 2021, Stayton retained nationally recognized restructuring consultants to help 

advise the Stayton on improving its financial position and entered into negotiations with the 

Trustee (defined below) and the Supporting Holders (defined below) to explore options for 

Stayton’s long-term financial position. The negotiations culminated in a marketing and sale 

process, including an auction and the selection of the Plan Sponsor as the winning bidder. In 

connection therewith, the parties entered into the Plan Support Agreement by and among the 

Debtor, the Trustee, the Supporting Holders(defined below), and the Plan Sponsor (defined below)

on February 7, 2024. The Plan Support Agreement provides for a refinancing transaction 

(the “Refinancing Transaction”) to be implemented pursuant to the Plan as follows:

i. the substitution of the Plan Sponsor as the sole member of the Debtor 

through a Membership Substitution Agreement dated May 31, 2024 

(the “Membership Substitution Effective Date”); 

ii. a consensual, tax exempt refinancing of the Bonds, reducing the outstanding 

principal amount of the Bonds by approximately 28% from an initial 

principal amount of $112,261,464 to $81,000,000 (the “Bond 

Refinancing”); 

iii. an agreement by the Trustee to forbear from exercising remedies under the 

Original Bond Documents (defined below) while the Debtor pursues the 

Bond Refinancing; 

iv. an agreement by the Plan Sponsor to provide $15,000,000 in additional 

liquidity to support the Refinancing Transaction comprised of 

(a) $5,000,000 equity contribution used to fund (1) administrative expenses 

2 Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Plan. To the extent 

any inconsistencies exist between the Disclosure Statement and the Plan, the Plan will govern.

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2

and costs of issuance of the Series 2024 Bonds (defined below), 

(2) $1,825,000 in advisor fees incurred by the Stayton prior to the 

Membership Substitution Effective, and (3) working capital, and 

(ii) $10,000,000 to be issued pursuant to that certain Subordinated 

Promissory Note, dated May 31, 2024, between the Debtor and Buckner 

Foundation, Inc. (the “Subordinated Note”), of which $6,666,666.66 has 

been funded to the Debtor, with the remaining amount available to the 

Debtor to supplement liquidity in the event the Debtor does not satisfy the 

liquidity requirements under the Series 2024 Bond Documents (defined 

below); and 

v. a pre-packaged chapter 11 bankruptcy proceeding to implement the Bond 

Refinancing.

The restructuring contemplated by the Plan is a significant achievement for Stayton. 

Indeed, the Plan is supported by several of the Debtor’s key stakeholders, including, (i) BOKF, 

N.A., as Successor Trustee (the “Master Trustee” under the Original Master Indenture,3 the “Bond 

Trustee” under the Bond Indenture, 4 and, for purposes of this Disclosure Statement, 

the “Trustee”), at the direction of the Supporting Holders; (ii) each beneficial holder or investment 

manager or advisor for such beneficial holders of the Bonds that are signatories to the Plan Support 

Agreement or execute joinders thereto, which holders currently collectively hold at least 67% of 

the aggregate principal amount of the outstanding Bonds, (each referred to herein as a “Supporting 

Holder” and, collectively, as the “Supporting Holders”); and (iii) Buckner Retirement Services, 

Inc. (“Buckner” or the “Plan Sponsor,” and, together with the Debtor, the Trustee, and the 

Supporting Holders, the “Plan Support Parties”). The Plan is the culmination of extensive arm’s 

length negotiations that have occurred over the past year with the Plan Support Parties and 

Lifespace Communities, Inc. (“Lifespace”), the former sole member and manager of Stayton. 

Stayton believes that the Plan will provide Stayton with a long-term resolution of its financial 

distress so that it can, among other things, service its debt obligations, fulfill its charitable mission, 

and honor its commitments to the residents of Stayton. Stayton strongly believes that the Plan is 

in the best interests of its creditors, interest holders, and estate, and represents the best available 

alternative at this time. 

A. Overview of Stayton’s Recent Financial Challenges and Strategic Transaction.

As discussed in greater detail herein, Stayton relies on revenue generated by existing and 

new residents to, among other things, maintain its day-to-day operations, service its debt 

obligations, and honor its resident refund obligations. Stayton has faced challenges that have 

threatened Stayton’s ability to pay principal and interest on the Bonds and maintain its operational 

stability. 

3 The “Original Master Indenture” means that certain Amended and Restated Master Trust Indenture, Deed of Trust 

and Security Agreement, amended and restated as of January 1, 2020, between the Debtor and UMB, as predecessor 

to the Trustee, as amended by the Supplemental Master Indenture Number 3, dated as of January 1, 2020 4 The “Bond Indenture” means that certain Indenture of Trust, dated as of January 1, 2020, between the Tarrant 

County Cultural Education Facilities Finance Corporation and UMB, as predecessor to the Trustee.

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These challenges first led Stayton to restructure its balance sheet pursuant to prepackaged 

chapter 11 cases commenced in November of 2019 – In re Tarrant County Senior Living Center, 

Inc., Case No. 19-33756 (SGJ), in the United States Bankruptcy Court for the Northern District of 

Texas (the “2019 Restructuring”). As part of the refinancing transactions implemented in the 

2019 Restructuring, Lifespace provided additional liquidity to the Stayton through a Liquidity 

Support Agreement (“LSA”), and Stayton completed a consensual, tax-exempt refinancing of its 

then outstanding bonds by (i) issuing the Bonds in the full amount of its outstanding debt 

obligations plus all accrued interests, fees, and other costs, (ii) delaying principal payments on the 

Bonds until December 15, 2024, and (iii) providing for mandatory sinking fund payments 

commencing in 2025. In December 2019, the Bankruptcy Court entered an order confirming the 

Stayton’s 2019 plan of reorganization and the plan went effective in January 2020. 

Since the 2019 Restructuring, however, worsening market conditions continued to place 

pressure on the company’s profitability. When the Covid-19 pandemic impacted the United States 

of America starting in March 2020, it severely disrupted the senior living industry, especially 

because older adults are particularly vulnerable to the effects of COVID-19. As a result of the 

pandemic, Stayton incurred significant, additional operating expenses, to, among other things, 

retain qualified staff, pay for additional staffing costs, and pay for the acquisition of personal 

protection equipment for all staff members. To attempt to offset these additional costs, Stayton 

implemented four monthly service fee increases between 2020 and 2022. Stayton was able to 

implement these fee increases while maintaining consistent occupancy trends in the majority of its 

facility.5

 Still, despite its strong operating performance, due to pressures in the market caused by 

the Covid-19 pandemic, the resulting rise in the cost and availability of health care employees and 

suppliers, and the highly competitive market conditions in Fort Worth and surrounding areas as 

well as other factors, Stayton continued to face pressure on its margins and was not able to keep 

pace with the rise in its expenses. From 2021 to 2022, Stayton’s expenses grew 17%, while 

operating revenue grew 11% due to high inflation, labor pressure, and new vendors. 

As a result of these challenges, Stayton defaulted on its Bond Obligations (defined below),

the principal amount of which totals approximately $112 million, by, among other things, failing 

to (i) meet its debt service coverage ratio covenant on June 30, 2021 and December 31, 2021, and 

(ii) make debt service payments due on the Bonds on December 1, 2022. Because the debt service 

coverage ratio was less than 1.0 on December 31, 2021, an event of default occurred under the 

Original Master Indenture. To address its financial issues, in 2021, Stayton retained legal counsel 

and restructuring professionals to help it (i) evaluate its operations and marketing strategies and 

(ii) provide strategic advice on addressing the Stayton’s financial issues. Thereafter, Stayton and 

the Trustee, at the direction of the Supporting Holders, entered into a forbearance agreement on 

January 13, 2023, to enable the company to pursue a sale of the operating enterprise or its assets 

(the “Strategic Transaction”). Additionally, Stayton and Lifespace entered into an amendment of 

the LSA to allow the Trustee to withdraw $900,000 from the LSA account to pay the fees and 

expenses of its former counsel and existing advisors to pursue the Strategic Transaction.

Following the amendment to the LSA, in the first quarter of 2023, Stayton, with the aid of 

its financial advisor, Houlihan Lokey, commenced a marketing process for Stayton and its assets. 

5 Stayton’s skilled nursing facility experienced a decline in occupancy related to the Covid-19 pandemic but had 

recovered to its pre-pandemic levels of occupancy by 2022.

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The Strategic Transaction was structured as a competitive overbid process, pursuant to which 

Stayton entered into the Plan Support Agreement and Membership Substitution Agreement with the 

Plan Sponsor acting as stalking horse and subjected the Plan Sponsor’s offer to higher or otherwise 

superior bids. The Stayton set the auction for March 5, 2024, and Stayton received competing bids 

from three other senior living operators, including Lifespace. Ultimately, Stayton chose not to 

convene the auction. Late in the evening on March 5, 2024, the Plan Sponsor’s bid was selected by 

Stayton, in consultation with the Trustee and the Supporting Holders, as the highest and best bid 

received, and the parties elected to proceed with the proposed Refinancing Transaction.

B. Proposed Refinancing Transaction. 

In order to addressitsfinancial condition, Stayton, Lifespace, the Plan Sponsor, the Trustee, 

and the Supporting Holders have agreed to the terms of the Refinancing Transaction, pursuant to 

which: (i) the Plan Sponsor has been substituted as the sole corporate member of Stayton; (ii) the 

Plan Support Parties executed the Plan Support Agreement; (iii) Stayton and the Trustee entered 

into a Forbearance Agreement (the “Forbearance Agreement”); and (iv) Stayton will solicit votes 

from Holders of Bond Claims 6 in favor of the Bond Refinancing described in the Plan and 

commence the Chapter 11 Case to effectuate the Bond Refinancing.

i. Plan Sponsor Substitutes as Sole Corporate Member of Stayton. 

As an initial step in the Refinancing Transaction, Lifespace entered into that certain 

Membership Substitution Agreement, dated as of February 6, 2024, between Stayton, Lifespace, 

and the Plan Sponsor (the “MSA”) to allow the Plan Sponsor to substitute as sole corporate member 

of Stayton (the “Membership Substitution”) in accordance with the terms and conditions of the 

MSA. On the Membership Substitution Effective Date, all conditions precedent to the 

Membership Substitution were satisfied and the Plan Sponsor On the Membership Substitution 

Effective Date, all conditions precedent to the Membership Substitution were satisfied, and the 

Plan Sponsor became the sole corporate member of Stayton on June 1, 2024 (the “Effective 

Time”). Following the close of the MSA, Stayton is continuing to operate as follows: 

a. Separate Corporate Identity. Stayton maintains its corporate 

identity separate and apart from the Plan Sponsor and its affiliated 

entities. Stayton retains separate ownership of its assets and 

remains separately responsible for its operations and liabilities.

b. Management. The Plan Sponsor is responsible for management of 

Stayton, including strategic, operational, financial, and legal 

oversight from the Plan Sponsor’s headquarters. 

c. Impact on Residents. The Plan Sponsor will honor the terms of 

all existing Residency Agreements (defined below), including, but 

not limited to, the entrance fee obligations outlined in the Residency 

6

 “Bond Claim” means any Claim arising from, or related to, the Original Bond Documents and the Bonds, including 

any and all outstanding principal, which is owed in the amount $112,261,464.00, plus any and all accrued interest, 

fees (including, without limitation, professional fees), expenses, costs and other charges payable with respect to the 

Bonds. 

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5 

Agreements. In addition, the Plan Sponsor has committed to 

continue the existing charity care policy at the Stayton for a period 

for three (3) years and, thereafter to continue such charity care 

policy consistent with the other retirement communities owned by 

Plan Sponsor and its affiliated entities. 

ii. Forbearance Agreement, Subordinated Note, and Plan Support 

Agreement. 

To effectuate the Bond Refinancing, Stayton, Buckner, the Trustee, and the Supporting 

Holders, as applicable, have negotiated and agreed to the terms of the: (i) Forbearance Agreement, 

(ii) Subordinated Note, and (iii) Plan Support Agreement. The salient terms of each of these 

agreements are discussed in greater detail below:

a. Forbearance Agreement. Pursuant to that certain Forbearance 

Agreement, dated as of May 31, 2024, between Stayton and the 

Trustee, the Trustee has agreed to forbear from exercising remedies 

under the Original Bond Documents until December 31, 2024, 

unless terminated earlier, to provide the time necessary for Stayton 

to implement the Bond Refinancing through the Chapter 11 Case.

Pursuant to the Forbearance Agreement, Stayton is required to 

acknowledge, among other things, the validity of the Original Bond

Documents, the outstanding amount owed under the Original Bond 

Documents, and the validity and priority of the Trustee’s liens. 

As a condition of the Forbearance Agreement, Stayton is required to 

meet, or cause to be met, certain milestones, including commencing 

the Chapter 11 Case by no later than October 1, 2024. 

Finally, to induce the Trustee to enter into the Forbearance 

Agreement, Stayton released and discharged the Trustee, the 

Supporting Holders, and related parties from any and all claims, 

causes of actions, suits, and damages arising out of or related to the 

Original Bond Documents. 

b. Subordinated Note. Pursuant to the Subordinated Note between 

Stayton and Buckner Foundation, Inc. (the “Buckner 

Foundation”), Buckner Foundation (i) transferred $3,333,333.33 to 

the Stayton on the Membership Substitution Effective Date, 

(ii) transferred an additional $3,333,333.33 on July 1, 2024, and 

(iii) has committed to provide the remaining $3,333,333.34 to the 

Stayton as needed to increase the Days Cash On Hand to meet the 

Liquidity Requirement (each as defined in the Amended Master 

Indenture) set forth in that certain Amended and Restated Master 

Trust Indenture, Deed of Trust and Security Agreement

(the “Amended Master Indenture”) so long as the total outstanding 

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amount under the Subordinated Note does not exceed 

$10,000,000.00.

The Subordinated Note provides $10,000,000.00 in delayed draw 

subordinated debt to fund future capital expenses at Stayton and 

provide additional liquidity support for Stayton. 

Stayton is required to repay to Buckner Foundation any amounts 

drawn on the Subordinated Note, with interest thereon, in 

accordance with the Subordinated Note and the Amended Master 

Indenture. Stayton’s repayment obligation under the Subordinated 

Note will constitute Subordinated Indebtedness (as defined in the 

Amended Master Indenture) as set forth in the Subordinated Note 

and the Amended Master Indenture. 

c. Plan Support Agreement. Pursuant to the terms of the Plan 

Support Agreement, a copy of which is attached hereto as Exhibit 

B, Stayton has agreed to commence the Chapter 11 Case in the

Bankruptcy Court to implement the Bond Refinancing. The Plan 

Support Agreement contemplates that Stayton will restructure and 

exchange the Bonds for new bonds to be issued by the Issuer and 

designated “Tarrant County Cultural Education Facilities Finance 

Corporation Retirement Facility Revenue Bonds (The Stayton at 

Museum Way Project), Series 2024” (the “Series 2024 Bonds”). 

The Series 2024 Bonds will be issued under an Indenture of Trust 

(the “Series 2024 Bond Indenture”) between the Issuer and the 

Trustee, as bond trustee, and the proceeds thereof will be loaned to 

Stayton pursuant to the terms of a Loan Agreement between the 

Issuer and Stayton (the “Series 2024 Loan Agreement”). The 

Series 2024 Bonds will be limited obligations of the Issuer and will 

be secured in part by the Series 2024 Note (the “Series 2024 Note”) 

issued by Stayton pursuant to the Amended Master Indenture, which 

will amend and restate the Amended and Restated Master Trust 

Indenture, Deed of Trust and Security Agreement, amended and 

restated as of January 1, 2020, between the Debtor and UMB Bank, 

National Association, as predecessor to the Trustee, (the “Original 

Master Indenture”) as well as substantially all assets of Stayton as 

further described herein. 7 The forms of Series 2024 Bond 

Indenture (including the Series 2024 Bonds), Series 2024 Loan 

Agreement, and Amended Master Indenture (including the Series 

7 All references herein to the “Master Indenture” means the Original Master Indenture prior to the Effective Date and 

means the Amended Master Indenture on and after the Effective Date.

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2024 Note) (collectively, the “2024 Bond Documents”) are attached 

hereto as Exhibit C.

Pursuant to the Plan Support Agreement, the Trustee has agreed to 

permit Stayton to use its cash collateral for funding for the Chapter 

11 Case in accordance with the terms and conditions set forth in a 

Cash Collateral Order, which shall be in form and substance 

acceptable to the Stayton, the Plan Sponsor, and the Trustee. 

The Supporting Holders have agreed that, subject to the terms and 

conditions of the Plan Support Agreement and so long as no 

Agreement Termination Event (as defined in the Plan Support 

Agreement) has occurred, they will, among other things, support 

confirmation of the Plan and vote to accept the Plan. 

iii. The Chapter 11 Case. 

As the final step in the Refinancing Transaction, and subject to receiving the requisite 

number of votes in favor of the Plan, Stayton will commence the Chapter 11 Case in the 

Bankruptcy Court to pursue the Bond Refinancing. Among other things, the Plan provides as 

follows:

a. Stayton shall cause the Issuer to issue the Series 2024 Bonds in an 

aggregate principal amount equal to $81,000,000, on the terms and 

conditions set forth in the 2024 Bond Documents.

b. That all Classes of Claims, except for holders of Bond Claims, will 

be Unimpaired by the Plan. Holders of such Claims will have their 

Claims paid in full in the ordinary course of the Stayton’s business 

and will be deemed to accept the Plan.

c. All executory contracts and unexpired leases, including all 

Residency Agreements, will be assumed pursuant to section 365 of 

the Bankruptcy Code. 

d. Stayton will release certain parties, including, without limitation, the 

Trustee, the Supporting Holders, and the Plan Sponsor. 

Subject to receiving the necessary affirmative votes, Stayton will commence the Chapter 

11 Case on or around October 1, 2024 (the “Petition Date”). In order to protect the tax-exempt

status of the Bond Refinancing, it is contemplated that the Plan will become effective no earlier 

than six (6) months and one (1) day after the Membership Substitution Effective Date, or no earlier

than December 2, 2024.

C. Purpose of the Disclosure Statement. 

Stayton submits this Disclosure Statement pursuant to section 1125 of the Bankruptcy 

Code in connection with: (i) the solicitation of votes on the Plan, and (ii) following the Petition 

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Date, a hearing to consider confirmation of the Plan. Section 1125 of the Bankruptcy Code 

requires a debtor to prepare a disclosure statement that contains information of a kind, and in 

sufficient detail, to permit a hypothetical reasonable investor to make an informed judgment 

regarding acceptance of a proposed chapter 11 plan of reorganization before soliciting acceptances 

of such proposed plan. Stayton provides this Disclosure Statement pursuant to section 1125 of 

the Bankruptcy Code to the beneficial holders of the Stayton’s Bonds because Stayton is asking 

such Holders of Bond Claims to vote to accept the Plan prior to the filing of Stayton’s Chapter 11

Case in a manner which is intended to be binding in the Chapter 11 Case. This Disclosure 

Statement sets forth certain information regarding (i) Stayton’s prepetition operating and financial 

history; (ii) Stayton’s need to file for relief under chapter 11 of the Bankruptcy Code; (iii) the terms 

of the Plan; (iv) the manner in which distributions will be made under the Plan; (v) certain effects 

of confirmation of the Plan; (vi) certain risk factors associated with the Plan; and (vii) the 

confirmation process and the voting procedures that Holders of Claims entitled to vote under the 

Plan must follow for their votes to be counted. Stayton believes that the confirmation and 

implementation of the Plan is in the best interests of the Debtor’s Estate, its Creditors, and all other 

interested parties.

This Disclosure Statement is subject to the Bankruptcy Court’s approval, as containing 

information of a kind, and in sufficient detail, adequate to enable a hypothetical, reasonable 

investor to make an informed judgment with respect to the Plan. THE BANKRUPTCY 

COURT’S APPROVAL OF THIS DISCLOSURE STATEMENT DOES NOT 

CONSTITUTE A DETERMINATION WITH RESPECT TO THE MERITS OF THE 

PLAN. ALL CREDITORS ARE ENCOURAGED TO READ THIS DISCLOSURE 

STATEMENT AND ITS EXHIBITS CAREFULLY AND IN THEIR ENTIRETY BEFORE

DECIDING TO VOTE TO ACCEPT OR REJECT THE PLAN.

The summary of the Plan provided herein is qualified in its entirety by reference to the 

Plan. To the extent that the information provided in this Disclosure Statement and the Plan 

(including any Plan Supplements) conflict, the terms of the Plan (including any Plan Supplements) 

will control. Terms not otherwise specifically defined herein will have the meanings attributed 

to them in the Plan. Each definition in this Disclosure Statement and in the Plan includes both 

the singular and plural. Headings are for convenience or reference and shall not affect the meaning 

or interpretation of this Disclosure Statement.

D. The Solicitation Package.

Only record holders of Claims in Class 3 as of the voting record date, August 26, 2024, are 

entitled to vote on the Plan. Holders of Claims in Class 3 will receive a solicitation package 

consisting of the following materials (collectively, the “Solicitation Materials”):

● a form ballot (the “Ballot”), which shall include the voting instructions;

● this Disclosure Statement with all exhibits, including the Plan, and any

other supplements or amendments to these documents; and

● a Solicitation Cover Letter.

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E. The Plan.

i. Purpose and Effect of the Plan.

Chapter 11 of the Bankruptcy Code allows a debtor to reorganize or to liquidate and wind 

up its affairs for the benefit of the debtor and its creditors. Upon the commencement of a chapter 

11 case, an estate is created comprised of all the legal and equitable interests of a debtor as of the 

date the petition is filed. A debtor will typically remain in control of its estate as a debtor-inpossession during the chapter 11 case.

Pursuant to section 362 of the Bankruptcy Code, the filing of a chapter 11 petition imposes 

an automatic stay of all attempts by creditors or third-parties to collect or enforce prepetition claims 

against a debtor or otherwise interfere with its property or business, unless relief from the 

automatic stay is obtained from the bankruptcy court.

The Bankruptcy Code is designed to encourage the parties-in-interest in a chapter 11 

proceeding to negotiate the terms of a chapter 11 plan so that it may be confirmed. A chapter 11 

plan is the vehicle for satisfying or otherwise addressing the claims against and the interests in the 

debtor. Confirmation of a chapter 11 plan makes it binding on the debtor and all of its creditors 

and the prior obligations owed by the debtor to such parties are compromised in exchange for the 

obligations specified in the plan.

ii. Analysis of Recoveries to Holders of Claims under the Plan and 

Recommendation of the Debtor.

After an extensive and competitive sale process and arm’s length negotiations with the Plan 

Sponsor, the Trustee, and the Supporting Holders, the Debtor concluded that it could maximize 

recoveries to its stakeholders through a sale of its assets to the Plan Sponsor and implementing the 

Refinancing Transaction embodied in the Plan. The Plan provides for a comprehensive 

restructuring of the Debtor’s Bond Obligations through the exchange of the Bonds for the Series 

2024 Bonds. The Plan further provides for the Debtor to continue to honor its obligations to its 

other creditors in the ordinary course of its business. The treatment provided to Holders of Bond 

Claims is the product of extensive negotiations between the Debtor, the Plan Sponsor, the Trustee, 

and the Supporting Holders. As set forth more fully below, the Debtor and the Plan Sponsor

believe that the Plan provides the best recoveries possible for the Debtor’s stakeholders and

recommend that, if you are entitled to vote, you vote to accept the Plan.

iii. Classification and Treatment of Claims Under the Plan.

Bond Claims are impaired under the Plan. The Debtor is seeking votes to accept the Plan 

from Holders of Bond Claims in Class 3. For a full description of the Classes of Claims and their 

treatment under the Plan, see Sections 3 and 4 of the Plan - Classification and Treatment of Claims.

Each Class of Claims, except Administrative Expense Claims and Priority Tax Claims, are 

placed in the following Classes and will receive the following treatment under the Plan:

Summary of Classification and Treatment of Claims Under the Plan

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Class and 

Designation

Treatment Impairment and 

Entitled to Vote Approx.

Percentage Recovery

Class 1: 

Priority NonTax Claims

Paid in full in cash. Unimpaired

(Not entitled to 

vote. Deemed to

Accept)

100%

Class 2: Other

Secured Claims

Reinstated. Unimpaired

(Not entitled to 

vote. Deemed to

Accept)

100%

Class 3: Bond

Claims

Each Holder of an Allowed 

Bond Claim will receive its 

Pro Rata share of the Series 

2024 Bonds. 

Impaired

(Entitled to vote)

Allowed in the amount 

of $112,261,464.00 plus 

interest and fees as of the 

Effective Date

63.1%8

Class 4: 

General

Unsecured

Claims

Unaltered by the Plan. The 

Reorganized Debtor shall 

continue to pay or dispute 

each General Unsecured 

Claim in the ordinary 

course of business as if the 

Chapter 11 Case had never 

been commenced.

Unimpaired

(Not entitled to 

vote. Deemed to

Accept)

100%

Class 5: 

Subordinated 

Note Claims

Reinstated. Unimpaired

(Not entitled to 

vote. Deemed to

Accept)

Allowed.

100%

i. Summary of Voting Requirements for Plan Confirmation.

a. In General.

Creditors should refer only to this Disclosure Statement and the Plan to determine whether 

to vote to accept or reject the Plan. Under the Bankruptcy Code, only Holders of Claims that are 

“impaired” are entitled to vote to accept or reject the Plan. Under section 1124 of the Bankruptcy

Code, a class of claims or interests is deemed to be “impaired” under a plan unless (i) the plan 

leaves unaltered the legal, equitable, and contractual rights to which such claim or interest entitles 

the holder thereof; or (ii) notwithstanding any legal right to an accelerated payment of such claim

or interest, the plan, among other things, cures all existing defaults (other than defaults resulting 

from the occurrence of events of bankruptcy) and reinstates the maturity of such claim or interest 

as it existed before the default. 11 U.S.C. § 1124. An impaired class of creditors votes to accept 

a plan if the holders of at least two-thirds (2/3) in dollar amount and more than one-half (1/2) in 

number of those creditors that actually cast ballots vote to accept such plan. 11 U.S.C. § 1126(c). 

8 The approximate percentage of recovery for the bonds incorporates principal and interest through an assumed 

Effective Date of December 2, 2024. 

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A class of interest holders is deemed to accept a plan if the holders of at least two-thirds (2/3) in 

amount of those interest holders that actually cast ballots vote to accept such plan. 11 U.S.C. 

§ 1126(d). Those classes that are not impaired are not entitled to vote and are deemed to accept a 

plan. 11 U.S.C. § 1126(f). Those classes that are not entitled to a distribution and will not retain

property under a plan are deemed to reject a plan. 11 U.S.C. § 1126(g). 

Pursuant to the Bankruptcy Code, only creditors who actually vote on the Plan will be 

counted for purposes of determining whether the required number of acceptances have been 

obtained. Failure to deliver a properly completed ballot by the Voting Deadline (as defined 

below) will result in an abstention; consequently, the vote will neither be counted as an 

acceptance or rejection of the Plan.

ii. Impaired Classes Entitled to Vote.

The Claims in Class 3 are Impaired under the Plan and Holders of Bond Claims in this 

Class are entitled to vote to accept or reject the Plan.

iii. Unimpaired Classes Deemed to Accept the Plan.

If a Creditor holds a Claim included within a Class that is not Impaired under the Plan, 

under Bankruptcy Code section 1126(f), the Creditor is deemed to have accepted the Plan with 

respect to such Claim and its vote of such Claim will not be solicited. Classes 1, 2, 4, and 5 are 

Unimpaired under the Plan.

iv. Voting Deadline.

The Debtor has engaged Kroll Restructuring Administration LLC as its voting agent 

(the “Voting Agent”) to assist in the transmission of voting materials and tabulation of votes with 

respect to the Plan. Holders of Bond Claims will have the right to vote to accept or reject the 

Plan. To be counted, votes must be submitted in accordance with the voting instructions, which 

require all votes to be in writing and submitted prior to September 27, 2024 at 5:00 p.m. (prevailing 

Central Time) (the “Voting Deadline”). The record date for determining which holders may vote 

on the Plan is August 26, 2024 (the “Voting Record Date”). 

v. Voting Instructions.

Section 1126(c) of the Bankruptcy Code defines “acceptance” of a plan by a class of claims 

as acceptance by creditors in that class that hold at least two-thirds in dollar amount and more than

one-half in number of the allowed claims in that class, counting only those claims that actually 

vote to accept or to reject such plan. 11 U.S.C. § 1126(c). 

As stated above, to be counted as votes to accept or reject the Plan, all Ballots must be 

properly executed, completed, and timely delivered by the Voting Deadline

Most Holders of Claims related to the Bonds will submit votes by completing a Ballot and 

returning it to their specified bank, broker, nominee, or other intermediary (a “Nominee”). Each 

Nominee may provide specific instructions to beneficial Holders of Claims related to the Bonds

on how to submit a vote (whether in a beneficial Holder Ballot or otherwise according to 

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the Nominee’s instructions). Such Holders will be instructed to submit their vote to the Nominee 

to enable the Nominee to include such beneficial Holder vote(s) in, and complete and submit, a 

master Ballot to the Voting Agent so that it is actually received by the Voting Deadline. Beneficial 

Holders of Claims related to the Bonds should carefully follow the instructions that accompany

their Ballot to ensure that their vote is properly received by the Nominee with sufficient time for 

the Nominee to complete a master Ballot that can be delivered to the Voting Agent by the Voting 

Deadline. Instructions for voting are more fully described in the Ballots.

Unless otherwise directed by the Bankruptcy Court, all questions as to the validity, form, 

eligibility (including time of receipt), acceptance, revocation, or withdrawal of Ballots will be 

determined by the Debtor in its sole discretion, following consultation with the Trustee, and such 

determination will be final and binding unless otherwise ordered by the Bankruptcy Court. Once 

a party delivers a valid Ballot for the acceptance or rejection of the Plan, such party may not 

withdraw or revoke such acceptance or rejection without the Debtor’s written consent or an order 

of the Bankruptcy Court. The Debtor also reserves the right to reject any and all Ballots not in 

proper form, if the acceptance of which would, in the opinion of the Debtor with the advice of its 

counsel, be unlawful.

The Debtor further reserves the right to waive any defects or irregularities or conditions of

delivery as to any particular Ballot. The interpretation (including the Ballot and the respective 

instructions therein) by the Debtor, unless otherwise directed by the Bankruptcy Court, will be 

final and binding on all parties. Unless waived, any defects or irregularities in connection with 

deliveries of Ballots must be cured within such time as the Debtor (or the Bankruptcy Court) 

determines. Neither the Debtor nor any other person will be under any duty to provide notification 

of defects or irregularities with respect to deliveries of Ballots nor will any of them incur any 

liabilities for failure to provide such notification. Unless otherwise directed by the Bankruptcy 

Court, delivery of such Ballots will not be deemed to have been made until such irregularities are 

cured or waived. Ballots previously furnished (and as to which any irregularities have not 

theretofore been cured or waived) will be invalidated.

If you cast more than one Ballot voting the same Claim prior to the Voting Deadline, the 

last valid Ballot timely received shall be deemed to reflect the voter’s intent and shall supersede 

and revoke any earlier received Ballot. 

vi. AdditionalInformation.

If you have any questions about (i) the procedure for voting on your Claim, (ii) the package

of materials that you have received, or (iii) obtaining or replacing a Ballot, the Plan, this Disclosure 

Statement, or any exhibits to such documents, please contact the Voting Agent by (a) calling (833) 

917-0935 (US/Canada toll free) or +1 (646) 783-2230 (international toll); (b) writing to The 

Stayton at Museum Way Ballot Processing, c/o Kroll Restructuring Administration LLC, 850 

Third Avenue, Suite 412, Brooklyn, NY 11232; or (c) emailing StaytonInfo@ra.kroll.com with a 

reference to “Stayton Solicitation Inquiry” in the subject line. Questions regarding voting 

instructions provided to you by your Nominee should be directed to your Nominee.

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vii. The Confirmation Hearing.

Following commencement of the Chapter 11 Case, the Debtor will request that the 

Bankruptcy Court schedule a combined hearing to consider, among other things, (i) approval of 

the Disclosure Statement, approval of the Solicitation Materials, which shall include the 

procedures for soliciting, receiving, and tabulating votes on the Plan and for filing objections to 

the Plan, and (iii) confirmation of the Plan (the “Confirmation Hearing”). The Debtor will

provide notice of the Confirmation Hearing to all necessary parties in accordance with applicable 

law.

The Confirmation Hearing may be continued from time to time without further notice other 

than an adjournment announced in open court or a notice of adjournment filed with the Bankruptcy 

Court and served on any master service list ordered by the Bankruptcy Court and any entities 

which filed objections to the Plan, without further notice to parties in interest. The Bankruptcy 

Court, in its discretion and prior to the Confirmation Hearing, may put in place additional 

procedures governing the Confirmation Hearing. The Plan may be modified, if necessary, prior 

to, during, or as a result of the Confirmation Hearing, without further notice to parties in interest.

viii. Effect of Confirmation and Consummation of the Plan.

Following Confirmation, subject to Section 9 of the Plan, the Plan will be consummated 

on the Effective Date. Among other things, on the Effective Date, certain release, injunction, 

exculpation, and discharge provisions set forth in Section 10 of the Plan will become effective. 

As such, it is important to read the provisions contained in Section 10 of the Plan very carefully 

so that you understand how confirmation and consummation of the Plan will affect you and any 

Claim you may hold against the Debtor so that you cast your vote accordingly. 

Following the Effective Date, the Bonds will be cancelled, and in return, Holders of the 

Bonds will receive a Pro Rata share of the Series 2024 Bonds. Additionally, following the 

Effective Date, the 2024 Bond Documents shall constitute legal, valid, binding, and authorized 

obligations of the Reorganized Debtor.

II. BACKGROUND INFORMATION.

A. Overview of the Debtor’s Business.

Incorporated in 2006, Stayton is a not-for-profit corporation that owns and operates a bestin-class continuing care retirement community in Fort Worth, Texas dedicated to giving its 

residents a vibrant, active, and independent lifestyle. The Stayton offers its senior residents a 

continuum of care in a luxury campus-style setting, providing living accommodations and related 

health care and support services to a market of seniors aged sixty-two (62) and older. Stayton 

consists of approximately 188 independent living (“IL”) apartment-style residences in one-, two-, 

and three- bedroom configurations within three towers, each of which are eleven stories. Stayton 

also houses 42 residential-style assisted living (“AL”) suites, 20 memory support (“MS”) assisted 

living suites and a skilled nursing facility (“SNF”) with 46 skilled nursing beds, all located on a 

2.8 acre campus (the “Facility”) adjacent to Trinity Park. The Facility also contains an 

aquatic/fitness center, business center/library, beauty salon/barber shop, card lounge/game room, 

creative arts center, dining rooms and lounges, and other common spaces.

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As is common practice in the continuing care retirement community (“CCRC”) industry, 

the Debtor primarily receives its revenue from entrance fees, monthly service fees, and other fees

charged by Stayton (collectively, the “Fees”) pursuant to Residency Agreements. A resident 

interested in occupying an IL unit in the Facility must enter into a continuing care contract 

(a “Continuing Care Contract”) with Stayton. As part of a Continuing Care Contract, each 

resident in an IL unit receives priority access to AL and/or SNF units should additional care ever 

be required. In addition, IL residents receive basic assisted living or nursing care upon permanent 

transfer to AL or the SNF, should the need for such services arise. Unlike a pure rental retirement 

community, whereby a resident pays monthly fees for services, the Continuing Care Contract is 

a life care residency contract whereby a resident will pay an entrance fee and monthly fees for 

Stayton’s commitment to provide (i) priority access to AL and/or SNF units should additional care 

ever be required and (ii) basic assisted living or nursing care upon permanent transfer to AL or the 

SNF, should the need for such services arise (the “Life Care Benefit”). Residents receive these 

Life Care Benefits for the duration of the resident’s life, regardless of whether the resident’s needs 

change over time which may require additional services to be provided by Stayton. Significantly, 

Stayton’s commitment to provide Life Care Benefits continues even if the resident’s financial 

condition deteriorates and the resident is unable to continue to make its payments.

In addition to Continuing Care Contracts, Stayton also offers contracts for direct admission 

into an AL suite (the “Assisted Living Residency Agreement”) or SNF (the “SNF Residency 

Agreement” and collectively with Continuing Care Contracts and Assisted Living Residency 

Agreements, the “Residency Agreements”). 

B. Organizational Structure of the Debtor.

i. Corporate Governance.

Stayton is governed by a Board of Directors that is elected by Buckner. Buckner has been 

the sole corporate member of Stayton since the Effective Time. Buckner is a faith-based nonprofit 

corporation chartered under the laws of the State of Texas and a tax-exempt organization under 

section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the “IRC”). Buckner’s 

mission is to inspire happiness for its residents, creating communities that provide seniors with 

connection, independence, purpose, security, and exceptional service. Buckner owns and operates 

six (6) other nonprofit senior living communities across Texas, making it the largest nonprofit 

senior living provider in Texas.

Prior to the Effective Time, Stayton’s sole corporate member and sponsor was Lifespace.

Lifespace is a non-profit corporation chartered under the laws of the State of Iowa and a taxexempt organization under section 501(c)(3) of the IRC.

ii. Management by Buckner.

Pursuant to that certain Management Services Agreement (as may be amended, 

supplemented, or modified from time to time, the “Management Agreement”), effective as of 

June 1, 2024, Buckner agreed to serve as exclusive manager of the day-to-day operations of

Stayton. The services provided by Buckner include, but are not limited to, the following: 

(i) general management services to administer the policies, directives, and strategic direction of 

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Stayton’s operations; (ii) financial management services, including providing periodic financial 

reports and budgeting; (iii) legal services and compliance support; (iv) human resource services, 

including establishing employment policies, hiring, developing, and retaining employees, and 

setting wage, salary, and benefit terms; and (vii) marketing, public relations, and fundraising 

support, including providing sales and marketing services for the community. Pursuant to the 

Management Agreement, Stayton pays Buckner a management fee of five percent (5%) of its

monthly gross revenues, as defined in the Management Agreement, for the services provided. 

iii. Regulators.

The CCRC industry nationwide is regulated by various state and federal agencies. Each 

state has a different regulatory scheme governing CCRCs. As a Medicare-certified CCRC 

operating in the State of Texas, Stayton is regulated by, among others, the Centers for Medicare 

and Medicaid Services, the State of Texas Department of Health, and the Texas Department of 

Insurance.

C. The Debtor’s Prepetition Capital Structure.

As of June 30, 2024, on a book value basis, Stayton had approximately $125.8 million in 

assets consisting of approximately: (i) $7.4 million in cash and cash equivalents; (ii) $1.2 million 

in accounts receivable; (iii) $94.2 million in fixed assets, net of accumulated depreciation; (v) $17 

million of restricted cash; and (vi) $6 million of other assets, net of accumulated amortization and 

depreciation.

As of June 30, 2024, Stayton had approximately $ 214.3 million of liabilities, net of 

accumulated amortization of non-refundable entrance fees, deferred financing costs, and original 

issue premium, which consisted of approximately: (i) $1.5 million of trade accounts payable;

(ii) $21.5 million of current resident refund obligations; (iv) $75 million in entrance fee liabilities; 

(v) $112.3 million in principal amount of long-term municipal bond obligations; and (vi) 4.1 

million of other liabilities, including $3.3 million of Subordinated Note obligations. As of 

July 31, 2024, Stayton had $6.67 million of Subordinated Note obligations.

i. Long-Term Municipal Bond Obligations.

On January 1, 2020, Tarrant County Cultural Education Facilities Finance Corporation 

(the “Issuer”) and UMB Bank, National Association, as former trustee, entered into an Indenture 

of Trust (the “Bond Indenture”), pursuant to which the Issuer issued Series 2020 retirement 

facility revenue bonds in the initial principal amount of $112,261,464.

Contemporaneously with the issuance of the Bonds, the Issuer loaned the proceeds of the 

Bonds to Stayton, pursuant to a Loan Agreement between Stayton and the Issuer (the “Loan 

Agreement”), to provide for the refinancing of a portion of the cost of acquiring, constructing, and 

equipping the Facility. Additionally, on January 1, 2020, Stayton issued the Tarrant County 

Senior Living Center, Inc. Series 2020 Note (the “Series 2020 Note”) under the Original Master 

Indenture. The Series 2020 Note secures the obligations of Stayton to pay the principal of and 

interest on the Bonds. The Bond Indenture, Loan Agreement, Original Master Indenture, and 

Series 2020 Note are collectively referred to herein as the “Original Bond Documents.” As of 

the date hereof, the outstanding principal amount owed by Stayton under the Original Bond 

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Documents is approximately $112,261,464.00 (together with interest, fees, expenses, and other 

amounts due under the Original Bond Documents, the “Bond Obligations”). 

Under the terms of the Original Bond Documents, certain accounts were established by 

Stayton and are being held by the Trustee, including, among others, the Revenue Fund, the Interest 

Fund, the Bond Sinking Fund, the Optional Redemption Fund, the Debt Service Reserve Fund, the 

Working Capital Fund, the Operating Reserve Fund, and the Liquidity Support Fund (each as 

defined in the Original Bond Documents). As of June 30, 2024, the total amount of funds held

by the Trustee in said accounts was approximately $4.9 million (the “Trustee-Held Funds”). 

ii. Subordinated Note Obligations. 

On May 31, 2024, Buckner Foundation, a Texas not-for-profit corporation and affiliate of 

the Plan Sponsor, and Stayton entered into the Subordinated Note. Pursuant to the Subordinated 

Note, Buckner Foundation agreed to loan up to $10,000,000 in funds to Stayton in three tranches. 

As of the date hereof, the Buckner Foundation has transferred $6,666,666.66 to Stayton and has 

committed to provide the remaining $3,333,333.34 to Stayton as needed to increase the Days Cash 

On Hand to meet the Liquidity Requirement set forth in the Amended Master Indenture. Stayton 

is required to repay to Buckner Foundation any amounts drawn on the Subordinated Note, with 

interest thereon, in accordance with the Subordinated Note and the Amended Master Indenture. 

The Subordinated Note is subordinated to the Bond Obligations. The Plan contemplates that 

Stayton’s rights and obligations under the Subordinated Note will be reinstated. On and after the 

Effective Date, Stayton’s repayment obligation under the Subordinated Note will constitute 

Subordinated Indebtedness (as defined in the Amended Master Indenture) as set forth in the 

Subordinated Note and the Amended Master Indenture. 

III. THE CHAPTER 11 PLAN. 

This section of the Disclosure Statement provides a summary of the key terms, structure, 

classification, treatment, and implementation of the Plan, a copy of which is annexed hereto as 

Exhibit A. Although this section of the Disclosure Statement includes summaries of the 

provisions of the Plan and certain of the documents referenced therein, it is not a complete 

statement of the terms and provisions contained in the Plan and should not be relied upon as 

a comprehensive restatement of the Plan. This Summary is qualified in its entirety by reference 

to the Plan and the Plan Supplement. To the extent there are any inconsistencies between the 

Disclosure Statement and the Plan and the Plan Supplement, the terms of the Plan and the Plan 

Supplement, as applicable, shall govern. 

A. Summary of Key Plan Provisions. 

Section Pages Summary

1 1-11 Definitions and Interpretation. This section contains the 

definitions used throughout the Plan as well as the rules of 

construction for the Plan and conventions for computing time.

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2 11-12 Administrative and Priority Claims. This section details 

the treatment of certain Priority and Administrative Expense 

Claims, such as state and federal taxes, expenses incurred by 

the Debtor during the course of the Chapter 11 Case, fees 

owed to the Debtor’s bankruptcy professionals, and statutory 

fees owed to the United States Trustee. Pursuant to the 

Bankruptcy Code, these types of Claims are afforded higher 

payment priority and the Debtor must ensure that these 

Claims are paid in full before affording payment to any other 

Claims. Pursuant to the Plan, all Allowed Administrative 

Expense Claims and Priority Tax Claims will be paid in full. 

3 12-14 Classification of Claims. This section summarizes the 

different categories of Claims against the Debtor. It also 

contains provisions regarding voting and solicitation as well 

as a provision summarizing how the Debtor may seek to 

confirm the Plan notwithstanding the rejection of the Plan by 

a Class of creditors. 

4 14-15 Treatment of Claims. This section details the treatments of 

each Class of Claims against the Debtor. Pursuant to the 

Plan, each Class of Claims against the Debtor other than Class 

3 are Unimpaired by the Plan and will be treated as if the 

Chapter 11 Case had never been filed. Holders of Bond 

Claims in Class 3 will receive their pro rata share of the 

Series 2024 Bonds. A more detailed description of the Plan 

treatment for each Class is set forth immediately below.

5 16-20 Means for Implementation of the Plan. This section of the 

Plan sets forth the various provisions that are key to the 

implementation of the Plan such as provisions authorizing the 

2024 Bond Documents, granting legally binding and 

enforceable Liens and security interests in the Debtor’s assets 

in accordance with the 2024 Bond Documents, and providing 

for the continued corporate existence of the Debtor following 

the Effective Date of the Plan. The provisions regarding the 

authorization of the 2024 Bond Documents and summarizing 

the Series 2024 Bonds are set forth below. 

6 21-22 Distributions. This section of the Plan describes how 

Distributions under the Plan will be handled and empowers 

the Disbursing Agent to make such Distributions. 

7 23 Procedures for Resolving Claims. This section of the Plan 

clarifies that Holders of Claims need not file a proof of claim 

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and that any disputes with respect to such claims will be 

resolved by the Debtor in the ordinary course of its business. 

8 23-26 Assumption of Executory Contracts and Unexpired 

Leases. This section of the Plan describes how the Debtor’s 

executory contracts and unexpired leases will be treated under 

the Plan. The Debtor is assuming all such contracts and 

leases, including Residency Agreements, and will continue to 

operate under the agreements as if the Chapter 11 Case had

never occurred. 

9 26-27 Conditions Precedent to Confirmation and the Effective 

Date. This section lists all of the conditions precedent to 

confirmation of the Plan and the Effective Date of the Plan. 

As set forth in section 9.2, each of the conditions precedent to 

the Effective Date of the Plan may be waived by joint 

agreement of the Debtor, the Plan Sponsor, the Trustee, and 

the Supporting Holders.

10 28-33 Effect of Confirmation. This section sets forth the effect 

that confirmation of the Plan will have on the Debtor’s 

creditors. As described more fully below, this section also 

contains releases by the Debtor (section 10.6), exculpations 

(section 10.7), and an injunction (section 10.8).

11 33-35 Retention of Jurisdiction. This section contains provisions 

regarding the items over which the Bankruptcy Court will 

retain jurisdiction to decide after Confirmation and the 

Effective Date if they become issues in the future.

12 35-39 Miscellaneous Provisions. This section contains 

miscellaneous provisions of the Plan such as the governing 

law for the Plan, where to provide notice, and provisions for 

modifying and amending the Plan. 

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B. Treatment of Claims Under the Plan.

i. Class 1: Priority Non-Tax Claims.

This Class consists of all Allowed Priority Non-Tax Claims against the Debtor that are 

specified as having priority in section 507(a) of the Bankruptcy Code other than an Administrative 

Expense Claim, Fee Claim, or Priority Tax Claims, if any such Claims exist as of the Effective 

Date. Except to the extent that a Holder of an Allowed Priority Non-Tax Claim against the Debtor 

has agreed to a different treatment of such Claim, each such Holder shall receive, in full 

satisfaction of such Allowed Priority Non-Tax Claim, Cash in an amount equal to such Allowed 

Priority Non-Tax Claim, on or as soon as reasonably practicable after the later of (i) the Effective 

Date; (ii) the date the Priority Non-Tax Claim becomes an Allowed Claim; or (iii) the date for 

payment provided by any agreement or arrangement between the Debtor and the Holder of the 

Allowed Priority Non-Tax Claim against the Debtor.

ii. Class 2: Other Secured Claims. 

This Class consists of all Other Secured Claims against the Debtor. Except to the extent 

that a Holder of an Allowed Other Secured Claim agrees to different treatment, on the Effective 

Date each Other Secured Claim shall be Reinstated.

iii. Class 3: Bond Claim. 

This Class consists of the Claims of the holders of the Bonds and the Trustee against the 

Debtor. The Bond Claims are Allowed Claims. Upon the terms and subject to the conditions set 

forth in the Plan, in full and final satisfaction, settlement, release, and discharge of the Bond 

Claims, each Holder of a Bond Claim shall receive its Pro Rata share of the Series 2024 Bonds on 

the Effective Date or as soon as practicable thereafter.

iv. Class 4: General Unsecured Claims. 

This Class consists of all General Unsecured Claims against the Debtor. Except to the 

extent that a Holder of an Allowed General Unsecured Claim against the Debtor agrees to a 

different treatment of such Claim, on and after the Effective Date, the Reorganized Debtor shall 

continue to pay or dispute each General Unsecured Claim in the ordinary course of business as if 

the Chapter 11 Case had never been commenced.

v. Class 5: Subordinated Note Claims. 

This Class consists of all Subordinated Note Claims against the Debtor. The Subordinated 

Note Claims are Allowed. On the Effective Date, each Allowed Subordinated Note Claim shall 

be Reinstated.

vi. Interests in the Debtor. 

The Debtor is a nonprofit corporation, and, as such, there are no equity interests in the 

Debtor to be classified and treated under the Plan. 

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C. Meansfor Implementation of the Plan.

i. Refinancing Transactions.

On the Effective Date, the Debtor, the Reorganized Debtor, and any other Entities may 

take all actions as may be necessary or appropriate to effect any transaction described in, approved 

by, contemplated by, or necessary to effectuate the Plan, including: (i) the execution and delivery 

of appropriate agreements or other documents of restructuring, reorganization, disposition, or 

transfer containing terms that are consistent with the terms of the Plan and that satisfy the 

requirements of applicable law and any other terms to which the applicable entities may agree; 

(ii) the execution and delivery of appropriate instruments of transfer, assignment, assumption, or 

delegation of any asset, property, right, liability, debt, duty, or obligation on terms consistent with 

the terms of the Plan and having other terms to which the applicable parties agree; (iii) the filing 

of appropriate certificates or articles of incorporation or formation and amendments thereto, 

reincorporation, merger, or consolidation with the appropriate governmental authorities under 

applicable law; (iv) the Refinancing Transaction; and (v) all other actions that the Debtor or the 

Reorganized Debtor, as applicable, determines are necessary or appropriate including, without 

limitation, making filings or recordings that may be required by applicable law.

The Confirmation Order shall and shall be deemed to, under both section 1123 and section 

363 of the Bankruptcy Code, authorize, among other things, all actions as may be necessary or 

appropriate to effect any transaction described in, approved by, contemplated by, or necessary to 

effectuate the Plan.

ii. 2024 Bond Documents.

The Reorganized Debtor shall be authorized to enter into the 2024 Bond Documents on the 

Effective Date. On the Effective Date, and following the consummation of the Refinancing 

Transaction, the 2024 Bond Documents shall constitute legal, valid, binding, and authorized 

obligations of the Reorganized Debtor, enforceable in accordance with their terms. The financial 

accommodations to be extended under the 2024 Bond Documents are being extended and shall be 

deemed to have been extended in good faith and for legitimate business purposes and are 

reasonable. On the Effective Date, all of the Liens and security interests to be granted in 

accordance with the 2024 Bond Documents (i) shall be deemed to be granted, (ii) shall be legal, 

binding, and enforceable Liens on and security interests in the collateral granted thereunder in 

accordance with the terms of the 2024 Bond Documents, (iii) shall be deemed automatically 

perfected on the Effective Date (without any further action being required by the Reorganized 

Debtor, the Trustee, or any of Holders of Series 2024 Bonds), having the priority set forth in the 

2024 Bond Documents and subject only to such Liens and security interests as may be permitted 

under the 2024 Bond Documents, and (iv) shall not be subject to avoidance, recharacterization, or 

subordination (including equitable subordination) for any purposes whatsoever and shall not 

constitute preferential transfers, fraudulent conveyances, or other voidable transfers under the 

Bankruptcy Code or any applicable non-bankruptcy law. The Reorganized Debtor and the Entities 

granted such Liens and security interests are authorized to make all filings and recordings and to 

obtain all governmental approvals and consents necessary to establish and perfect such Liens and 

security interests under the provisions of the applicable state, provincial, federal, or other law 

(whether domestic or foreign) that would be applicable in the absence of the Plan and the 

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Confirmation Order (it being understood that perfection shall occur automatically by virtue of the 

entry of the Confirmation Order, and any such filings, recordings, approvals, and consents shall 

not be required) and will thereafter cooperate to make all other filings and recordings that 

otherwise would be necessary under applicable law to give notice of such Liens and security 

interests to third parties.

iii. Series 2024 Bonds.

On the Effective Date, the Reorganized Debtor shall cause the Issuer to issue the Series 

2024 Bonds, the primary economic terms of which are described below:9

Principal: $81,000,000 on the terms and conditions set forth in the 2024 

Bond Documents.

Rate of Interest: The Series 2024 Bonds will bear interest at a fixed rate of 5.75% 

per annum.

Maturity Date: December 1, 2054

Collateral: Pursuant to the Amended Master Indenture, the Liens and 

security interests granted in the Original Master Indenture will 

continue to secure the obligations under the Amended Master 

Indenture including the Series 2024 Note. Pursuant to such 

grants, the Trustee has first priority Liens and security interests 

in substantially all of the Debtor’s assets, including all real and 

personal property, including Debtor’s Gross Revenues (as 

defined in the Amended Master Indenture), except as otherwise 

provided in the 2024 Bond Documents.

Amortization The Series 2024 Bonds shall amortize pursuant to the 

Amortization Schedule. The Amortization Schedule is 

Addendum A to the Plan Support Agreement attached as Exhibit 

B hereto. 

The issuance of the Series 2024 Bonds for distribution under the Plan is authorized without 

the need for further corporate action, and all of the Series 2024 Bonds issued or issuable under the 

Plan shall be duly authorized and validly issued under the Plan. The Reorganized Debtor shall 

cause to be delivered customary legal opinions and other documents in connection with the 

issuance of the Series 2024 Bonds, in form and substance acceptable to the Trustee, including, 

without limitation, the Opinion of Bond Counsel described in the 2024 Bond Documents, subject 

to such exceptions as are reasonably acceptable to the Trustee.

D. Release, Exculpation, and Injunction Provisions.

Section 10 of the Plan provides for standard debtor releases, exculpations, and injunctions 

to ensure the enforceability of the Plan and prior orders of the Bankruptcy Court. The Debtor 

9 The information set forth in the accompanying chart is solely for summary purposes. To the extent there is any 

discrepancy between the information set forth in the chart and the 2024 Bond Documents, the 2024 Bond Documents, 

copies of which are attached hereto as Exhibit C, control. 

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believes that the releases, injunctions, and exculpations set forth in the Plan are appropriate and in 

accordance with applicable law. The Debtor believes that the Plan Sponsor, the Trustee, and the 

Supporting Holders have contributed value to the Debtor and its estate by, among other things, 

directing and approving the sale of the Debtor to the Plan Sponsor, settling their Bond Claims for 

the treatment provided in the Plan, negotiating the Plan Support Agreement, and agreeing to the 

Forbearance Agreement, each of which directly facilitated the Chapter 11 Case and the 

Refinancing Transaction implemented by the Plan.

i. Releases by the Debtor.

Pursuant to section 1123(b) of the Bankruptcy Code and except as otherwise 

specifically provided in the Plan, the Confirmation Order, the 2024 Bond Documents, or the 

Plan Supplement, for good and valuable consideration, including the consummation of the 

transactions contemplated by the Plan, as of the Effective Date, each Released Party will be 

deemed released and discharged by each and all of the Debtor, the Reorganized Debtor, and 

their Estates, in each case on behalf of themselves and their respective successors, assigns, 

and representatives, and any and all other entities who may purport to assert any cause of 

action, directly or derivatively, by, through, for, or because of the foregoing entities, from 

any and all claims, obligations, rights, suits, damages, causes of action, remedies, and 

liabilities whatsoever, including any derivative claims, asserted or assertable on behalf of any 

of the Debtor, the Reorganized Debtor, or their Estates, as applicable, whether known or 

unknown, foreseen or unforeseen, existing or hereinafter arising, in law, equity, or otherwise, 

that the Debtor, the Reorganized Debtor, or their Estates or affiliates would have been legally 

entitled to assert in their own right (whether individually or collectively) or on behalf of the 

holder of any Claim against the Debtor or other Entity, based on or relating to, or in any 

manner arising from, in whole or in part, the Debtor, the purchase, sale, or rescission of the 

purchase or sale of any security of the Debtor or the Reorganized Debtor, the subject matter 

of, or the transactions or events giving rise to, any Claim that is treated in the Plan, the 

business or contractual arrangements between the Debtor and any Released Party, the 

Debtor’s in- or out-of-court restructuring efforts, intercompany transactions, the Original 

Bond Documents, the Chapter 11 Case, the formulation, preparation, dissemination, 

negotiation, filing, or consummation of the Disclosure Statement, the Refinancing 

Transaction, the Plan, the 2024 Bond Documents, or any other restructuring transaction, 

contract, instrument, release, or other agreement or document created or entered into in 

connection with the Disclosure Statement, the Plan Support Agreement, or the Plan, the 

filing of the Chapter 11 Case, the pursuit of Confirmation of the Plan, the pursuit of 

consummation of the Plan, the administration and implementation of the Plan, including the 

issuance or distribution of securities pursuant to the Plan, or the distribution of property 

under the Plan or any other related agreement, or upon any other act or omission, 

transaction, agreement, event, or other occurrence taking place on or before the Effective 

Date, other than Claims or liabilities arising out of or relating to a Released Party’s gross 

negligence, willful misconduct, fraud, or criminal activity as determined by a Final Order of 

the Bankruptcy Court; provided, that any right to enforce the Plan and the Confirmation 

Order is not so released by Section 10.6 of the Plan.

The foregoing release shall be effective as of the Effective Date without further notice 

to or order of the Bankruptcy Court, act or action under applicable law, regulation, order, 

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or rule or the vote, consent, authorization, or approval of any Person and the Confirmation 

Order will permanently enjoin the commencement or prosecution by any Person or Entity, 

whether directly, derivatively, or otherwise, of any claims, obligations, suits, judgments, 

damages, demands, debts, rights, Causes of Action, or liabilities released under the foregoing 

release. Notwithstanding the foregoing, nothing in Section 10.6 of the Plan shall or shall be 

deemed to prohibit the Debtor or the Reorganized Debtor from asserting and enforcing any 

claims, obligations, suits, judgments, demands, debts, rights, Causes of Action, or liabilities 

they may have against any Person that is based upon an alleged breach of a confidentiality 

or non-compete obligation owed to the Debtor or the Reorganized Debtor, unless otherwise 

expressly provided for in the Plan.

Entry of the Confirmation Order shall constitute the Bankruptcy Court’s approval, 

under Bankruptcy Rule 9019, of foregoing release, which includes by reference each of the 

related provisions and definitions contained herein, and further, shall constitute the 

Bankruptcy Court’s finding that the foregoing release is: (i) in exchange for the good and 

valuable consideration provided by the Released Parties; (ii) a good faith settlement and 

compromise of the Claims released; (iii) in the best interest of the Debtor and its Estate; 

(iv) fair, equitable, and reasonable; and (v) given and made after due notice and opportunity 

for hearing.

ii. Exculpation.

To the maximum extent permitted by applicable law, no Exculpated Party will have 

or incur, and each Exculpated Party is hereby released and exculpated from, any Claim, 

obligations, suit, judgment, damage, demand, debt, right, cause of action, remedy, loss, and 

liability for any Claim in connection with or arising out of the administration of the Chapter 

11 Case, the negotiation and pursuit of the Plan Support Agreement, the Refinancing 

Transaction, the Plan, or the solicitation of votes for, or confirmation of, the Plan, the 

funding or consummation of the Plan, the occurrence of the Effective Date, the 

administration of the Plan, the property to be distributed under the Plan, the issuance of 

securities under or in connection with the Plan, or the transactions in furtherance of any of 

the foregoing, except for: (i) the liability of any entity that would otherwise result from the 

failure to perform or pay any obligation or liability under the Plan or any contract, 

instrument, release, or other agreement or document to be entered into or delivered in 

connection with the Plan; or (ii) the liability of any entity that would otherwise result from 

any such act or omission to the extent that such act or omission is determined to have 

constituted fraud, gross negligence, willful misconduct, or a criminal act as determined by a 

Final Order.

iii. Injunction.

Except as otherwise expressly provided in the Plan or the Confirmation Order, 

including but not limited to any right arising under or related to the 2024 Bond Documents, 

from and after the Effective Date, all persons and entities who have held, hold, or may hold 

Claims are, with respect to any such Claim, to the fullest extent provided under section 524 

and other applicable provisions of the Bankruptcy Code, permanently enjoined from 

(i) commencing or continuing, in any manner or in any place, directly or indirectly, any suit, 

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action, or other proceeding of any kind (including, without limitation, any proceeding in a 

judicial, arbitral, administrative, or other forum); (ii) enforcing, levying, attaching 

(including, without limitation, any prejudgment attachment), collecting, or recovering in any 

manner or by any means, whether directly or indirectly, any judgment, award, decree, or 

order; (iii) creating, perfecting, or enforcing in any manner, directly or indirectly, any Lien 

or encumbrance of any kind; (iv) asserting a setoff or right of subrogation of any kind; or 

(v) commencing or continuing in any manner any action or other proceeding of any kind 

that does not comply with or is inconsistent with the provisions of the Plan, in each case on 

account of or with respect to any Claim, demand, liability, obligation, debt, right, Cause of 

Action, or remedy released or to be released, settled or to be settled, or discharged or to be 

discharged under the Plan or the Confirmation Order against any person or entity so

released or discharged (or the property or Estate of any person or entity so released or 

discharged). 

IV. RISK FACTORS IN CONNECTION WITH THE PLAN.

The Holders of Bond Claims against the Debtor should read and carefully consider the 

following risk factors, as well as the other information set forth in this Disclosure Statement (and 

the documents delivered together herewith), before deciding whether to vote to accept or reject 

the Plan. These risk factors should not, however, be regarded as constituting the only risks 

associated with the Plan and its implementation.

A. Bankruptcy Considerations.

Although the Debtor believes the Plan will satisfy all requirements necessary for 

confirmation by the Bankruptcy Court, there can be no assurance that the Bankruptcy Court will 

confirm the Plan as proposed. Moreover, there can be no assurance that modifications of the 

Plan will not be required for confirmation or that such modifications would not necessitate the resolicitation of votes.

In addition, the occurrence of the Effective Date is conditioned on the satisfaction (or 

waiver) of the conditions precedent set forth in section 9 of the Plan, and there can be no assurance 

that such conditions will be satisfied or waived. In the event the conditions precedent described 

in section 9 of the Plan have not been satisfied, or waived (to the extent possible) by the Debtor or 

applicable parties (as provided for in the Plan) as of the Effective Date, then the Confirmation 

Order will be vacated, no Distributions will be made pursuant to the Plan, and the Debtor and all 

Holders of Claims will be restored to the status quo ante as though the Confirmation Date had 

never occurred.

Section 1122 of the Bankruptcy Code provides that a plan may place a claim in a particular 

class only if such claim is substantially similar to the other claims in such class. The Debtor 

believes that the classification of Claims under the Plan complies with the requirements set forth 

in the Bankruptcy Code because each Class of Claims encompass Claims that are substantially 

similar to the other Claims in each such Class. Nevertheless, there can be no assurance that the 

Bankruptcy Court will reach the same conclusion.

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B. Risks Related to the Debtor’s Business and Industry.

i. Even if the Plan is confirmed, the extent of the Debtor’s remaining 

indebtedness may impair its financial condition and the Debtor’s 

ability to grow and compete.

As of the date hereof, the Debtor’s total secured debt is approximately $112.3 million. 

Although the Debtor anticipates that the Plan will significantly decrease the annual debt service 

requirements of Stayton and, over time, increase its liquidity, it still will have a significant level 

of debt upon consummation of the Plan. The Debtor’s debt has important consequences for its 

financial condition, including:

(i) making the Debtor vulnerable to general adverse economic, 

competitive, and industry conditions;

(ii) limiting the Debtor’s ability to obtain additional financing to support 

its operations and make capital improvements, if necessary;

(iii) requiring a substantial portion of the Debtor’s cash flow from 

operations for the payment of principal and interest on its debt and 

reducing its ability to use its cash flow to fund working capital, 

capital expenditures, execution of its business strategy, acquisitions, 

operations, and general corporate requirements; and

(iv) limiting the Debtor’s ability to receive trade credit from its vendors 

or otherwise placing it at a competitive disadvantage to other less 

leveraged competitors.

ii. Servicing the Debtor’s debt will require a significant amount of cash, 

and its ability to generate sufficient cash depends upon many factors, 

some of which are beyond its control.

The Debtor’s ability to make payments on and refinance its debt, fund planned capital 

expenditures, and execute its business strategy depends on its ability to generate cash flow in the 

future. To some extent, this is subject to general economic, financial, competitive, and other 

factors that are beyond the Debtor’s control. Even if the Plan is consummated, there can be no 

assurance that the Debtor’s business will continue to generate cash flows at or above current levels 

or that it will be able to meet its cash needs. If the Debtor is unable to service its debt or 

experiences a significant reduction in its liquidity, the Debtor could be forced to reduce or delay 

planned capital expenditures and other initiatives, sell assets, restructure or refinance its debt, or 

seek additional capital from its affiliates, and the Debtor may be unable to take any of these actions 

on satisfactory terms or in a timely manner, or at all. Further, any of these actions may not be 

sufficient to allow the Debtor to service its debt obligations or may have a materially adverse effect 

on its results of operations and financial condition. The Debtor’s failure to generate sufficient 

operating cash flows to pay its debts or refinance its indebtedness could have a material adverse 

effect on its results of operations and financial condition. If the Debtor cannot make scheduled 

payments on its debt, it would be in default, and as a result, holders of such debt could declare all 

outstanding principal and interest to be due and payable and the Debtor’s future lenders could, 

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under certain circumstances, terminate their commitments to lend it money and foreclose against 

the assets securing its borrowings.

iii. The Debtor may fail to maintain turnover or occupancy.

The economic feasibility of the Facility depends upon the ability of the Facility to attract 

new residents and to maintain substantial occupancy of the Facility. If the Debtor does not achieve 

the required levels of occupancy for the Facility, the revenues anticipated by the Facility from Fees 

could be adversely affected. Additionally, if a substantial number of residents live beyond the life 

expectancies anticipated by the Debtor, new residents will be admitted at a slower rate and the 

receipt of additional, potentially higher entrance fees will be curtailed with a consequent 

impairment of the Facility’s cash flow. Even if the anticipated attrition levels are realized and 

maintained, no assurance can be given that remarketing of vacated units will take place as quickly 

as assumed by the Debtor.

iv. The Debtor may be faced with competition from other similar facilities.

The Debtor faces competition from similar facilities operating in or near its market area, 

from other residential facilities for older adults, and from existing facilities offering custodial, 

intermediate, and skilled nursing care. The Debtor may face additional competition in the future 

as a result of the construction of new, or the renovation or expansion of existing, housing and 

nursing care facilities for elderly persons in the area served by the Facility as well as in the areas 

surrounding the area served by the Facility.

v. The Plan and the related transactions, which contemplate transactions 

that will modify the Debtor’s capital structure, are based in large part 

upon assumptions and analyses developed by it. If these assumptions 

and analyses prove to be incorrect, the Debtor’s Plan may be

unsuccessful in its execution of the restructuring, and it may be unable 

to continue as a going concern.

The Plan and the transactions related thereto, which contemplate transactions that will 

affect the Debtor’s capital structure, are premised upon assumptions and analyses of the Debtor 

that are based upon the Debtor’s experience and perception of historical trends, current conditions, 

and expected future developments, as well as other factors that it considers appropriate under the 

circumstances. Whether actual future results and developments will be consistent with the 

Debtor’s expectations and assumptions depend on a number of factors.

In addition, the Plan relies upon financial forecasts, including with respect to revenue 

growth, improved earnings before interest, taxes, depreciation and amortization, improved interest 

margins, and growth in cash flow. Financial forecasts are necessarily speculative, and it is likely 

that one or more of the assumptions and estimates that are the basis of these financial forecasts 

will not be accurate. The Debtor’s actual financial condition and results of operations may differ, 

perhaps materially, from what it anticipated. Consequently, there can be no assurance that the 

results or developments contemplated by the Plan will occur or, even if they do occur, that they 

will have the anticipated effects on the Debtor’s business or operations. The failure of any such 

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results or developments to materialize as anticipated could materially adversely affect the 

successful execution of the transactions contemplated by the Plan.

vi. Uncertainties related to the Debtor’s business may impact its ability to 

attract new residents.

The Debtor’s success depends on its ability to consistently, accurately, and effectively 

provide affordable living accommodations and related healthcare and support services to middleincome seniors. Should seniors perceive that the uncertainties related to the Debtor’s business 

have adversely affected its services, there will a decrease in new residents attracted to its Facility.

vii. Uncertainties related to the Debtor’s business may create a distraction 

for or cause a loss of personnel and may otherwise adversely affect its 

ability to attract new personnel.

The market for qualified personnel is competitive and the Debtor’s future success will 

depend upon, among other factors, its ability to attract and retain key personnel. Uncertainties 

about the future prospects and viability of its business may impact the Debtor’s ability to attract

and retain key personnel. If the Debtor loses the services of key personnel, if one or more of them 

decides to join a competitor or otherwise compete with it, or if personnel are distracted due to the 

uncertainties about the future prospects and viability of its business, the Debtor may not be able to 

effectively implement its business strategy and its business could suffer. The loss of the services 

of any of the Debtor’s other key management personnel or the failure to attract and retain personnel 

could have a material adverse effect on its results of operations and financial condition due to 

disruptions in its leadership and the continuity of its business relationships.

viii. Third party reimbursement may be reduced or eliminated.

The health care industry, in general, is subject to regulation by a number of governmental 

agencies, including those which administer the Medicare reimbursement program, and other 

federal, state, and local governmental agencies. As a result, the Debtor is sensitive to legislative 

and regulatory changes in such programs and is affected by reductions in governmental spending 

for such programs. Congress has in the past enacted a number of provisions which affect health 

care providers and additional legislative changes can be expected. Previous legislative actions 

have included limitation of payments to nursing homes under the Medicare program.

Future legislation, regulation, or actions by the federal government are expected to 

continue the trend toward more restrictive limitations on reimbursement for long-term care 

services. At present, no determination can be made concerning whether, or in what form, such 

legislation would be introduced and enacted into law. Similarly, the impact of future cost control 

programs and future regulations upon the Debtor’s financial performance cannot be determined at 

this time.

The Debtor may receive reimbursement from non-governmental third-party payors, 

such as commercial insurers, employers under self-insurance programs, health maintenance 

organizations, and preferred provider organizations. Most of these programs make payments 

at rates which are less than actual charges. Accordingly, there can be no assurance that 

payments made under such programs will be adequate to cover actual costs incurred.

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ix. The income of the elderly may diminish.

A large percentage of the monthly income of the residents of the Facility is fixed income 

derived from pensions and social security or income from investments. If, due to inflation or 

otherwise, substantial increases in monthly fees are required to cover increases in operating costs, 

wages, benefits, and other expenses, residents may have difficulty paying such monthly fees.

Furthermore, investment income of the residents may be adversely affected by declines in the 

stock market and sustained historically low market interest rates, also resulting in payment

difficulties.

x. Other Possible Risk Factors.

The occurrence of any of the following events, or other unanticipated events, could 

also adversely affect the financial condition or results of operations of the Debtor:

(i) reinstatement of or establishment of mandatory governmental wage, 

rent, or price controls;

(ii) adoption of federal, state, or local legislation or regulations having 

an adverse effect on the future operating or financial performance of 

the Debtor;

(iii) events adversely affecting the operation of the Facility, including 

enactment of legislation imposing ceilings on increases in health 

care charges, changes in Medicare or comparable regulations, or 

attempts by third-party payors administering health care cost 

reimbursement plans to control or restrict the operations of certain 

health care facilities;

(iv) a decline in the population, a change in the age composition of the 

population, or a decline in the economic conditions of the Debtor’s 

market area;

(v) developments or events affecting the federal or state exemption of 

the Debtor’s income from taxation;

(vi) suspension or revocation of or failure to renew any license, 

certificate, or approval to operate the Facility, or any portion thereof, 

or any restriction on new admissions to licensed beds;

(vii) reductions in utilization of continuing care retirement and assisted 

living facilities as a result of preventive medicine, improved 

occupational health and safety, development and utilization of 

medical and scientific research and technological advances, and 

other developments;

(viii) changes in reimbursement procedures or in contracts under public 

or private insurance programs;

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(ix) increased costs of attracting and retaining, or decreased availability 

of a sufficient number of, health professionals, including trained 

nurses vital to the Facility;

(x) increases in costs, including costs associated with, among other 

things, salaries, wages and fringe benefits, supplies, technology and 

equipment, insurance, energy and other utilities, compliance with or 

violation of environmental laws and regulations, and other costs that 

could result in a sizable increase in expenditures without a 

corresponding increase in revenues;

(xi) inability of the Debtor to obtain future governmental approvals to 

undertake additional projects necessary to remain competitive as to 

rates, charges, and the quality and scope of care or any limitation on 

the availability of tax-exempt or other financing for future projects; 

and

(xii) the occurrence of natural disasters, including floods, hurricanes, 

tornadoes, and earthquakes, could damage the Facility, interrupt 

utility service, or otherwise impair the operations of the Debtor and 

the generation of revenues from the Facility. The Facility is 

required to be covered by general property insurance in amounts 

which management of the Debtor considers to be sufficient to 

provide for the replacement of such Facility in the event of a natural 

disaster.

C. Additional Factors.

i. No Duty to Update Disclosures.

The Debtor has no duty to update the information contained in this Disclosure Statement 

as of the date hereof, unless otherwise specified herein, or unless the Debtor is required to do so 

pursuant to an order of the Bankruptcy Court. Delivery of the Disclosure Statement after the 

date hereof does not imply that the information contained herein has remained unchanged.

ii. Representations Outside this Disclosure Statement.

This Disclosure Statement contains representations concerning or related to the Debtor and 

the Plan that are subject to approval by the Bankruptcy Court. Please be advised that any 

representations or inducements outside this Disclosure Statement and any related documents which 

are intended to secure your acceptance or rejection of the Plan should not be relied upon by Holders 

of Claims that are entitled to vote to accept or reject the Plan.

iii. No Admission.

The information and representations contained herein shall not be construed to constitute 

an admission of, or be deemed evidence of, any legal effect of the Plan on the Debtor or Holders 

of Claims.

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iv. Tax and Other Related Considerations.

A discussion of potential tax consequences of the Plan is provided in section VII hereof; 

however, the content of this Disclosure Statement is not intended and should not be construed as 

tax, legal, business, or other professional advice. Holders of Claims should seek advice from their 

own independent tax, legal, or other professional advisors based on their own individual 

circumstances.

V. PLAN CONFIRMATION AND CONSUMMATION.

A. The Confirmation Hearing.

Bankruptcy Code section 1128(a) requires the Bankruptcy Court, after appropriate notice, 

to hold a Confirmation Hearing. On, or as promptly as practicable after the filing of the Plan and 

this Disclosure Statement, the Debtor will request that the Bankruptcy Court schedule the 

Confirmation Hearing. Notice of the Confirmation Hearing will be provided to all known 

creditors or their representatives. The Confirmation Hearing may be adjourned from time to time 

by the Bankruptcy Court without further notice except for an announcement of the adjourned date 

made at the Confirmation Hearing or any subsequent adjourned Confirmation Hearing.

B. Objections to Confirmation.

Section 1128(b) of the Bankruptcy Code provides that any party in interest may object to 

the confirmation of a plan. Any objection to confirmation of the Plan must be in writing, must 

conform to the Bankruptcy Rules and the Local Bankruptcy Rules of the United Stated Bankruptcy 

Court for the Northern District of Texas, must set forth the name of the objector, the nature and

amount of Claims held or asserted by the objector against the Debtor, the basis for the objection 

and the specific grounds therefore, and must be filed with the Bankruptcy Court, together with 

proof of service thereof, and served upon the following parties, including such other parties as the 

Bankruptcy Court may order, by the deadline that will be set forth in the notice of Confirmation 

Hearing: 

i) Debtor at 

Tarrant County Senior Living Center, Inc.

c/o Jeff Gentry, Executive Vice President & 

Chief Operating Officer Buckner International

700 North Pearl Street, Suite 1200

Dallas, Texas 75201

Attention: Jeff Gentry

 Renee Reimer

Email: jgentry@buckner.org

 rreimer@buckner.org

ii) Counsel to the Debtor at

Butler Snow LLP

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2911 Turtle Creek Blvd., Suite 1400

Dallas, TX 75219 

Attention: Martin A. Sosland

 Candice M. Carson 

E-mail: martin.sosland@butlersnow.com 

 candice.carson@butlersnow.com 

-andButler Snow LLP 

6075 Poplar Avenue, Suite 500, 

Memphis, TN 38119 

Tel: (901) 680-7200 

Fax: (901) 680-7201 

Attention: Adam M. Langley 

 Kenneth Groce 

E-mail: adam.langley@butlersnow.com 

 kenneth.groce@butlersnow.com 

-andButler Snow LLP 

1819 Fifth Avenue North, Suite 1000 

Birmingham AL 35203 

Tel: (205) 297-2200 

Fax: (205) 297-2201 

Attention: Xan Flowers 

E-mail: xan.flowers@butlersnow.com

iii) Office of the U.S. Trustee for the Northern District of Texas at

Office of The United States Trustee

Earle Cabell Federal Building

1100 Commerce Street, Room 976 

Dallas, TX 75242 

iv) Counsel to the Trustee and the Supporting Holders at 

Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. 

One Financial Center

Boston, MA 02111 

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Attention: Daniel S. Bleck

 Eric Blythe

E-mail: DSBleck@mintz.com

 ERBlythe@mintz.com

Bankruptcy Rule 9014 governs objections to confirmation of the Plan. UNLESS AN 

OBJECTION TO CONFIRMATION OF THE PLAN IS TIMELY SERVED AND FILED,

IT MAY NOT BE CONSIDERED BY THE BANKRUPTCY COURT IN DETERMINING 

CONFIRMATION OF THE PLAN.

C. Requirements for Confirmation of the Plan.

The Bankruptcy Court will confirm the Plan only if all of the requirements of section 1129 

of the Bankruptcy Code are met. Among the requirements for confirmation are that the Plan is 

(i) accepted by all impaired Classes of Claims entitled to vote or, if rejected or deemed rejected by 

an impaired Class, that the Plan (a) “does not discriminate unfairly,” (b) is “fair and equitable” as 

to such Class and (c) in the “best interests” of the holders of Claims impaired under the Plan (that 

is, Creditors will receive at least as much under the Plan as they would receive in a hypothetical 

liquidation case under chapter 7 of the Bankruptcy Code); and (ii) feasible (that is, there is a 

reasonable probability that the Debtor will be able to perform its obligations under the Plan without 

needing further financial reorganization not contemplated by the Plan).

i. Acceptance by Impaired Classes.

The Bankruptcy Code requires, as a condition to confirmation, that, except as described 

below, each class of claims or equity interests that is impaired under a plan, accept the plan. A 

class that is not “impaired” under a plan is deemed to have accepted the plan and, therefore, 

solicitation of acceptances with respect to such class is not required. As a general matter under 

the Bankruptcy Code, a class is “impaired,” unless the plan: (i) leaves unaltered the legal, equitable 

and contractual rights to which the claim or the equity interest entitles the holder of such claim or 

equity interest; (ii) cures any default and reinstates the original terms of such claim or equity 

interest; or (iii) provides that, on the consummation date, the holder of such claim or equity interest 

receives cash equal to the allowed amount of that claim or, with respect to any equity interest, any 

fixed liquidation preference to which the holder of such equity interest is entitled to any fixed price 

at which the debtor may redeem the security.

Section 1126(c) of the Bankruptcy Code defines acceptance of a plan by a class of impaired 

claims as acceptance by holders of at least two-thirds (2/3) in dollar amount and more than onehalf (1/2) in number of claims in that class, but for that purpose counts only those who actually

vote to accept or to reject the plan. Thus, a class of claims will have voted to accept the plan only

if two-thirds (2/3) in amount and a majority in number actually voting cast their ballots in favor of 

acceptance. A vote may be disregarded if the Bankruptcy Court determines, after notice and a

hearing, that acceptance or rejection was not solicited or procured in good faith or in accordance 

with the provisions of the Bankruptcy Code.

Any Class of Claims that is not occupied as of the commencement of the Confirmation 

Hearing by an Allowed Claim or a Claim temporarily Allowed under Bankruptcy Rule 3018 shall 

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be deemed eliminated from the Plan for purposes of voting to accept or reject the Plan and for 

purposes of determining acceptance or rejection of the Plan by such Class pursuant to section

1129(a)(8) of the Bankruptcy Code. If no votes to accept or reject the Plan are received with 

respect to a Class whose votes have been solicited under the Plan (other than a Class that is deemed 

eliminated under the Plan), such Class shall be deemed to have voted to accept the Plan.

ii. Best Interests of Creditors.

Often called the “best interests” test, section 1129(a)(7) of the Bankruptcy Code requires 

that a bankruptcy court find, as a condition to confirmation, that, with respect to an impaired class 

of claims or interests, each holder of an impaired claim or interest in such class either (i) accepts

the plan or (ii) receives or retains under the plan property of a value, as of the effective date of the 

plan, that is not less than the amount (value) such holder would receive or retain if the debtor was 

liquidated under chapter 7 of the Bankruptcy Code on the Effective Date. Class 3, consisting of 

Bond Claims, is the only impaired class under the Plan. 

In chapter 7 cases, a chapter 7 trustee is appointed to commence a liquidation of the 

debtor’s assets because the debtor is insolvent. To do so, the chapter 7 trustee retains professionals, 

conducts an initial evaluation of the debtor’s assets, and then proceeds with what is generally 

referred to as a “fire sale” of the debtor’s assets, seeking, if possible, to sell substantially all of the 

debtor’s remaining assets either wholesale or through piecemeal liquidation in a compressed 

timeframe. In chapter 7 cases, creditors and interest holders of a debtor are paid from available 

assets generally in the following order, with no junior class receiving any payments until all 

amounts due to senior classes have been paid in full: (i) holders of secured claims (to the extent of 

the value of their collateral); (ii) holders of priority claims; (iii) holders of unsecured claims; 

(iv) holders of debt expressly subordinated by its terms or by order of the bankruptcy court; and 

(v) holders of interests. Accordingly, any cash amount that would be available for satisfaction of 

claims (other than secured claims) would consist of the proceeds resulting from the disposition of 

the unencumbered assets of the debtor, augmented by the unencumbered cash held by the debtor 

at the time of the commencement of the liquidation. Such cash would be reduced by the amount 

of the costs and expenses of the liquidation and by such additional administrative and priority 

claims that may result from termination of the debtor’s business and the use of chapter 7 for 

purposes of a liquidation.

The Debtor believes that confirmation of the Plan will provide each Holder of a Bond 

Claim with a recovery greater than or equal to the value of any distributions if the Chapter 11 Case 

were converted to a case under chapter 7. As detailed in the section regarding the Debtor’s 

prepetition capital structure, the Debtor’s current liabilities far exceed their assets on a book value 

basis. Importantly, the Debtor has already conducted a robust market sale process, which 

effectively set the going concern value of its business. 

As discussed above, beginning in the first quarter of 2023, Stayton, Lifespace, and the 

Supporting Holders conducted a year-long out-of-court sale process, during which Stayton and its 

advisors canvassed the market for potential purchasers for the Stayton. During that process, the 

Plan Sponsor emerged as the front-runner and was initially selected as the stalking horse purchaser. 

The Stayton then commenced an overbid process, seeking a higher and better offer than that of the 

Plan Sponsor. Despite receiving three competing bids, the Plan Sponsor’s offer was ultimately 

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chosen by the Stayton, its advisors, the Trustee, and the Supporting Hoolders as the highest and 

best offer received. Accordingly, given the robust out-of-court marketing process, the Debtor 

believe that the highest and best offer available for the Debtor’s assets is that represented by the 

Plan, which provides all Holders of Claims (other than Holders of Bond Claims) payment in full. 

The Debtor further believes that any recovery received by the Holders of Bond Claims in 

a hypothetical chapter 7 liquidation would be substantially reduced. Pursuant to the Plan, the 

Supporting Holders have agreed to reduce the outstanding principal amount of the bond debt by 

approximately 28%. Any liquidation pursuant to chapter 7 of the Bankruptcy Code would have to 

take into account the required time and resources necessary to effectuate an orderly wind down of 

the Facility, which provides critical care to residents and must comply with numerous federal and 

state regulations, as well as the fees incurred by the chapter 7 trustee in doing so. Accordingly, 

even in a best-case scenario where a chapter 7 trustee is able to sell the Debtors’ assets for an 

amount near the current going concern value of $81,000,000 that the Holders of Bond Claims are 

being offered under the Plan, the amount such Holders will likely recover in a hypothetical chapter 

7 liquidation will be less. Finally, given the fact that the expected recovery for the Debtor’s 

secured creditors would be less than the full value of their claims, the Debtor expects that all other 

holders of claims in the Debtor would receive nothing in a hypothetical chapter 7 liquidation.

Accordingly, the Debtor believes that in a chapter 7 liquidation, Holders of Claims would 

receive less than such Holders would receive under the Plan. There can be no assurance, 

however, as to values that would actually be realized in a chapter 7 liquidation, nor can there be 

any assurance that a Bankruptcy Court would accept the Debtor’s conclusions or concur with such

assumptions in making its determinations under section 1129(a)(7) of the Bankruptcy Code. 

iii. Feasibility of the Plan.

Pursuant to section 1129(a)(11) of the Bankruptcy Code, a debtor must demonstrate that 

confirmation of a plan is not likely to be followed by the liquidation or need for further financial 

reorganization of the debtor or its successor under the plan, unless such liquidation or 

reorganization is proposed under the plan. 

In order to establish the feasibility of the Plan for purposes of section 1129(a)(11) of the 

Bankruptcy Code, the Debtor and its management team and advisors, have developed the Financial 

Projections attached hereto as Exhibit D. The Financial Projections set forth the projected 

financial performance of the Reorganized Debtor over a defined period of time based upon a 

number of assumptions and factors. The Financial Projections are unaudited. Impaired creditors 

and other interested parties should review Section IV of this Disclosure Statement for a discussion 

of certain factors that may affect the future financial performance of the Reorganized Debtor. 

The Debtor anticipates that the Financial Projections will show that the Reorganized 

Debtor will have a viable operation following the Chapter 11 Case and that confirmation of the 

Plan is not likely to be followed by liquidation or the need for further reorganization. 

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iv. No Unfair Discrimination.

The “no unfair discrimination” test requires that the plan not provide for unfair treatment 

with respect to classes of claims or interests that are of equal priority but are receiving different 

treatment under the plan.

v. Fair and Equitable.

The fair and equitable requirement applies to classes of claims of different priority and 

status, such as secured versus unsecured. The plan satisfies the fair and equitable requirement if 

no class of claims receives more than 100% of the allowed amount of the claims in such class. 

Further, if a class of claims is considered a dissenting class, i.e., a Class of Claims that is deemed 

to reject the Plan because the required majorities in amount and number of votes is not received 

from the Class (a “Dissenting Class”), the following requirements apply:

a. Class of Secured Claims.

Each holder of an impaired secured claim either: (i) retains its liens on the subject property, 

to the extent of the allowed amount of its secured claim and receives deferred cash payments 

having a value, as of the effective date of the plan, of at least the allowed amount of such claim; 

(ii) has the right to credit bid the amount of its claim if its property is sold and retains its liens on 

the proceeds of the sale (or if sold, on the proceeds thereof); or (iii) receives the “indubitable 

equivalent” of its allowed secured claim.

b. Class of Unsecured Creditors.

Either (i) each holder of an impaired unsecured claim receives or retains under the plan 

property of a value equal to the amount of its allowed claim or (ii) the holders of claims and 

interests that are junior to the claims of the Dissenting Class will not receive any property under 

the plan.

c. Class of Interests.

Either (i) each interest holder will receive or retain under the plan property of a value equal 

to the greater of (a) the fixed liquidation preference or redemption price, if any, of such stock and 

(b) the value of the stock, or (ii) the holders of interests that are junior to the interests of the 

Dissenting Class will not receive any property under the plan.

The Debtor believes the Plan does not “discriminate unfairly” against holders of Class 3 

Bond Claims. To the extent that holders of Class 3 Bond Claims vote to reject the Plan, 

notwithstanding the agreement by the Supporting Holders to support the Plan, the Debtor reserves 

the right to (i) resolicit the Plan or (ii) withdraw the Plan and seek an alternative transaction. 

VI. ALTERNATIVES TO CONFIRMATION AND CONSUMMATION OF THE 

PLAN.

The Debtor believes the Plan is in the best interests of its Creditors and should accordingly 

be accepted and confirmed. If the Plan as proposed, however, is not confirmed, the following 

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alternatives may be available to the Debtor: (i) a liquidation of the Debtor’s Assets pursuant to 

chapter 7 of the Bankruptcy Code; or (ii) an alternative plan of reorganization or liquidation may 

be proposed and confirmed.

A. Chapter 7 Liquidation.

If a plan pursuant to chapter 11 of the Bankruptcy Code is not confirmed by the Bankruptcy 

Court, the Debtor’s Chapter 11 Case may be converted to a liquidation case under chapter 7 of the 

Bankruptcy Code, in which a trustee would be elected or appointed, pursuant to applicable 

provisions of chapter 7 of the Bankruptcy Code, to liquidate the Assets of the Debtor for 

distribution in accordance with the priorities established by the Bankruptcy Code. The Debtor 

believes that such a liquidation would result in smaller distributions being made to the Debtor’s 

Creditors than those provided for in the Plan because: (i) the delay associated with the conversion 

of the Chapter 11 Cases; (ii) additional administrative expenses attendant to the appointment of a 

trustee and the trustee’s employment of attorneys and other professionals; and (iii) additional 

expenses and Claims, some of which would be entitled to priority, which would be generated

during the liquidation and from the rejection of leases and other executory contracts in connection 

with a cessation of the Debtor’s operations. The Debtor has found that confirmation of the Plan 

will provide each Holder of an Allowed Claim with a recovery that is not less than such Holder 

would receive pursuant to liquidation of the Debtor under chapter 7 of the Bankruptcy Code.

B. Alternative Plan Pursuant to Chapter 11 of the Bankruptcy Code.

If the Plan is not confirmed, the Debtor (or if the Debtor’s exclusive period in which to file 

a plan of reorganization has expired, any other party in interest) may propose a different plan, 

which might involve either (i) an alternative means for the reorganization and continuation of the 

Debtor’s business or (ii) an orderly liquidation of the Debtor’s assets. However, the Debtor 

believes that the terms of the Plan provide for an orderly and efficient restructuring of the Debtor’s

obligations and will result in the realization of the most value for Holders of Claims against the 

Debtor’s Estate.

VII. CERTAIN FEDERAL TAX MATTERS RELATING TO THE SERIES 2024 

BONDS.

THE FOLLOWING FEDERAL INCOME TAX CONSIDERATIONS ARE FOR 

GENERAL INFORMATION ONLY AND ARE NOT TAX ADVICE. THE SUMMARY 

DOES NOT DEAL WITH THE TAX TREATMENT OF PERSONS WHO HOLD SERIES 

2020 BONDS AND RECEIVE SERIES 2024 BONDS PURSUANT TO THE EXCHANGE 

DESCRIBED IN THIS DISCLOSURE STATEMENT, AND BOND COUNSEL IS NOT 

EXPRESSING ANY OPINION REGARDING ANY FEDERAL OR STATE INCOME TAX 

CONSEQUENCES TO THE HOLDER OF THE SERIES 2020 BONDS AS A RESULT OF 

THE EXCHANGE. EACH PROSPECTIVE INVESTOR SHOULD CONSULT ITS OWN 

TAX ADVISOR AS TO THE TAX CONSEQUENCES OF THE ACQUISITION, 

OWNERSHIP, AND DISPOSITION OF THE SERIES 2024 BONDS.

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A. Opinion of Bond Counsel.

In the opinion of Bracewell LLP, the Debtor’s bond counsel (“Bond Counsel”), assuming 

compliance with certain covenants and based on certain representations, under existing law, 

(i) interest on the Series 2024 Bonds is excludable from gross income for federal income tax

purposes under IRC Section 103, and (ii) the Series 2024 Bonds are “qualified 501(c)(3) bonds” 

under IRC Section 103, and, as such, interest on the Series 2024 Bonds is not an item of tax 

preference for purposes of the federal alternative minimum tax on individuals. 

The IRC imposes a number of requirements that must be satisfied for interest on state or 

local obligations, such as the Series 2024 Bonds, to be excludable from gross income for federal 

income tax purposes. These requirements include a requirement that the Borrower be an 

organization described in IRC Section 501(c)(3), limitations on the use of proceeds of such bonds 

and the source of repayment of bonds, limitations on the investment of such proceeds prior to 

expenditure, a requirement that excess arbitrage earned on the investment of such proceeds be paid 

periodically to the United States of America and a requirement that the Issuer file an information 

report with the Internal Revenue Service ( the “IRS”). The Borrower and the Issuer have 

covenanted in the Bond Indenture, the Loan Agreement, and the Tax Compliance Agreement that 

they will comply with these requirements.

For purposes of its opinion that the Series 2024 Bonds are “qualified 501(c)(3) bonds,” 

Bond Counsel will assume continuing compliance with the covenants of the Bond Indenture, Loan 

Agreement, and Tax Compliance Agreement pertaining to those sections of the IRC that affect the 

status of the Borrower as an organization described in IRC Section 501(c)(3) and the excludability 

from gross income of interest on the Series 2024 Bonds for federal income tax purposes. In 

addition, Bond Counsel will rely on representations by the Issuer, the Borrower, and other parties 

involved with the issuance of the Bonds with respect to matters solely within the knowledge of the 

Issuer, the Borrower, and such parties, respectively, which Bond Counsel has not independently 

verified, to the effect that the Borrower is an organization described in IRC Section 501(c)(3). If 

the Borrower or the Issuer should fail to comply with the covenants in the Bond Indenture, Loan 

Agreement, or the Tax Compliance Agreement, or if such representations should be determined to 

be inaccurate or incomplete, interest on the Series 2024 Bonds could become includable in gross 

income for federal income tax purposes from the Effective Date of the Plan, regardless of the date 

on which the event causing such inclusion occurs.

Bond Counsel will express no opinion as to the amount or timing of interest on the Series 

2024 Bonds or, except as stated above, to any federal, state or local tax consequences resulting 

from the ownership of, receipt of interest on, or disposition of, the Series 2024 Bonds. Certain 

actions may be taken or omitted subject to the terms and conditions set forth in the Bond Indenture, 

Loan Agreement, or Tax Compliance Agreement upon the advice or with the approving opinion 

of nationally recognized bond counsel. Bond Counsel will express no opinion with respect to 

Bond Counsel’s ability to render an opinion that such actions, if taken or omitted, will not 

adversely affect the excludability of interest on the Series 2024 Bonds from gross income for 

federal income tax purposes.

Bond Counsel’s opinions are based on existing law on the Effective Date of the Plan, which 

is subject to change. Such opinions are further based on Bond Counsel’s knowledge of facts as of 

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the date thereof. Bond Counsel assumes no duty to update or supplement its opinions to reflect 

any facts or circumstances that may thereafter come to Bond Counsel’s attention or to reflect any 

changes in any law that may thereafter occur or become effective. Moreover, Bond Counsel’s 

opinions are not a guarantee of result and are not binding on the IRS; rather, such opinions 

represent Bond Counsel’s legal judgment based upon its review of existing law and in reliance 

upon the representations and covenants referenced above that it deems relevant to such opinions. 

Bond Counsel observes that the Borrower has covenanted in the Loan Agreement not to take any 

action, or omit to take any action within its control, that if taken or omitted, respectively, will result 

in treatment of interest on the Series 2024 Bonds as includable in gross income for federal income 

tax purposes. The IRS has an ongoing audit program to determine compliance with rules that 

relate to whether interest on state or local obligations, such as the Series 2024 Bonds, is includable 

in gross income for federal income tax purposes. No assurance can be given regarding whether 

the IRS will commence an audit of the Series 2024 Bonds. If an audit is commenced, in accordance 

with its current published procedures, the IRS is likely to treat the Issuer as the taxpayer and the 

owners of the Series 2024 Bonds may not have a right to participate in such audit. Public 

awareness of any future audit of the Series 2024 Bonds could adversely affect the value and 

liquidity of the Series 2024 Bonds regardless of the ultimate outcome of the audit.

B. Other Tax Consequences.

i. Collateral Tax Consequences.

Prospective purchasers of the Series 2024 Bonds should be aware that the ownership of 

tax-exempt obligations may result in collateral federal income tax consequences, including but not 

limited to those noted below. Therefore, prospective purchasers of the Series 2024 Bonds should 

consult their own tax advisors as to the tax consequences of the acquisition, ownership and 

disposition of the Series 2024 Bonds.

An “applicable corporation” (as defined in IRC Section 59(k)) may be subject to a 15% 

alternative minimum tax imposed under IRC Section 55 on its “adjusted financial statement 

income” (as defined in IRC Section 56A) for such taxable year. Because interest on tax-exempt 

obligations, such as the Series 2024 Bonds, is included in a corporation’s “adjusted financial 

statement income,” ownership of the Series 2024 Bonds could subject certain corporations to 

alternative minimum tax consequences.

Ownership of tax-exempt obligations also may result in collateral federal income tax 

consequences to financial institutions, life insurance and property and casualty insurance 

companies, certain S corporations with Subchapter C earnings and profits, individual recipients of 

Social Security or Railroad Retirement benefits, taxpayers who may be deemed to have incurred 

or continued indebtedness to purchase or carry tax-exempt obligations, low and middle income 

taxpayers otherwise qualifying for the health insurance premium assistance credit and individuals 

otherwise qualifying for the earned income tax credit. In addition, certain foreign corporations 

doing business in the United States may be subject to the “branch profits tax” on their effectively 

connected earnings and profits, including tax-exempt interest such as interest on the Series 2024 

Bonds.

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Prospective purchasers of the Series 2024 Bonds should also be aware that, under the IRC, 

taxpayers are required to report on their returns the amount of tax-exempt interest, such as interest 

on the Series 2024 Bonds, received or accrued during the year. 

ii. Tax Legislative Changes. 

Current law may change so as to directly or indirectly reduce or eliminate the benefit of 

the excludability of interest on the Series 2024 Bonds from gross income for federal income tax 

purposes. Any proposed legislation, whether or not enacted, could also affect the value and 

liquidity of the Series 2024 Bonds. Prospective purchasers of the Series 2024 Bonds should 

consult with their own tax advisors with respect to any recently enacted, proposed, pending or 

future legislation.

VIII. RECOMMENDATION AND CONCLUSION. 

The Debtor believes the Plan is in the best interests of its Estate, Creditors, and other 

interested parties and urge the Holders of Impaired Bond Claims to vote to accept the Plan and to 

evidence such acceptance by properly voting and timely returning their ballots.

Dated: August 30, 2024 Respectfully submitted,

TARRANT COUNTY SENIOR LIVING 

CENTER, INC. 

By: /s/ Jeff Gentry 

Name: Jeff Gentry 

Title: Director, Senior Vice 

President, and Chief Financial 

Officer

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