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November 20, 2009

Hearing on Erickson protections delayed till January

For all posts on Erickson's bankruptcy process, click here. You can also bookmark the link and check back for updates.

Looks like it'll be a few weeks before there is a decision on Erickson Retirement's request to increase protections for new residents. At the moment Erickson residents or their heirs get their entrance money (up to $600,000) back only after Erickson "sells" the unit to a new buyer. For communities still in development, Erickson wants to guarantee repayment to residents who buy in while the bankruptcy process is going on -- whether the unit is resold or not. The move is intended to reassure people who might think twice about buying into an uncompleted community whose developer is in bankruptcy proceedings.

To repeat: The new protections would apply only to developing communities, not the "mature" ones that are already built out, says Erickson spokesman Mel Tansill. Here is a list of mature campuses: Greenspring (VA); Charlestown, Riderwood and Oak Crest (MD); Henry Ford Village (MI); Seabrook (NJ); Brooksby Village (MA) and Cedar Crest (NJ). Presumably at these places the residency contracts don't change.

But at still-developing campuses, Erickson wants the bankruptcy judge's approval to upgrade the residency agreements until the bankruptcy case is resolved. There was a motion and a hearing this week. But it looks like creditors want to argue, and the hearing is now set for Wednesday, Jan. 13.

Here is the notice:

PLEASE TAKE NOTICE, that the hearings on the Objection of the Official Committee

of Unsecured Creditors to Debtors' Motion for an Order Authorizing Additional Protections to
Residents' Initial Entrance Deposits, and Motion, Pursuant to Bankruptcy Rule 9023, to Amend
and Modify Initial Order Authorizing Debtors to Escrow Initial Entrance Deposits [Docket No.

319] have been set for Wednesday, January 13, 2010, at 9:30 a.m. before the Honorable
Stacey G. C. Jernigan, Honorable Bankruptcy Judge, United States Courthouse, Earle Cabell
Building, 1100 Commerce Street, 14th Floor, Courtroom #1, Dallas, TX 74242.

Posted by Jay Hancock at 6:00 PM | | Comments (0)
Categories: Erickson Bankruptcy

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About Jay Hancock
Jay Hancock has been a financial columnist for The Baltimore Sun since 2001. He has also been The Baltimore Sun's diplomatic correspondent in Washington and its chief economics writer. Before moving to Baltimore in 1994 he worked for The Virginian-Pilot of Norfolk and The Daily Press of Newport News.

His columns appear Wednesdays and Fridays.

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