Certain funds managed by Lapis Advisers and Amundi Pioneer Asset Management filed a Chapter 11 plan of reorganization in the U.S. Bankruptcy Court for the Northern District of Illinois, Eastern Division to restructure the Clare Oaks retirement community. Clare Oaks filed for bankruptcy in 2019, making this the second time the community has taken such an action.
Lapis and Amundi Pioneer laid out their restructuring plan for the continued operation of Clare Oaks with minimal disruption to residents. According to court documents, the restructuring plan “repositions Clare Oaks on a solid path of financial stability and future growth” and according to the majority bondholders, is the only feasible plan that can accomplish that goal.
Highlights of the the restructuring plan include:
- Investment of $5 million for capital improvements to the community, including the healthcare center
- Onboarding professional management with a proven record of success operating similar communities
- Restructuring bondholders’ secure debt by reducing the principal amount by more than $32 million
- Substantially eliminating the current “queue based” entrance fee refund contract for the “unit sale” entrance fee contract
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The additional funds will be used for additional improvements at Clare Oaks. They will also help to convert half of Clare Oaks’ underutilized skilled nursing beds into assisted living units. The plan will bring in an independent professional management company. The chosen firm will have experience acquiring and managing financially challenged senior living communities such as Clare Oaks.
“We are excited to bring about a successful management change for Clare Oaks and its residents. We believe in this non-profit community and intend to invest substantial additional funds,” Kjerstin Hatch, a principal with Lapis Advisers, said. “We are disappointed that current management has chosen to put forth misleading and inflammatory statements with regards to our restructuring plan and encourage all constituents to read our disclosure statement and plan once it has been approved by the judge for dissemination.”
The restructuring plan also proposes one modification to the residency agreement for consenting independent living residents. It will guarantee that when an independent living resident leaves a unit, even if they stay at the community through a higher level of care, they will receive their refund once a new resident pays an entrance fee and occupies that unit.







