Senior care operator, mired in bankruptcy, reaches $18.4M settlement with allegedly faulty contractor

Share this content:

A Texas nursing home operator mired in bankruptcy has scored a big victory in court against an alleged faulty contractor.

Eden Home Inc. — which runs the New Braunfels continuing care retirement community in New Braunfels, TX, with 184 nursing home beds — reached the settlement earlier this week, the San Antonio Express News reported. The company had previously filed for Chapter 11 in March, with it defaulting on some $52.6 million in bonds that it used to bankroll an expansion.

At the time, CEO Laurence Dahl blamed construction defects and delays on the company's financials struggles according to the newspaper.

The construction company in question, JE Dunn, was to complete renovations to include 103 apartments and a health center. However, prior to completion, Eden Home said it began noticing “substantial defects,” leading to delays in openings and escalating costs.

JE Dunn sued Eden Home in 2015, alleging breach of contract, fraud and unjust enrichment. The operator, meanwhile, countersued, according to the Express News.

The New Braunfels community and Eden announced this week they'd reached a $18.4 million settlement with the contractors. They'll use some $5.6 million of those proceeds for working capital to repair the facility. In the absence of those funds, the company “does not have and will not have the liquidity to satisfy its operational obligations,” the paper reported.