A federal judge has ordered the creditors’ committee and bondholders of Barlett, IL-based continuing care retirement community Clare Oaks Senior Living to simplify their conflicting bankruptcy plan proposals so residents can better understand their options, the Daily Herald reported Wednesday.
Judge Donald R. Cassling ordered both parties during a U.S. bankruptcy court hearing Tuesday to work together on resolving the impasse. He also scheduled a hearing on the new proposals for July 28.
In May, the CCRC’s bondholders, West Coast distressed debt investor Lapis Advisors, and Boston-based Amundi Pioneer Management, proposed a bankruptcy reorganization plan that would delay resident entrance fee repayments until after a new resident had occupied the vacated unit and provided Clare Oaks with a new deposit. The proposal drew criticism for putting residents in danger of losing their life savings and led to a counterproposal from the Clare Oaks’ Committee of Unsecured Creditors.
The creditors’ plan honors the debtor’s commitments to its residents and families by assuming all residency agreements without modifications and paying all entrance fee refunds owed to current and former residents in full. The bondholders have criticized the creditors’ plan as unworkable.
“I believe concrete hard facts are much more persuasive than fiery rhetoric,” Cassling said during the hearing. He added that he would not let either side’s proposal proceed in its current form.