According to an article in the Star-Telegram, the Erickson Retirement Communities have filed for Chapter 11 bankruptcy and has agreed to be purchased by Redwood Capital Investments LLC.
The article said:
“Erickson spokesman Mel Tansill says the bankruptcy filing in Dallas and the agreement with Redwood took place on Monday. He says Erickson must restructure its debt to complete the sale. Tansill says Erickson will also reorganize by separating its management and real estate arms. The actions require court approval. Erickson expects approval in the first quarter of 2010.”
The Erickson Retirement homes serve 23,000 residents and they are expected to not see any changes in their services as a result of the bankruptcy. However, it is interesting to note the impact that the latest downturn will have on seniors as more senior housing developments feel the effects of the foreclosure crisis, credit crunch and the shockwave hitting retirement funds that have loss a lot of ground. Many seniors are forced to alter their retirement plans as their 401(k)s take a hit, property values plunge and/or they’re unable to sell their home in this environment. As a result retirement homes that expected to see an increase in enrollment are either experiencing sales that are flat-lining or even decreasing.