PORTLAND (AP) — Some investors in Sunwest Management, one of Oregon’s largest bankruptcy cases during the financial crisis, have learned they’ll get nearly all of their money back. Some may even get a return on their investments.
A $1.7 billion sale of Sunwest assisted-living centers plucked from bankruptcy proceedings is responsible for the good news, The Oregonian reported Wednesday.
It means those who took a stake in a new venture rather than a cash payment in 2010 will get all of their original investment back, and some will even clear a small profit, said Bill Bryan, who heads an investor group. That covers about 500 out of 1,200 investors.
Salem-based Sunwest grew into one of the nation’s largest assisted-living center operators before collapsing in 2008.
The case resulted in allegations of fraud and a complex bankruptcy. Last month, a federal grand jury indicted Sunwest Chief Executive Jon Harder on 56 counts of fraud and money laundering.
Last week, though, a federal judge rejected the U.S. Securities and Exchange Commission’s request for $180 million in civil penalties against Sunwest executives, citing Harder’s cooperation in recovering investor money.
In 2010, when a real estate investment fund owned by Blackstone Group offered $1.3 billion in cash and assumed debt for 144 Sunwest assisted-living centers. Seattle-based Emeritus Corp., the nation’s largest assisted-living center operator, agreed to run the centers for Blackstone, an internationally known venture capital firm.
At the time, Sunwest’s 1,200 investors had a choice: cash out now or take shares in Blackstone’s new entity, or a combination of the two.
More than 700 took the cash. Ultimately, they stand to get back 60 percent of their original investment.
In the deal announced Tuesday, California-based HCP Inc. will acquire 133 of the former Sunwest centers. Emeritus will operate them, net $144 million in proceeds and own nine other centers outright.