On Wednesday, December 23rd, 2009 after an 18 hour auction, Erickson Communities chose Maryland based Redwood Capital Investments LLC to pull itself out of bankruptcy, of which it filed for Chapter 11 protection in October.
Redwood successfully outbid a New York company, Kohlberg, Kravis Roberts & Co. to get Erickson’s assets, including the non-profit groups Erickson operates.
Erickson says that the Chapter 11 bankruptcy protection filing nor its sale will affect its residents such as those in Erickson’s Oak Crest Community in Parkville and Charlestown Community located in Catonsville, both in Baltimore County. Refundable deposits and living arrangements will remain the same for those currently living in those communities.
It is a great thing that Erickson is able to keep this sale within Maryland, as our state has had a recent number of large companies being bought or headquarters moved out of state, like Towson based Black & Decker ‘s buy out by Stanley Works in Connecticut.
Erickson began to have trouble when the real estate market began to drop after 2005’s boom. The large refundable deposits new residents put down (up to around $400,000) were usually paid from proceeds of the new resident’s sale of their prior home. With homes not selling for the amount needed for the downpayment, less people were moving into the retirement communities.
Fore more details on the Erickson Communities sale, read Baltimore Sun reporter Jamie Hopkins Smith’s article.
This is great news for Erickson Communities, their residents in Parkville’s Oak Crest and Catonsville’s Charlestown, Redwood Capital, and especially the State of Maryland!