Sunwest Management agrees to sell 148 senior properties to Blackstone

By Caroline Salls

Pittsburgh, Sept. 15 - Sunwest Management and Blackstone Real Estate Advisors have reached agreement on the terms of the sale of up to 148 senior living properties controlled and managed by Sunwest, according to a company news release.

"This is a very positive development and I am pleased that the investors may have a chance to obtain cash fairly quickly," Sunwest receiver Michael Grassmueck said in the release.

"This transaction, if concluded, combined with other sources of recovery, will make a very meaningful distribution to investors and creditors in this case."

Under the preliminary agreement between Blackstone and Sunwest, Sunwest would proceed with a plan of distribution currently pending before the U.S. District Court in Eugene, Ore., in connection with a lawsuit filed last March by the Securities and Exchange Commission.

Sunwest said the court will consider the receivership plan at the end of this month, and, if it approves that plan, the court would subsequently consider the Blackstone transaction in conjunction with a Sunwest Chapter 11 reorganization toward the end of this year.

In making its offer, the company said Blackstone is partnering with Emeritus Senior Living and Columbia Pacific Management, Inc., an entity controlled by Emeritus chairman and co-chief executive officer Dan Baty.

Under the terms of the proposal, Emeritus would be appointed as manager of the newly acquired facilities once the transaction is complete.

Emeritus will also have the option to invest up to 10% of the equity in the joint venture entity along with Blackstone and Columbia Pacific.

According to the release, the offer depends on the continuation of the restructuring that is in progress under the leadership of chief restructuring officer Clyde Hamstreet and federal receiver Michael Grassmueck, who was appointed last March after the SEC filed its lawsuit.

If approved by the court, the transaction would close at the time the Sunwest Chapter 11 plan becomes effective.

Sunwest said distribution and draft reorganization plans filed with the court in August will be revised to allow for a transaction of this nature to occur.

At the same time, Sunwest's receiver and CRO are proceeding with a stand-alone restructuring in case a sale transaction does not occur.

Both the distribution plan and the sale transaction must be approved by the U.S. District Court in Eugene, Ore., where the SEC case is being heard.

Sunwest is a Portland, Ore.-based senior living provider.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.