Alterra Healthcare creditors file motion to appoint trustee

By Carlise Newman

Chicago, July 7 - Alterra Healthcare Corp. said its unsecured creditors filed a motion to appoint a Chapter 11 trustee in its bankruptcy case, alleging that the current sale process is inadequate and claiming the trustee would review alternative restructuring proposals to determine the best restructuring plan. Management of Alterra said in a news release that the motion to appoint a trustee is without merit and ignores fundamental facts in the bankruptcy case. The company intends to oppose the motion and does not expect it to interfere with the plans to complete its restructuring in the second half of 2003.

"We commenced a comprehensive open-market process in March 2003 designed to raise equity capital to facilitate Alterra's emergence from bankruptcy as a stable and viable company," said Mark Ohlendorf, president of Alterra, in the news release.

"This process is being conducted in accordance with bidding procedures approved by the Bankruptcy Court and consented to by the creditors committee. With the active participation of the creditors committee, this process has been designed to solicit and identify the highest and best proposal for a transaction to address the capital and liquidity needs of Alterra as we emerge from Chapter 11.

"Furthermore, while we will continue to consider input offered by our Creditors Committee in completing our restructuring, we must focus on the interests of all creditors and stakeholders in the company, including our senior capital structure constituents, our residents and their families, our vendors and our employees," noted Ohlendorf.

A hearing on the creditors committee's motion is scheduled for August 6. As previously announced, an auction for an exit equity investment transaction will be held on July 17, and a hearing to approve the successful highest and best bid is scheduled for July 23.

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