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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
December 5, 2001
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Date of report (Date of earliest event reported)
ASSISTED LIVING CONCEPTS, INC.
(exact name of registrant as specified in its charter)
NEVADA 1-13498 93-1148702
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(State or other jurisdiction of Commission File Number (I.R.S. Employer
incorporation or organization) Identification Number)
11835 NE Glenn Widing Drive, Bldg E, Portland, OR 97220-9057
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(Address of Principal Executive Offices) (Zip Code)
(503) 252-6233
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name or former address, if changed since last report.)
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
On October 1, 2001, Assisted Living Concepts, Inc. (the
"Company"), and its wholly owned subsidiary, Carriage House Assisted Living,
Inc. ("Carriage House", and together with the Company, the "Debtors") each filed
a voluntary petition under chapter 11 of title 11 of the United States Code (the
"Bankruptcy Code") in the United States District Court for the District of
Delaware in Wilmington (the "Court"), case nos. 01-10674 and 01-10670,
respectively, which are being jointly administered (the "Cases"). On December 5,
2001, the Court entered an order approving the first amended joint plan of
reorganization, subject to certain minor modifications (the "Plan"). Upon
satisfaction of certain conditions set forth in the Plan, the Company and its
subsidiaries will emerge from the proceedings under chapter 11 of the Bankruptcy
Code (which is expected to be January 1, 2002, subject to satisfaction or waiver
of all conditions to the effective date (the "Effective Date")). The
Distribution Record Date is December 20, 2001. The confirmation order is filed
as an exhibit to this Form. The principal provisions of the Plan are as follows:
- On or about the Effective Date of the Plan, up to $40.25 million
aggregate principal amount of seven-year secured notes (the "New
Senior Secured Notes"), bearing interest at 10% per annum,
payable semi-annually in arrears, and up to $15.25 million
aggregate principal amount of ten-year secured notes (the "New
Junior Secured Notes" and collectively with the New Senior
Secured Notes, the "New Notes"), bearing interest payable in
additional New Junior Secured Notes for three years at 8% per
annum and thereafter payable in cash at 12% per annum payable
semi-annually in arrears, and (c) 96% of new common stock, par
value $0.01 (the "New Common Stock") of the reorganized Company
will be issued to the Company's Allowed Class 4 Claims.
- As of the date of this filing, there were 17,120,745 shares of
common stock ("Old Common Stock") issued by the Company. The
Company's Old Common Stock will be canceled and holders will be
entitled to receive 4% of the New Common Stock of the
reorganized Company. Upon implementation of the Plan, the
Company will issue up to 6,500,000 shares of New Common Stock
(subject to the Reserve discussed below) to its holders of Old
Common Stock and Allowed Class 4 Claims in accordance with the
Plan provisions.
- The new Board of Directors of the reorganized Company will
consist of seven members as follows: Leonard Tannenbaum, Andre
Dimitriadis, W. Andrew Adams, Matthew Patrick, Mark Holliday,
Richard Ladd and the Chief Executive Officer of the Company as
of the Effective Date. The Board of Directors of the Company as
of the Effective Date will select the Board of Directors and
senior management of Carriage House.
- The Company will hold back from the initial issuance of New
Common Stock and New Notes on the Effective Date a percentage of
the New Common Stock and the New Notes (the "Reserve") to be
issued to holders of Allowed Class 4 Claims
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because the total amount of, and the identities of the holders
of, the Allowed Class 4 Claims will not be known until after the
Effective Date, either because certain Allowed Class 4 Claims
will be Disputed Claims (as defined in the Plan) or because
those Claims will not have been made by their holders prior to
the Effective Date. The initial distribution with respect to
Allowed Class 4 Claims will be made only to the holders of
Allowed Class 4 Claims that have been allowed prior to December
14, 2001 (the "Cutoff Date"). Once the total amount of the
Allowed Class 4 Claims has been determined, the shares of New
Common Stock and the New Notes held in the Reserve will be
distributed pro rata among the holders of the Allowed Class 4
Claims (the date of this distribution, the "Subsequent
Distribution Date"). If the Reserve is insufficient to cover
Allowed Class 4 Claims allowed after the Cutoff Date, the
Company and its subsidiaries will have no further liability with
respect to those Class 4 Claims and the holders of those Claims
will receive proportionately lower distributions of shares of
New Common Stock and New Notes than the holders of Allowed Class
4 Claims allowed prior to the Cutoff Date. If the Reserve
exceeds the distributions necessary to cover Allowed Class 4
Claims allowed after the Cutoff Date, the additional securities
remaining in the Reserve will be distributed among all holders
of Allowed Class 4 Claims so as to ensure that each holder of an
Allowed Class 4 Claim receives, in the aggregate, its pro rata
share of the New Common Stock and the New Notes. In this case,
the holders of Allowed Class 4 Claims allowed prior to the
Cutoff Date will receive distributions of securities both on the
Effective Date and on the Subsequent Distribution Date.
The Company and Carriage House entered into a
debtor-in-possession facility with Heller Healthcare Finance, Inc.("Heller") in
an approximate principal amount of up to $4.4 million (the "DIP Facility") to
supplement the Company and Carriage House's cash position in order to ensure
that all on-going working capital needs were met. Concurrent with the closing of
the DIP Facility, certain wholly-owned subsidiaries of the Company entered into
an amendment of their existing facility with Heller, which is guaranteed by the
Company (the "Existing Facility") to, among other things, extend the maturity of
the Existing Facility to be coterminous with the DIP Facility. Pursuant to the
Plan, the DIP Facility will be refinanced through an amendment of the Existing
Facility in connection with the exit from bankruptcy (the "Exit Facility"). The
principal amount of the Exit Facility will not exceed $44.0 million and will
mature 36 months from the date on which the Company exits from bankruptcy.
Principal will be payable monthly in a monthly amount of $50,000 for the first
year, $65,000 for the second year and $80,000 for the last year of the exit
facility term. Interest will be calculated at 4.5% over three month LIBOR,
floating monthly (not to be less than 8%), and payable monthly in arrears. The
Company will remain liable for the entire amount of the Exit Facility as a
guarantor.
As of November 30, 2001 the assets and liabilities of the
Company on a historical cost basis were $352.1 million and $306.9 million,
respectively. On or near the Effective Date of the Plan, the Company will adopt
the provisions of "fresh start accounting", which require the Company to restate
all assets and liabilities to their fair values based upon the provisions of the
Plan and certain valuation studies currently underway.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) and (b) None.
(c)
Exhibit 2.1 Findings of Fact, Conclusions of Law and Order
Confirming the Joint Plan of Reorganization dated
December 5, 2001 (filed herewith).
Exhibit 2.2 Amended Joint Disclosure Statement of the Debtors
Pursuant to Section 1125 of the Bankruptcy Code dated
October 30, 2001 (filed herewith).
Exhibit 2.3 Amended Joint Plan of Reorganization of the Debtors
dated October 30, 2001 (filed herewith).
Exhibit 99.1 Press Release of the Company dated December 6, 2001
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
ASSISTED LIVING CONCEPTS, INC.
By: /s/ SANDRA CAMPBELL
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Name: Sandra Campbell
Title: Secretary
Date: December 19, 2001
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EXHIBIT INDEX
EXHIBIT NO. DOCUMENT DESCRIPTION
Exhibit 2.1 Findings of Fact, Conclusions of Law and Order
Confirming the Joint Plan of Reorganization dated
December 5, 2001 (filed herewith).
Exhibit 2.2 Amended Joint Disclosure Statement of the Debtors
Pursuant to Section 1125 of the Bankruptcy Code dated
October 30, 2001 (filed herewith).
Exhibit 2.3 Amended Joint Plan of Reorganization of the Debtors
dated October 30, 2001 (filed herewith).
Exhibit 99.1 Press Release of the Company dated December 6, 2001