HBL SNF is in the plan-implementation stage of a confirmed consensual Subchapter V case, but the reorganized debtor is behind its initial distribution schedule and is trying to cure those defaults by June 30, 2026. The case began on November 1, 2021, when the operator of Epic Rehabilitation and Nursing at White Plains filed a Subchapter V petition and first-day declaration describing a skilled nursing and rehabilitation business with a capital stack dominated by insider/intercompany obligations and modest equipment financing, including roughly $16.5 million of scheduled prepetition debt in the Local Rule 1007-2 DeclarationDkt. 3.
The restructuring path ultimately became a consensual reorganization rather than a sale or liquidation. On June 2, 2025, the court confirmed the debtor’s Corrected Third Amended Chapter 11 Subchapter V Plan, finding the plan feasible and in creditors’ best interests, approving the new lease agreement viewed as essential to continued operations, preserving specified lien and contract rights, and allowing the reorganized debtor to continue operating outside ordinary bankruptcy supervision after the effective date in the Confirmation OrderDkt. 474. The confirmed plan provides for full payment of administrative and priority claims and about a 28% recovery to unsecured creditors over four years.
The current problem is execution. The plan became effective in July 2025, but the debtor reported that lower-than-projected census, a Q3 2025 EBITDA miss, delayed Medicare reimbursement during the federal government shutdown, and delayed Medicaid-rate approval disrupted the initial payment cadence. By April 2026, professional fees had only recently been brought largely current, debtor’s counsel still had a post-effective-date receivable, and the first unsecured-creditor installment due at year-end 2025 had not been made. The debtor’s proposed cure path is to bring professional fees current and make the first unsecured-creditor installment by June 30, 2026, with full plan implementation pushed to December 31, 2029, as described in the .
