Due to a breakdown in efforts to negotiate a more sustainable loan agreement with two foreign banks, Capitol Lakes voluntarily filed for protection and reorganization under Chapter 11 of the U.S. Bankruptcy Code. Services for residents will not be interrupted and operations will continue as usual.
CAPITOL LAKES, INC. TO UNDERGO FINANCIAL REORGANIZATION
Premier retirement community’s services for residents to continue as usual
Madison, WI – January 21, 2016 – Citing a breakdown in efforts to negotiate a more sustainable loan agreement with two foreign banks, Capitol Lakes, Inc., the premier continuing care retirement community in Madison, today voluntarily filed for protection and reorganization under Chapter 11 of the U.S. Bankruptcy Code. The case was filed in U.S. Bankruptcy Court for the Western District of Wisconsin and will be heard by Judge Robert Martin.
Day-to-day operations – including dining and transportation services, care and support activities, and nursing and wellness programs – are planned to continue as usual during the reorganization process.
“After many months of good-faith negotiations with our lenders and careful deliberations with our financial and legal advisors, our board of directors reached the conclusion that the interests of our residents and those of Capitol Lakes are best served by seeking a financial reorganization under court protection,” said Tim Conroy, executive director of Capitol Lakes. “Doing so will provide us with the additional time and resources required to put in place a workable, long-term financing plan that will sustain Capitol Lakes’ financial viability.”
Conroy said Capitol Lakes had been prepared to move forward with a refinancing proposal until mid-December, when its lenders imposed additional conditions it found unfeasible and unacceptable. The decision to seek financial reorganization quickly followed.
“I want to assure our residents and their families that our goal is for Capitol Lakes to emerge from this process as quickly as possible as a financially healthy entity with the long-term ability to provide the quality amenities and services to which they are accustomed,” he added. “In the meantime, we expect it to be business as usual for our residents and employees. Our residents are our highest priority, and based on results in similar cases we are highly confident that their interests will not be negatively impacted.”
Serving seniors since 1975, Capitol Lakes serves more than 300 residents through its 285 independent living, assisted living, memory care and skilled nursing/rehabilitation units on a four-building campus in downtown Madison. Recent investments to make Capitol Lakes Madison’s premier retirement community have resulted in operational improvements, efficiencies and 95 percent occupancy.
“Unfortunately, the lingering effects of the national financial crisis and housing crash of 2008 left us in an unsustainable debt position, and we have been working hard to recover ever since,” said Conroy. “Nevertheless, even though Capitol Lakes is current on its obligations and completely stable in its day-to-day operations, our long-term financial viability would be in jeopardy without this action.”
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About Capitol Lakes
Capitol Lakes is an accredited, not-for-profit Continuing Care Retirement Community (CCRC) and an affiliate of trusted national leader Pacific Retirement Services, Inc. It is also the only retirement community located in the heart of downtown Madison, two blocks from Capitol Square. Stylish and progressive, Capitol Lakes offers an array of spacious residential styles, fine amenities, and sociable activities in a vibrant and actively involved lifestyle designed for healthy aging.
Contact: Tim Conroy, Executive Director
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