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Clare Oaks plan proponents seek confirmation on exclusivity expiration
By Caroline Salls
Pittsburgh, Aug. 24 - Clare Oaks master trustee and bond trustee Wells Fargo Bank, NA and letter-of-credit issuer and bondholder Sovereign Bank are asking the U.S. Bankruptcy Court for the Northern District of Illinois to confirm that the company's Chapter 11 plan vote solicitation exclusivity has expired, according to a Thursday court filing.
If the exclusive period has not been terminated, Wells Fargo and Sovereign are asking the court to terminate it.
As previously reported, Wells Fargo and Sovereign filed a plan of reorganization for Clare Oaks' bankruptcy case on Aug. 9.
According to the motion, Clare Oaks' exclusive period to file a plan expired on July 2 and the company did not file a plan by that time.
As a result, Wells Fargo and Sovereign said they are requesting confirmation from the court that the exclusive solicitation period has also expired because no plan was filed by the deadline.
The creditors said their plan "is far superior to anything proposed by the debtor."
"The only alternative to the creditors' plan that has been alluded to has been a sale transaction at a stated purchase price of $16 million for substantially all of the debtor's assets," Wells Fargo and Sovereign said in the motion.
In comparison, the creditors said their plan proposes a total return to secured creditors in excess of $75 million and a return to unsecured creditors.
"Such disparity between recoveries weighs heavily in favor of the creditors' plan and is reason to terminate the exclusive solicitation period to allow creditors to consider and vote upon the creditors' plan," the motion said.
A hearing is scheduled for Aug. 28.
Bartlett, Ill.-based Clare Oaks operates a continuing-care retirement community. The company filed for bankruptcy on Dec. 5 under Chapter 11 case number 11-48903.
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