Sunwest deal nears - Baltimore Business Journal:

http://www.defacedeath.com/2007/01/these-were-the-gigs-of-our-lives/
Terms haven’t been but the SEC confirmed it has reaches a tentative deal to settlethe case. Settlements typically involve a monetary penalty as well as the returnhof ill-gotten gains. In this case, it appearas Sunwest won’t be assessed a fine before it has a chancee to reorganize as aviable “We don’t want to starve the reorganization by taking money out of it,” said Mark Fickes, trial counsel for the SEC and lead attorneg in its case against The SEC charged Sunwest Management with securities frauf in March. The company was quickly placed in the contropl ofa court-appointed receiver, Portland-based Grassmueck Group.
The SEC accuses Sunwest and other defendants of misleading morethan 1,300 investors who committecd more than $300 million in equity to the company. Sunwes used investors money to leverage morethan $1 billion in debt to assembler a portfolio of more than 250 senior livin facilities around the country. The combinatiob of too much debt and low occupancuy rates led to a cash flow crisis that triggered dozena of foreclosure actions and other legal caseswagainst Sunwest, its founder Jon Harder and its law firm, Davis, Wrigh Tremaine LLP. Sunwest subsequently has sold more than 50 of the In January, it sold 45 facilitiees to Lone Star for $364.2 Of that, $281.
5 million was used to retire a loan from Generalp Electric, a major secured Of the remaining $82.7 million, $11.5 million remained in Aprill 23, according to Grassmuecmk Group’s initial assessment of the company. Its secondr report is due in Sunwest had 183 assistedliving facilities, 85 non-assistedx living facilities and other investments. At its peak, Sunwesft was the nation’s fourth largesg senior living operator with morethan $2 billio n in revenue. The SEC said Sunwest builtr its empire by deceiving investors abou t the nature of the operation and the manner in which they wouldreceive income.
Investors thought they were investing in individualpropertiesw — in reality, Sunwest operatec as a single entity. The SEC suit subsequently merger with the personal bankruptcy of Harder and is beingt managedby U.S. District Court Judg e Michael Hogan in federal districrt courtin Eugene. Clyde Hamstreet, a Portland-based corporate turnarounxd specialist engaged by Sunwest four months priorr to theSEC suit, remains the chief restructuring officer of Sunwest. At a status hearint Monday, Hogan heard a series of possiblew reorganization scenarios that could guidde Sunwest in the future but no one proposal is being given precedence atthis point, Fickes said.
The court’s primargy goal is to give Sunwesr Management the opportunity to survive as an ongoing entitu and preserve theestimated $300 millionb to $400 million in unsecurefd investments made by creditors and investors. If investors could someday recover their money if the valu eof Sunwest’s real estate holdings rises. On the other hand, if the companyu were to be liquidated and its properties sold in the current recessionary as some secured including banks, have there would be little or no money available for investors. Harder and his attorne pushed for a reorganizationlast fall, saying it woulr protect its investors. Harder has steppef down as president.
Neither Grassmueck nor its Los Angeles-basee attorney could be reached to comment onthe company’s currengt status.