Sara L. Chenetz

LOS ANGELES - Sara L. Chenetz works with financially healthy and troubled companies in a broad range of industries. She guides clients through restructurings, workouts and litigation, both in and out of court proceedings. She also represents trustees, receivers and court-appointed fiduciaries for creditors and equity holders. Chenetz represents the official committee of unsecured creditors in the California-Nevada Methodist Homes Chapter 11 bankruptcy. California- Nevada Methodist Homes, No. 21- 40363 (Bankr. N.D. Cal, filed March 16, 2021). CNMH operates two continuing care retirement communities in the Bay Area. The pandemic exacerbated ongoing financial challenges and the nonprofit filed for bankruptcy last March. "The case started about a year into the pandemic, so it was a difficult time to keep an enterprise like this, a nonprofit, going in the ordinary course," she said. "There was a lot to balance just to maintain what seems like the status quo for residents and try to have a smooth transition." Chenetz guides the committee's efforts to maximize value for all unsecured creditors, including residents, children of former residents and vendors. She has worked closely with secured creditors and a California state agency to find the right buyer and structure a deal. "The bankruptcy has involved primarily selling the assets so that from the point of view of residents, there would be continuity of care, and a resumption of payment of the entrance fee refund, which had been frozen in the bankruptcy," she said. Most continuing care retirement communities require an entry fee, which can run into the hundreds of thousands of dollars and is usually partially refundable to the resident or resident's heirs. Earlier this year, the bankruptcy court approved the sale of CNMH to Pacifica Companies LLC. The bankruptcy is awaiting state regulatory approval. Corporate bankruptcies tend to be cyclical and Chenetz said she is currently handling few matters in court. "Some of that is reflective of the current economic conditions, though things may be starting to change," she said. "In the last pandemic period, a series of industries, like restaurants, retail and movie theaters, struggled, but a lot of those filed for bankruptcy or addressed their problems in 2020. Since then, things have kind of stabilized for most businesses." Consequently, she has spent more of her time advising financially healthy companies on issues such as how to structure contracts and business deals to minimize risk in the event that the other side runs into financial problems. More and more companies are "planning for the 'what if,'" she said.