Barlett, IL-based continuing care retirement community Clare Oaks Senior Living has emerged from bankruptcy equipped with a new board of directors and management firm. Earlier this year, previously contentious negotiations between the CCRC’s creditors’ committee and bondholders had threatened the finances of the community’s residents.
The 12-year-old CCRC will now be managed by Abilene, TX-based ER Senior Management IL LLC, according to Julir Boggess, chair of the organization’s new board of directors. She said Clare Oaks officially emerged from bankruptcy on Nov. 6.
“The goal of this rigorous process was to reduce the burden of unrealistic long-term debt, an all-too-common phenomenon among CCRCs opened earlier this century, and to infuse fresh capital for a series of improvements,” Boggess said in a statement.
Through the bankruptcy process, Clare Oaks’ bondholders reduced Clare Oaks’ debt by $40 million, to $46 million from $86 million. The lead bondholders, Lapis Advisors and Amundi Pioneer, also committed $5 million for capital improvements to be completed this year.
The new board of Clare Oaks, which retains its not-for-profit status, also approved the hiring of ER Senior Management to oversee all operations, sales and marketing as well as capital improvements, according to Boggess.
“We are confident that the leadership of ER Senior Management co-founders Chris Coates and Brian Dowd will ensure a smooth transition as we work with our new onsite management to maintain and improve Clare Oaks’ history of gracious, secure living,” she said. Coates, former chair of both the American Senior Housing Association and the Assisted Living Federation of America (now known as Argentum), has spent 45 years in the seniors housing field, whereas Dowd has more than 25 years of experience in asset management in the fields of seniors housing and commercial real estate.
Clare Oaks also announced its new executive director, Tim Lynch, who previously oversaw ER Senior Management’s CCRC in Amarillo, TX.
Dowd noted that the $5 million in capital infusion will go toward improvements enabling Clare Oaks to better respond to changes in the senior housing market, with a portion of that amount being reserved for deferred management costs. Almost $3 million will be used to convert existing skilled nursing care rooms into 32 assisted living residences. These additions will boost Clare Oaks’ number of such apartments from 17 to 49. Other improvements include opening up and refreshing the main entrance and remodeling the area outside the dining hall to repurpose it from a rarely used bar to a casual-dining bistro and social hub.
“We look forward to serving Clare Oaks and the greater Chicago area in the new year,” Coates said.