Court Approves Sunwest Purchase and Sale Agreement $1.3 Billion Transaction Involves 149 Sunwest Senior Living Properties Existing Claimants Retain Up To 49% Interest in New Blackstone / Emeritus Joint Venture March 26, 2010 10:03 AM Eastern Daylight Time   PORTLAND, Ore.--(EON: Enhanced Online News)--Stayton SW Assisted Living, an Oregon-based senior living provider formerly known as Sunwest Management and currently reorganizing under Chapter 11 (“Sunwest”), announced that US District Court Judge Michael Hogan has approved an agreement to sell 149 senior housing facilities to a joint venture formed by Blackstone Real Estate Advisors VI L.P., Emeritus Senior Living, and Columbia Pacific Advisors (the “Blackstone / Emeritus Joint Venture”). The Blackstone / Emeritus Joint Venture will become the stalking horse bidder in a bankruptcy auction to be held on or about May 17, 2010. The transaction is valued at $1.3 billion and includes a combination of cash, securities, and assumption of debt. The Blackstone / Emeritus Joint Venture will purchase most of the assets of the consolidated Sunwest enterprise. Existing investors and other claimants in the bankruptcy estate will be permitted to exchange their claims for either cash or up to 49% of the units in the venture. “This is a very promising transaction for Sunwest’s investors and other creditors of the bankruptcy estate, for which we all owe thanks to Judge Hogan and individuals he has appointed,” said Chief Restructuring Officer Clyde Hamstreet. “He employed an effective mediation strategy, using [retired Lane County Circuit Court Judge] Lyle Velure as mediator, to resolve most of the financial and legal complexities and disputes. This allowed hundreds of Sunwest entities that were on the verge of liquidation to be consolidated into a single viable business. That act alone created significant value for the estate to the benefit of investors, lenders, and other creditors.”  Investor groups also endorsed the Court’s handling of the case. “If it were not for Judge Hogan’s concern for investors, his belief in the company, and his willingness to stand up to secured lenders seeking to foreclose on their collateral, most of us investors would have lost everything,” said Bill Bryan, Chairman of the Management Committee, which consists of investor representatives. “Instead, we are looking forward to prospects of a meaningful return of our investments. Judges Hogan and Velure, the professionals working on this case, and the combined creditors’ committees have done a terrific job in making that possible.”  The Court selected the Blackstone / Emeritus Joint Venture as stalking horse bidder over a competing proposal from AEW Capital Management, which sought to make a preferred investment in the reorganized company. The two proposals were brought forward to the Court by the Chief Restructuring Officer, Receiver Michael Grassmueck, and the Management Committee after months of negotiations. Earlier in March, the Court appointed an independent expert, Bettina Whyte of Bridge Associates, LLC, to facilitate final negotiations with both Blackstone and AEW and assist in evaluating the competing proposals. “The final stages of negotiations resulted in a major gain to the bankruptcy estate,” Hamstreet said. “Both bidders improved their offers dramatically. The real winners are the investors and creditors of Sunwest. Claimants who want cash will be able to receive cash, while those who want to preserve their tax status or share in the reorganized company’s future potential will be able to roll their existing investments into the new venture. We have been working very hard to provide this choice to investors and are grateful to the Court, Ms. Whyte, and others involved for their roles in bringing about this positive result.”  The Court approved bid procedures to govern an upcoming six week bidding period, and is expected to appoint an investment banker to advise the estate during the bidding and auction process. As lead bidder, the Blackstone / Emeritus Joint Venture will have customary overbid protection and will receive break-up fees if another bidder makes the highest and best bid at the auction. Closing of the sale will be subject to customary conditions, confirmation of Sunwest’s plan of reorganization, completion of loan modifications, and transfers of operating licenses. Closing is expected to occur in July 2010. The bid procedures will be available online at www.sunwestmanagement.com once the Court approval order has become available. In another hearing earlier this week, the Court extended the claims bar date and notice of election deadlines to April 30, 2010. Proof of claim forms and additional court information are available at www.bmcgroup.com/restructuring/geninfo.aspx?ClientID=226. About Sunwest Management Founded in Oregon in 1991, Sunwest Management is one of the largest private senior living providers in the country and is a significant Oregon employer. The company engaged Clyde Hamstreet of Hamstreet & Associates in late November 2008 to serve as chief restructuring officer. After the SEC filed suit against the company, the U.S. District Court in Eugene, Oregon, entered an order on March 10, 2009, establishing a federal receivership and appointing Michael Grassmueck of The Grassmueck Group as receiver. Subsequently Sunwest has been reorganizing under the supervision of the court, the Receiver, and the CRO. For more information about Sunwest please visit: www.sunwestmanagement.com. For more information about Hamstreet & Associates please visit www.hamstreetandassociates.com. For more information about The Grassmueck Group, visit www.grassmueckgroup.com. About The Blackstone Group Blackstone is one of the world’s leading investment and advisory firms. Its alternative asset management businesses include the management of private equity funds, real estate funds, hedge funds, credit-oriented funds, collateralized loan obligation vehicles (CLOs) and closed-end mutual funds. The Blackstone Group also provides various financial advisory services, including mergers and acquisitions advisory, restructuring and reorganization advisory and fund placement services. Further information is available at www.blackstone.com. About Emeritus Senior Living Emeritus Corporation (NYSE:ESC) is a national provider of assisted living and Alzheimer's and related dementia care services to seniors. Emeritus is a publicly traded company that currently operates 316 communities in 36 states representing capacity for approximately 27,500 units and approximately 32,800 residents. For more information, visit www.emeritus.com. Contacts LANE PR Angie Galimanis, 503-546-7871 Permalink: http://eon.businesswire.com/news/eon/20100326005102/en