Sunwest Management G

Securities and Exchange Commission v. Sunwest Management, Inc. et al.

USDC Case No. 09-CV-06056 

Michael A. Grassmueck is the court-appointed Receiver of Sunwest Management. Updates and general case documents related to this case are available below. 


Sunwest Interim Status Report dated August 31st, 2016

STATUS UPDATE AS OF 03/10/2017

There are two assets left in the SW Estate to sell:  interest in an insurance company and residential development property in Brookwood, Alabama.   

Our best estimate for obtaining final regulatory approval to dissolve the insurance company asset is now the end of June.  Dissolution is required in order to transfer approximately $7.5 million cash from the insurance company into the SW Estate.   

The other asset, residential development property, is under contract for sale with closing expected in May.  Assuming both of these assets are sold within these timeframes, final distribution checks should be issued in September.  

The estimate for mailing final distribution checks in September depends entirely upon obtaining regulatory approval for dissolution of the insurance company by the end of June.  Obtaining this approval has taken considerably longer than originally expected.  It is possible that distribution checks will be delayed in the event regulatory approval slides past June.  We believe approval will not be delayed beyond June, but we also did not expect it to take the past 1 ½ years to get to where we are currently with our request for dissolution.  

The final payout will be approximately 2 ½ percent of allowed MIMO claims. 

STATUS UPDATE AS OF 5/23/2016

The final distribution is still going to happen. Maggie Lyons who was appointed co-receiver is in charge of the wind up (she also made the last distribution payment). Maggie recently sent me a message that states:
There are two assets left in the estate to sell: residential property in Brookwood, AL and equity in an insurance company domiciled in the Cayman Islands. We are trying to wrap up deals to sell both of these assets in time to still make the final distribution in 2016. Obtaining Cayman Islands (regulatory) dissolution approval may take up to six months and if it does take this long, the final distribution will be made in early 2017.

Several years ago we projected the final distribution would be 7-8 % and 5% of this has already been distributed. I believe the balance remaining will be approximately 2% of allowed MIMO claims so we are still on track with our projections.


The court has declared Sunwest a unitary enterprise and as such has rolled additional entities into the Stayton SW Assisted Living, LLC Chapter 11 Bankruptcy, Case No. 6:09-cv-6082. Related information is available at the following page:

Stayton SW Assisted Living, LLC, et al Chapter 11 Bankruptcy Page

Information related to the approved Distribution Plan, including the claims process, is available at the following webpage:

Distribution Plan of Receiver and CRO for Sunwest Enterprise

Third Distribution Update  

The third distribution in the Sunwest Management case will be happening soon. The targeted mailing date for the third distribution is anticipated to be December 20, 2013.

This third distribution will be 6% of the allowed MIMO claims. There will be $30 million distributed in total.

There will be a 4th and final distribution, estimated to be approximately 2% of the allowed MIMO claims. The timing for the final distribution could take up to two years and depends on the estate’s ability to liquidate its remaining assets.

Address changes

Those who have address changes and/or ownership (LLC) changes should contact Maggie Lyons’ office as soon as possible to ensure those updates are made before distribution checks are issued. You can e-mail changes to Tes Strunk at tess@resolvefinancialgroup.com.

If you need to contact co-receiver Maggie Lyons, her e-mail address is maggiel@resolvefinancialgroup.com.

 

Please feel free to contact our office with any claim related questions or concerns. You can reach Cheryl Taylor at cheryl@grassmueckgroup.com or by phone at 503-294-9928 x103. 

 

Second Distribution 1099 Information

 

The 2012 distribution for Sunwest entity partner and LLC member claims is required to be reported on Form 1099. Each claim payment is an additional recovery of the original Sunwest partnership investment. In general, all partnership entities were liquidated in 2010 and 2011. Distributions/claims paid through the final partnership tax return year were reported on Schedule K-1, and partnership investment tax basis reduced accordingly. Also in that final partnership year, the partner or member generally would have recognized gain or loss on disposition of the investment. To the extent distributions were paid in 2010, gain upon disposition of the investment increased, or loss decreased. Therefore, any additional proceeds (distributions/claims) in future years generally represent gain for tax purposes, because those proceeds were not included in the original investment disposition gain/loss.

This treatment is consistent with the Schedule K-1 footnotes included with the 2010 reporting year. Please consult your tax advisor.

The above situation is generally similar for TIC investors. However, it is not known how each TIC reported the original investment and disposition, so please consult your tax advisor. In any event, 1099 reporting of 2012 claims paid is required.

 

 

February 4, 2013 - Update

Final Distribution 

We continue to work diligently on unresolved issues prior to a final distribution in the Sunwest case.  Willamette Property Holdings is working on the liquidation of the remaining Sunwest assets, collection of receivables, and the wind down of Encore Indemnity.  The issue regarding taxation of the Sunwest estate is nearing resolution at this time. Amended tax returns are being prepared at the request of the IRS.

While we have not determined exact timelines for the resolution of these matters and consequently, the final distribution, we expect resolution yet this year. The final distribution will be made once the funds from all remaining assets have been collected.

Co-Receiver Appointed 

On October 26, 2012, Maggie Lyons was appointed co-Receiver in the Sunwest case. All receivership duties to the completion of the case will now be shared between the joint receivers, Michael Grassmueck and Maggie Lyons.

Tax Reporting 

Investor 1099s were issued and mailed on 1/31/2013. If you receive a 1099 and have any questions or concerns, please contact Cheryl Taylor at (503) 294-9928 x103 or by e-mail at cheryl@grassmueckgroup.com.

 

 

August 30, 2012 - UPDATE ON FINAL DISTRIBUTION

There are a couple of steps that need to be completed prior to making the final distribution.  The Receiver and his team of professionals are currently working with the IRS to resolve outstanding issues and reach a global settlement.  Additionally, Willamette Property Holdings continues its directive to sell the remaining Sunwest assets and wind down the captive insurance company Encore Indemnity.    

While the timing and amount of this final distribution remain unknown, we are working diligently to complete this work as quickly as possible while maximizing the return to claimants.  

April 20, 2012 UPDATE:

We are pleased to announce that the second distribution for Sunwest Management, Inc. was mailed today, Friday, April 20, 2012.  Please allow several days for delivery.  Our staff is on hand to assist you Monday-Friday 8:00 am to 5:00 PM PT in case you have any concerns regarding any distribution checks received.

Thank you. 

 

 March 19, 2012 UPDATE:

Dear Sunwest Claimant,

First of all, I want to thank you for your continued patience. I recognize that the delay of the second distribution is a major source of frustration. The scope of the Sunwest case is unprecedented and this has caused many unanticipated questions to arise.  Many of these questions are without clear or simple resolutions.  matters we have been working on include a final audit and review of claims and tax matters. The tax matters are not yet resolved, but I think they may be by the end of April. We are working to resolve these items before the distribution date to prevent further difficulties for investors.

Barring any unforseen circumstances, I estimate that the second distribution checks will be mailed by the end of April. This date is the best approximation I can give based on my recent talks with Judge Hogan.  the amount of the second distribution remains the same at up to 20% of the allowed claim amount.

Please contact my office if you have any questions or concerns regarding your claim.

Sincerely,

Michael A. Grassmueck, Receiver
Sunwest Management

 December 19, 2011 UPDATE:

The link below contains a December 15, 2011 letter from Judge Michael R. Hogan concerning the status of the second distribution and purpose of the review process currently underway.  The second distribution will be up to 20%, and the likely distribution date is late February 2012. Thank you for your ongoing patience.

  Letter from Judge Michael R. Hogan re: Second Sunwest Distribution dated 12-15-2011

 August 23, 2011 UPDATE:

The Receiver has filed Settlement Motions for Certain Settling Brokers & Dealers, Grove Mueller & Swank, P.C., Certain Settling Employees and Garrett Hemann Robertson, P.C. and the Oregon State Bar Professional Liability Fund. The Motions, and related exhibits, are available through the links below.

Certain Settling Brokers and Dealers

Receiver Michael A. Grassmueck's Motion for Approval of Settlement with Certain Settling Brokers and Dealers and for Entry of Claims Bar Order

Memorandum of Points & Authorities in Support of Receiver Michael A. Grassmueck's Motion for Approval of Settlement with Certain Settling Brokers and Dealers and for Entry of Claims Bar Order

Declaration of Receiver Michael A. Grassmueck in Support of Motion for Approval of Settlement with Certain Settling Brokers and Dealers and for Entry of Claims Bar Order

Proposed Order (1) Approving Settlement with Settling Brokers and (2) Entering Final Claims Bar Order and Injunction

Notice of (1) Motion for Approval of Settlements with Certain Brokers and Dealers, (2) Proposed Final Claim Bar Order, and (3) Hearing Date

Grove, Mueller & Swank, P.C.

Receiver Michael A. Grassmueck's Motion for Approval of Settlement with Grove, Mueller & Swank, P.C. and for Entry of Claims Bar Order

Memorandum of Points & Authorities in Support of Receiver Michael A. Grassmueck's Motion for Approval of Settlement with Grove, Mueller & Swank, P.C. and for Entry of Claims Bar Order

Declaration of Receiver Michael A. Grassmueck in Support of Motion for Approval of Settlement with Grove, Mueller & Swank, P.C. and for Entry of Claims Bar Order

Proposed Order (1) Approving Settlement with Grove, Mueller & Swank, P.C. and (2) Entering Final Claims Bar Order and Injunction

Notice of (1) Motion for Approval of Settlements with Grove, Mueller & Swank, P.C., (2) Proposed Final Claim Bar Order, and (3) Hearing Date

Certain Settling Employees

Receiver Michael A. Grassmueck's Motion for Approval of Settlement with Certain Settling Employees and for Entry of Claims Bar Order

Memorandum of Points & Authorities in Support of Receiver Michael A. Grassmueck's Motion for Approval of Settlement with Certain Settling Employees and for Entry of Claims Bar Order

Declaration of Receiver Michael A. Grassmueck in Support of Motion for Approval of Settlement with Certain Settling Employees and for Entry of Claims Bar Order

Proposed Order (1) Approving Settlement with Certain Settling Employees and (2) Entering Final Claims Bar Order and Injunction

Notice of (1) Motion for Approval of Settlements with Certain Settling Employees, (2) Proposed Final Claim Bar Order, and (3) Hearing Date

Garrett Hemann Robertson, P.C. and the Oregon State Bar Professional Liability Fund

Receiver Michael A. Grassmueck's Motion for Approval of Settlement with Garrett Hemann Robertson, P.C. and the Oregon State Bar Professional Liability Fund and for Entry of Claims Bar Order

Memorandum of Points & Authorities in Support of Receiver Michael A. Grassmueck's Motion for Approval of Settlement with Garrett Hemann Robertson, P.C. and the Oregon State Bar Professional Liability Fund and for Entry of Claims Bar Order

Declaration of Receiver Michael A. Grassmueck in Support of Motion for Approval of Settlement with Garrett Hemann Robertson, P.C. and the Oregon State Bar Professional Liability Fund and for Entry of Claims Bar Order

Proposed Order (1) Approving Settlement with Garrett Hemann Robertson, P.C. and the Oregon State Bar Professional Liability Fund and (2) Entering Final Claims Bar Order and Injunction

Notice of (1) Motion for Approval of Settlements with Garrett Hemann Robertson, P.C. and the Oregon State Bar Professional Liability Fund, (2) Proposed Final Claim Bar Order, and (3) Hearing Date

August 12, 2011 UPDATE:

The following Unopposed Motion for Preliminary Approval of Class Action Settlement and related documents have been filed with the Court. They are available for review through the links below.

Unopposed Motion for Preliminary Approval of Class Action Settlement

Memorandum in Support of Unopposed Motion for Preliminary Approval of Class Action Settlement

Exhibit A: Settlement Agreement

Exhibit B: Notice

Order Preliminarily Approving Class Action Settlement and Setting Procedures

March 29, 2011 UPDATE: Claimant Update Letter

The Receiver recently sent an update letter to claimants updating them on the status of various aspects of this case. This letter is available through the link below.

 Claimant Update Letter

March 21, 2011 UPDATE: Investor Tax Forms

The majority of tax returns for Holdco (Blackstone/Emeritus) properties, as well as all Lonestar properties, have been filed. K-1's related to these properties are completed. K-1's for other properties, including Trustco and Divestco properties, will be available in batches starting after April 15th. To clarify where each property fits into this process, property lists for completed K-1's, as well as a list of properties for K-1's still pending as of April 15th are available through the links below.

 
An explanation of common concerns over completed K-1's is available through the link below. Investors are strongly encouraged to review their K-1's, and the information in the explanation document if necessary, with their certified tax professionals.
 
 
Various tax forms have been issued to certain investors related to their 2010 Sunwest interests. The document available through the link below should provide clarification on the timing and recipients of these forms. Please note that not all investor interests generated a 2010 K-1 or 1099.
 

February 18, 2011 UPDATE:

The court has approved an Order Approving Settlement and Entering Final Claim Bar Order & Injunction with Davis Wright Tremaine LLP, K&L Gates LLP, and Thompson & Knight LLP. The order is available through the link below.

Order Approving Settlement & Entering Final Claim Bar Order and Injunction

January 18, 2011 UPDATE:

The following additional documents regarding the third party settlements have been filed with the Court. The deadline for class members to object to the fee petitions filed is January 18, 2011, and they are available below for review.

January 17, 2011 UPDATE:

The following additional documents regarding the third party settlements have been filed with the Court. The deadline for class members to object to the fee petitions filed is January 18, 2011, and they are available below for review.

     Exhibit 1
     Exhibit 2
     Exhibit 3
     Exhibit 4

December 28, 2010 UPDATE:

The following documents regarding the third party settlements have been filed with the Court. The deadline for class members to object to the fee petitions filed is January 18, 2011, and they are available below for review.

         Exhibit A
         Exhibit B
         Exhibit A
        Exhibit A
        Exhibit A
        Exhibit B
        Exhibit C
        Exhibit D
      Exhibit A
      Exhibit B

December 22, 2010 UPDATE:

Today, December 22, 2010, the first distribution checks were mailed from Portland, OR to all claimants with allowable claims. Please allow 2-3 weeks to receive your check by mail. After that period, if you still have not received your check or have questions, please feel free to contact us by phone or via email at sunwestclaims@grassmueckgroup.com.

For those who are expecting stock distributions, we expect to send letters out to that regard next week.

December 15, 2010 UPDATE:

A letter went out to investors today outlining the current status of many aspects in this case. A copy of this letter is available through the link below.

Claimant Letter

December 1, 2010 UPDATE:

The Court has rescheduled the fairness hearing to February 9, 2011 at 10:00 am. This applies to both class settlements and the Receiver's Motion to Approve.

November 11, 2010 UPDATE:

The Receiver has filed a Motion for an Order Establishing Allowed Amounts for Claims. The Motion, and related exhibits, are available through the links below.

 Exhibit 1: Claims Exhibit - claimants may look up their claims in this document.

November 10, 2010 UPDATE:

The Receiver has filed actions against Davis Wright Tremaine LLP, K&L Gates LLP, and Thompson & Knight LLP alleging claims arising from services that they provided to one or more of the Receivership entities. Recently, the parties agreed on settlements in each case during a mediation that was overseen by the court. Those parties who may be affected have been notified of these Settlements via US mail. The Settlements, related documents, and notices are available through the links below.

 Receiver's Notice (Settlement Notice): sent to all potentially affected parties
 Class Notice: sent to all investors in Sunwest Management, Inc.

September 28, 2010 UPDATE:

The court has entered an order scheduling mediation for unresolved claims issues. Claimants who disagree with the Receiver's proposed treatment of their claims are encouraged to contact our office. Those who cannot resolve their disputes may be scheduled for mediation during October 18th-20th, at the U.S. Courthouse in Eugene, Oregon. The Order, and claimant notification letter are available through the links below.

July 21, 2010 UPDATE:

The court has approved an Order confirming the Receiver, CRO & Debtor's Second Amended Joint Plan of Reorganization. The order is available through the link below, and the entire Plan is available on the Stayton SW Assisted Living, LLC et al Chapter 11 Bankruptcy Page.

Order confirming the Receiver, CRO & Debtor's Second Amended Joint Plan of Reorganization

July 15, 2010 UPDATE:

On July 13, 2010, the court confirmed the Plan of Reorganization filed in Case 09-cv-6082 Stayton SW Assisted Living, LLC, et al. The press release relating to this confirmation is available through the link below.

District Court Confirms Sunwest Plan of Reorganization

July 9, 2010 UPDATE:

On July 7, 2010, the Receiver hosted a webinar to clarify the claims process and address common questions and concerns. A recording of this webinar, as well as a PDF file of the slides presented, are available through the links below.

Claims Process Presentation

 Claims Process Presentation Recording

May 19, 2010 UPDATE:

The court has entered an Order Approving Agreement of Purchase and Sale with BRE/SW Portfolio LLC ("Blackstone"). The order is available through the link below. 

 Order Approving Agreement of Purchase and Sale

 May 3, 2010 UPDATE:

The court has approved an Order Approving Bare Land Election Terms of Distribution Plan of Receiver and Chief Restructuring Officer. The deadline for filing a Bare Land Election was extended to May 14, 2010. The order is available through the link below.

  Order Approving Bare Land Election Terms

April 13, 2010 UPDATE:

A letter went out to investors today outlining the current status of many aspects in this case. This correspondence also defines certain deadlines that investors may want to be aware of. A copy of this letter is available through the link below.

 Investor Update

March 29, 2010 ANNOUNCEMENT:

The court has entered an Order approving Auction Process, Bidding Procedures, Overbid Protection, Breakup Fee and Expense Reimbursement, and Approving form and manner of Notice and Scheduling a Hearing for Final Approval of Sale. The Order, including exhibits, is available through the link below.

 Order Approving Auction Process with Exhibits

March 24, 2010 ANNOUNCEMENT:

Claims Bar Date and Election Notice Deadline Extended

The claims bar date, and deadline for submitting a notice of election, for the claims process in both the case of the Securities and Exchange Commission v. Sunwest Management, Inc. et al., and the Stayton SW Assisted Living, LLC Bankruptcy case has been extended by order of the court.The claims bar  date, as well as the deadline for submitting a notice of election, is no longer March 31, 2010, and is now April 30, 2010.

February 19, 2010 - Claim Form Explanation

The design and verbiage of the claim form has prompted many requests for clarification. A copy of the Proof of Claim form, including a detailed explanation of each section, is available through the link below. Each section is numbered and corresponds to a numbered list of explanations following the form.

 Claim Form Explanation

 January 20, 2010 UPDATE:

Receiver Michael A. Grassmueck and Chief Restructuring Officer Clyde Hamstreet have signed an agreement to sell 134 senior living facilities to BRE/SW Portfolio LLC ("Blackstone"), a group comprised of The Blackstone Group, Emeritus Senior Living, and Columbia Pacific Advisors. This agreement must be approved by the Court and will be subject to an upset bid procedure. The Receiver is confident that the agreement with Blackstone will encourage competition from other potential purchasers. Related documents are available below.

 Motion for Approval of Auction Process, Bidding Procedures, Overbid Protection, Break-Up Fee and Expense Reimbursement, and Approving Form and Manner of Notice and Scheduling a hearing for Final Approval of Sale
 Exhibit 1 - Agreement of Purchase and Sale
 Exhibit A-1 to PSA (part 1)
 Exhibit A-1 to PSA (part 2)
 Exhibit A-1 to PSA (part 3)
 Disclosure Schedule to PSA (part 1)
 Disclosure Schedule to PSA (part 2)
 Exhibit 2 - Notice of Auction and Sale Hearing

Claims Procedure Update:

On November 3rd, 2009, an order was entered approving the claims procedure in both the case of the Securities and Exchange Commission v. Sunwest Management, Inc. et al., and the Stayton SW Assisted Living, LLC Bankruptcy case. A notice of bar date and notice of election form were sent to potential claimants. The order approving the claims procedure, claim form, and election forms are available through the links below. The claims bar date is set for March 31, 2010. In order to file a claim, please read and follow all instructions included with the approved claim form as noticed, and available through the link below.

Some of the most common questions resulting from the receipt of these documents have been answered in the document available below. Should you have additional questions after reviewing these documents, please feel free to contact the Receiver's dedicated Sunwest Claims Hotline at (866) 674-6791. You may also wish to review the Claim Form Explanation, available on the Distribution Plan page.

 Frequently Asked Questions

For your convenience, available below is the most current list of Receivership entities including addresses. If you wish to determine whether a company you have been involved with is part of Sunwest Management, Inc., these lists may be a helpful tool for INFORMATIONAL USE ONLY. They are not meant to provide an all-inclusive list of the Sunwest entities. Each document contains the same information, but is sorted differently, by Facility Name, Entity Name, and State, for your convenience.

October 2, 2009 UPDATE:

Judge Michael R. Hogan has entered an Order approving the Distribution Plan with certain exceptions. The Order, and related documents, can be viewed on the Sunwest Distribution Plan page.

INITIAL REPORT OF RECEIVER

Below is the Initial Report of Receiver Michael A. Grassmueck filed April 24, 2009.

Initial Report of Receiver

FACILITY SUMMARIES

Below is the scanned version on the Facility Summary notebook as discussed in the April 6, 2009 court hearing.  Please note that it is divided into four sections alphabetically and that each document is large so please be patient while downloading.

INVESTOR MEETING ANNOUNCEMENT

Monday, March 30, 2009, 4:30pm at Los Angeles Sheraton Gateway (Los Angeles, California)

Tuesday, March 31, 2009, 4:00pm at Holiday Inn Portland Airport (Portland, Oregon)

Tuesday, March 31, 2009, 7:00pm at Holiday Inn Portland Airport (Portland, Oregon)

The Court signed an Order granting the SEC's request for Preliminary Injunction and Appointment of a Receiver.  The Order is below.

   Order Granting Preliminary Injunction and Appointing Receiver

The SEC's complaint and supporting documents are below.