Sunwest Management Reorganization Information

Welcome to our special reorganization section of the Sunwest Management website.

As the manager of senior living communities across the country, we at Sunwest Management would like to share some important information with you about our business situation.

The restructuring of Sunwest Management has proceeded rapidly during the summer and achieved several important goals.

Operationally, Sunwest shows renewed vigor and increasingly strong performance in its most important realm: providing quality care to residents. Court protection from lenders has granted the breathing room needed to focus on operations, and company initiatives to improve management quality, systems, and accountability are beginning to bear fruit.

Indicators of positive performance include:

• In a time of declining occupancy among many senior living providers, Sunwest finished July with positive net census growth for the third consecutive month.
• June ‘09 revenue was up +4.6% over June ’08, and net operating income rose even more, by +10.7%.
• Second quarter financial results were in line with June, with revenue up +4.4% and NOI up +10.1%.
• Sunwest is paying over 99% of its trade payables within vendor terms.
• At the end of July, Sunwest had collected 98.6% of the month’s current rent due (63 communities were at 100%).

In direct response to a random employee opinion survey conducted this spring, Sunwest is launching an operational improvement project in four key areas:

• Resident satisfaction;
• Property maintenance and capital improvements;
• Employee satisfaction; and
• Operations management and communications.

Employees at all levels of the company will be involved in leading and completing each of the projects.

 

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Previous Update Info:

The housing crisis and contraction of credit in the U.S. is affecting senior living providers along with other participants in the real estate sector. Sunwest Management has been experiencing financial difficulties for several months. The company has a lot of work to do to restructure its balance sheet and improve its ability to pay debts to lenders, vendors, and investors. That work has been underway for several months and continues now under the leadership of our new Chief Restructuring Officer, who has significant experience and an excellent track record in these kinds of situations.

Throughout this process, our residents remain our top priority and the focus of our efforts to provide continuity of care. While the home-office team addresses the company's financial challenges, individual communities will continue to operate normally. Residents should experience no disruption in the care, activities, and routines they have come to expect. We do not expect closures in our communities, nor do we expect curtailment of services and staffing.

Sunwest Management has not filed for protection under the U.S. Bankruptcy Code. However, some of the communities managed by Sunwest are currently under the protection of Chapter 11 to stabilize their operations and services during the restructuring process.

Chapter 11 means reorganization, not liquidation. In some cases, Chapter 11 protection is a community's best option to serve the interests of residents, employees, and other key constituents. Unlike Chapter 7, which is used for liquidations, Chapter 11 helps a business stay open while resolving its financial challenges. Sunwest's Chapter 11 communities continue to operate just like all the others.

If your community is among those we have placed under Chapter 11, you will receive additional information explaining the reorganization process and why it will not affect the care and services you receive.

In the meantime, you have our commitment that we will update you throughout Sunwest Management's restructuring process.