Clare Oaks, committee withdraw motion for confirmation enforcement

By Sarah Lizee

Olympia, Wash., Oct. 27 – Clare Oaks and the official committee of unsecured creditors withdrew a motion submitted last week seeking enforcement of the confirmation of the Chapter 11 plan of reorganization filed by its majority bondholders, according to a notice filed Monday in the U.S. Bankruptcy Court for the Northern District of Illinois.

The group said the issues raised in the motion have now been resolved to the satisfaction of the debtor and committee.

As previously reported, on Oct. 13 the Illinois Finance Authority approved the bond reissuance proposed under the plan and the debtor has been preparing to close on the bond issuance and have the plan go effective on or before Nov. 1, the motion said.

However, the debtor and committee said they were informed by counsel to the trustee on Oct. 16 that the plan sponsors reached an impasse in finalizing the 2020 bond documents that jeopardizes the parties’ ability to close the restructuring transaction and timely effectuate the plan, thereby threatening the future of Clare Oaks.

Specifically, the debtor and committee said they have learned that plan sponsor Amundi Pioneer Asset Management, Inc. seeks to add a material no-call provision for a period of 10 years to the 2020 bond documents despite the absence of that provision in the restructuring term sheet.

The debtor and committee also learned that the other plan sponsor, Lapis Advisers, LP, opposes the addition of a no-call provision into the 2020 bond documents.

“Because the plan and the restructuring term sheet, which is binding on the parties, did not contemplate a no-call provision in the 2020 bond documents, Pioneer should be directed to close the restructuring transaction as contemplated by the plan and the restructuring term sheet as soon as all other conditions to effectiveness have been met,” the motion said.

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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