Description

On Monday, Erickson Retirement Communities, LLC and approximately 15 affiliates voluntarily filed for chapter 11 bankruptcy protection in Dallas. The companies are "part of a fully-integrated, privately-owned development and management company that focuses on providing affordable, high-quality senior living for middle-income seniors." As of the bankruptcy filing, the companies manage 20 continuing care retirement communities in 11 states. Collectively, those communities have approximately 23,000 residents.


Of the 20 developments, eight are completed and, with two exceptions, have been sold to not-for-profit entities supported by National Senior Campuses, Inc. (also a not-for-profit entity). The not-for-profit entities that own the campuses then contract with Erickson to provide for the management of the communities. Of the remaining 12 communities, 11 are still under development but are open and operating and the remaining community is under development but not open.


Erickson blamed yesterday's bankruptcy filings on a number of factors including a significant decline in the senior housing market over the last year, the inability of the company to secure bond financing for its developments, and its inability to negotiate further forebearance agreements under its corporate revolving credit facility. The bankruptcy is intended to be used to complete a sale of substantially all of the companies' assets and Erickson has entered into a stalking horse asset purchase agreement with Redwood Capital Investments, LLC.


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