Erickson Retirement Communities, the national chain of campus-style senior living facilities, emerged from bankruptcy Friday less than six months after filing the Chapter 11 case, attorneys said.
Catonsville-based Erickson is being sold to Redwood Capital Investments LLC, a Baltimore-based investment firm, for $365 million. The sale — expected to close by the end of the month — and a post-bankruptcy reorganization plan have been approved by a federal bankruptcy court in Texas, attorneys for Erickson and affiliated debtors announced.
The attorneys from DLA Piper said the company was able to stabilize operations and secure financing. Erickson operates 20 retirement communities of more than 23,000 residents in 11 states. Erickson Retirement said in a statement that residents' entrance deposits "will remain refundable" under the terms of their care agreements.
"We were in and out in less than six months, which I think is amazing," said Tom Califano, vice chair of DLA Piper's restructuring practice. "It was very, very complicated — very complicated capital structure, a lot of moving parts, a lot of people's interests were impacted. And everybody worked together. Everybody behaved very reasonably."
Erickson's real estate arm was hurt by the recession as seniors who couldn't sell existing homes put off moving to continuing-care communities. Last year the company blamed the deepening recession for layoffs, mostly at its corporate headquarters.
John C. Erickson, the company's founder, had planned to step down as chairman after it exited bankruptcy. He and five top managers, including the chief executive and chief financial officer and Erickson's two sons, were to be replaced by a team chosen by Redwood. Under the new management, John Erickson was to become an adviser.
John Cusack, vice chair of DLA Piper's finance practice, said Erickson has the financing to purchase and develop new senior living facilities, giving it an advantage over competitors. "Erickson under Redwood Capital's ownership will find itself in a unique position to grow," Cusack said in a statement.