Bartlett retirement community settling contentious bankruptcy
Updated Aug. 21 to add comment from bondholders
The previously warring parties in bankruptcy proceedings for Clare Oaks Senior Living in Bartlett have negotiated a settlement that should protect the interests of current residents and the marketability of the retirement community for new ones, its CEO says.
All the parties involved - including residents - still need to vote on the negotiated agreement by Sept. 21, before a scheduled confirmation hearing before a federal judge Sept. 29.
Clare Oaks CEO Gigi Walker is confident that bondholders are abandoning their previous direction that would have threatened residents' deposits by selling the community to a third party and making everyone there a renter.
"We did come to an agreed-upon settlement," Walker said. "Because everybody agrees, it's pretty likely to be confirmed. I believe Clare Oaks is in a place that it can move forward."
And that means Walker is moving on, with Orland Park-based management firm Evergreen Senior Living coming in and replacing her with an executive director. That's just fine by Walker, who said she's pleased with the outcome for everyone else.
"It was mutual," she said. "I was ready to go."
At the most recent court hearing Wednesday, Judge Donald R. Cassling approved a revised disclosure statement agreed to by the creditors' committee and bondholders. It explains the choices and potential consequences to residents - a change from the previous version's spelling out of the two sides' once-adversarial positions.
"It does what a disclosure statement is supposed to do," Cassling said of the new version. "My thanks to all of you for cooperating."
According to the bondholders, the revised plan includes an additional $5 million investment to turn a portion of the skilled nursing units into in-demand assisted living units and address deferred capital improvements.
"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," Kjerstin Hatch of Lapis Advisers said in a written statement on behalf of the bondholders.
"The true beneficiaries here are the residents living in Clare Oaks and who will continue to receive all the excellent service and benefits of the Clare Oaks' continum of care," EE Senior Management Principal and COO Brian Dowd also wrote in the statement.