OKMULGEE, Okla. — With more amendments filed less than 24 hours before a previously scheduled federal hearing, Go Ye Village does not have a court-approved bankruptcy reorganization plan on the books.
On Tuesday, attorneys for the retirement community filed amendments to Go Ye Village's proposed reorganization plan, thus prohibiting Judge Tom Cornish from taking binding action Wednesday morning on the proposal submitted in January, to allow time for written objections.
If approved, the new plan would still give priority to the claims from the three banks that hold bonds and mortgages against the facility — Bank of Oklahoma, Bank of Cherokee County and Armstrong Bank — followed by reimbursement to individual non-secured creditors. However, it would expedite the repayment timeline, with creditor reimbursement starting on June 1.
The plan also calls for the village's board of directors to be reconstituted with at least two seats going to non-resident creditors.
Although he could not rule on the proposal Wednesday morning, Cornish signaled his early support for the proposal from the bench.
"I will do whatever I can to keep Go Ye Village open and the quality of care up," he told the standing room only crowd. "This is a long-term plan. It's doable, but it will be a slow process. We are doing the best we can with the hand dealt us. This is far from perfect, but it is doable. That is what we're striving for here."
An approval hearing is scheduled for April 17 at 10 a.m. Although the proposal is subject to a formal vote by the creditors, it received support in court Wednesday from attorneys for both sides, as well as from several of the more than 300 people owed money.
"We're looking forward to seeing a happy conclusion to our predicament," said Bob Rice, one of village's creditors. "Keeping our residents at Go Ye relies upon that."
The facility, at 1201 W. 4th St., filed for Chapter 11 bankruptcy more two years ago, with three banks holding bonds and mortgages and more than $21 million borrowed from 300 creditors, most of whom were either residents or deferred residents. Since filing for bankruptcy, the facility has reduced its payroll by $1.1 million annually and more than $345,000 in annual service contracts have been terminated as part of the restructuring effort.
Even with bankruptcy proceedings still going on, Steve Thomas, Go Ye Village's chief restructuring officer, told the court Wednesday that the facility's occupancy rate has climbed in the past two years by 3.2 percent. As of Wednesday, it was at 73.7 percent, with several former residents asking about possibly returning once the restructuring efforts are finished. Under the proposed restructuring plan, even more spots would be opened up with the creation of a 32-bed memory care unit.
Additionally, Judge Cornish approved settlements with Jim and Denise Richardson, the property's former owners, as well as with Golden Years Advisers, a management company set up by Jim Richardson. Under the terms of the settlement, more than $2 million in claims will be waived.
As part of the original bankruptcy plan, the Richardsons were slated to be repaid after claims from the three banks and former residents were settled, which was projected to take up to a decade.
Neither the Richardsons nor their attorneys were at Wednesday's hearing.
With the settlement approved, Thomas said the village would not be pursuing additional civil litigation against the Richardsons for mismanaging the facility, claiming it would be cost-prohibitive.
Under the Richardsons' leadership, up to one-third of Go Ye Village's revenue was used to make interest payments on loans.
"We think this is in our best interests and will help us move ahead," Thomas said. "At a certain point, you have to leave it to God and the government to determine what happens to the other entities. My money is on God."