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Bankruptcy court approves Clare Oaks plan sponsors proposed changes
By Lisa Kerner
Charlotte, N.C., Dec. 20 - Clare Oaks plan of reorganization sponsors Wells Fargo Bank, NA and Sovereign Bank, NA won approval of their request to make "non-material" post-confirmation changes to the third amended Clare Oaks plan, according to a Thursday filing with the U.S. Bankruptcy Court for the Northern District of Illinois.
As previously reported, the plan sponsors said the Illinois Finance Authority had informed them that the establishment of an additional $3 million liquidity support facility for the company's working capital needs would be required for it to issue series 2012 bonds in accordance with the plan.
The authority also requires an agreement that the initial selection of two independent class B directors be acceptable to both the plan sponsors and the authority as the bond issuer.
According to the sponsors, the additional liquidity support would serve as a backstop to several reserves already established under the plan.
Under the proposed plan changes, a $1 million fund will be established from savings and write-offs from various professionals for fees and expenses incurred during the Chapter 11 case. Additionally, a $2 million fund will be established from the proceeds of new series 2012A-LS taxable bonds, which will mature in five years and bear interest at 7%.
The proposed changes should allow the series 2012 bonds to be issued on Dec. 28 and the plan to take effect by Dec. 31, which is the expiration date of Clare Oaks' exit financing commitment and its debtor-in-possession financing, the plan sponsors said.
The authority's board is expected to hold a special meeting on Dec. 20 to vote on the bond issuance.
Bartlett, Ill.-based Clare Oaks operates a continuing-care retirement community. The company filed for bankruptcy on Dec. 5, 2011. The Chapter 11 case number is 11-48903.
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