Erickson files for Chapter 11; company to be sold
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Erickson Retirement Communities, a Maryland-based developer of continuing care retirement communities, filed for bankruptcy in October with a plan to sell the company for an undisclosed price.
To complete the sale to investment firm Redwood Capital Investments LLC, Erickson had to file a voluntary petition for Chapter 11 bankruptcy to restructure its more than $1 billion in debt.
Erickson, which has 23,000 residents nationwide, cited the economic crisis for its financial woes when disclosing that the company has held discussions with its lenders in recent months to restructure its debt. However, despite “good faith negotiations” with creditors, Erickson was unable to reach an out-of-court agreement.
Bruce R. Grindrod Jr., Erickson’s president and CEO, said these recent developments wouldn’t change anything for residents or jeopardize their refundable entrance fee deposits, which can top $400,000, the Baltimore Sun reported.
Described as Erickson’s “two core businesses,” the company’s management arm, which provides services for community residents, continues to operate; and its real estate development arm, which acquires land for future campus growth, has been significantly impacted by the recession. According to the company, the bankruptcy allows Erickson to reorganize these two businesses into “separate yet commonly owned legal and financial entities.”
Erickson, which has 23,000 residents nationwide, cited the economic crisis for its financial woes.
The restructuring of debt, sale of the company, and ongoing market process all require court approval. Erickson expects the transaction to be approved and consummated in the first quarter of 2010.
Letter to the Editor
OPTIMA winner an ‘inspiration’
Congratulations to Kim Moody, Cindy Godfrey, and staff on receiving the 2009 OPTIMA Award!
I just finished reading the article in September’s Long-Term Living (“24-hour dining a ‘jump off the cliff’ moment for Rolling Fields”) and was very touched by your insight and dedication to better serving elders. The 24-hour dining was definitely a “JUMP,” but is an excellent example of the Eden Concept of “open your heart and the mind will follow.” It makes me proud to know that there are others out there who are working diligently to improve quality of care for our elders. One of our LTC facilities here in Tulsa has switched to using everyday dishes instead of institutional (meals) and even that small change has boosted elder morale, so I can just imagine the response to your changes. Thank you for your inspiration!
Gold Medallion Senior Housing and Health Care
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Long-Term Living 2009 November;58(11):8