Clare Oaks bondholders’ plan statement approved; plan hearing Sept. 29

By Caroline Salls

Pittsburgh, Aug. 21 – Clare Oaks has reached an agreement with its majority bondholders on a consensual restructuring plan for its Chapter 11 case, according to a bondholder news release.

The bondholders said the U.S. Bankruptcy Court for the Northern District of Illinois approved the disclosure statement and ruled that the reorganization plan may move forward to a vote of Clare Oaks residents and other creditors.

The release said bondholders Lapis Advisers, LP and Amundi Pioneer Asset Management, Inc. negotiated an agreement with Clare Oaks and the official committee of unsecured creditors that provides residents of the Clare Oaks community with financial stability and security for the future, including new physical plant upgrades to the community and other benefits.

Under the agreement, the community will be managed by ER Senior Management, LLC.

In addition, the bondholders’ plan includes an additional $5 million investment in Clare Oaks to transform a portion of the skilled nursing units to in-demand assisted living units, as well as to address deferred capital improvements and operating liquidity.

General unsecured creditors will receive a portion of a $150,000 payment, representing a distribution of 16% to 24% to those creditors.

“We are very pleased that the judge allowed our proposed restructuring plan that brings in new management and provides a stronger future for Clare Oaks to move forward to a vote of the creditors,” Lapis Advisers’ Kjerstin Hatch said in the release.

The creditors have until Sept. 21 to vote on the reorganization plan. The plan confirmation hearing is scheduled for Sept. 29.

On Wednesday, Clare Oaks’ official committee of unsecured creditors withdrew the Chapter 11 plan it filed for the company’s bankruptcy case on July 13.

In a separate filing, the proponents of the company’s bondholders’ plan said the committee and Clare Oaks now both support their plan after objecting to a previous version of that plan.

Clare Oaks is a Bartlett, Ill.-based senior living facility. It filed bankruptcy on June 11, 2019 under Chapter 11 case number 19-16708.

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