U.S. District Court Judge Michael Hogan confirmed Tuesday the plan of reorganization in the Chapter 11 proceedings of Stayton SW Assisted Living, an Oregon-based senior living provider formerly known as Sunwest Management. The plan provides for the sale of up to 149 senior living facilities to a joint venture formed by Blackstone Real Estate Advisors VI L.P., Emeritus Senior Living and Columbia Pacific Advisors. The Blackstone / Emeritus joint venture will acquire the properties in exchange for cash, securities and debt valued at $1.3 billion in cash. As part of the ruling, the court stated that the plan outlined was feasible and would maximize value for the creditors and investors of the bankruptcy estate. Existing Sunwest investors are permitted to receive either cash or securities in the new company, with a choice between Class A preferred interests paying six percent, or up to 49 percent in common interests in the joint venture according to a news release by Hamstreet Advisors.
“I’m very pleased,” said chief restructuring officer Clyde Hamstreet. “Our team has been working day and night to finalize loan modification agreements with secured lenders. They did an outstanding job to reach the point where nearly all secured lenders support the plan. Now, we can focus our attention on closing the Blackstone transaction. Over the next two weeks we will finalize the outstanding loan documents, complete preparations for the real estate and licensing transfers, and determine which claimants have chosen to invest in the new company through the Sunwest rollover member. We intend to be ready for closing by August 1.”
The approve plan also calls for the creation of an entity to hold certain non-senior living assets, such as apartments, office buildings and bare land. Receiver Michael Grassmueck will oversee the entity and liquidate its assets over time for the benefit of the estate’s investors and creditors. Properties that are not sold to the Blackstone / Emeritus joint venture or transferred into the entity will be returned to lenders after the effective date of the plan, which will coincide with closing of the Blackstone transaction.