NOTICE TO THE HOLDERS OF

Transcription

1 > THE BASK OF HEW YORK MELLON NOTICE TO THE HOLDERS OF ILLINOIS FINANCE AUTHORITY REVENUE BONDS (THE CLARE AT WATER TOWER PROJECT) SERIES 2005B AND SERIES 2005C CUSIP" THE CLARE AT WATER TOWER VARIABLE RATE DEMAND REVENUE BONDS, SERIES 2005D CUSIP* THE CLARE AT WATER TOWER TAXABLE VARIABLE RATE DEMAND REVENUE BONDS, SERIES 2005E CUSIP* ILLINOIS FINANCE AUTHORITY REVENUE REFUNDING BONDS (THE CLARE AT WATER TOWER) SERIES 2010A AND SERIES 2010B CUSIP* October 23,2012 NOTE: THIS NOTICE CONTAINS IMPORTANT INFORMATION THAT IS OF INTEREST TO THE BENEFICIAL OWNERS OF THE SUBJECT SECURITIES. IF APPLICABLE, ALL DEPOSITORIES, CUSTODIANS, AND OTHER INTEWIEDIAJHES RECEIVING THIS NOTICE ARE REQUESTED TO EXPEDITE RETRANSMITTAL TO SUCH BENEFICIAL OWNERS IN A TIMELY MANNER -- lhis notice is being given by Tine Bank of New York ivieiion Trust Coripmy, National Association, as successor in interest to J.P. Morgan Trust Company, National Association, as

2 THE BASK OF NEW YORK MELLON trustee (the "Trustee"), pursuant to the following four documents and collectively referred to in this notice as the "Indentures": (i) Master Trust Indenture (Amended and Restated) dated as of July 1,2010, between The Clare at Water Tower (the "Comoration") and the Trustee as Master Trustee (the "Master Trust Indenture"); (ii) Bond Trust Indenture dated as of November 1, 2005, with respect to the Series 2005A Bonds, the Series 2005B-1 Bonds, the Series 2005B-2 Bonds, and the Series 2005C Bonds between the Issuer and the Trustee as Bond Trustee (the "Series 2005 Indenture"); (iii) Bond Trust Indenture dated as of November 1, 2005, as amended, between the Issuer and the Trustee as Bond Trustee with respect to the Series 2005D Bonds; and (iv) Bond Trust Indenture dated as of November 1, 2005, as amended, between the Corporation and the Trustee as Bond Trustee with respect to the Series 2005E Bonds. On December 5, 201 1, Wells Fargo Bank, National Association (the "Series 2010 Trustee") succeeded The Bank of New York Mellon Trust Company, Natioual Association as the trustee pursuant to the Bond Trust Indenture dated as of July 1, 2010, with respect to the Series 2010A Bonds and the Series 2010B Bonds (the "Series 2010 Indenture"). Capitalized terms used but not defined herein shall have the meanings assigned to them in the Indentures or the Loan Agreements described therein, as applicable. The Clare at Water Tower Project is a continuing care retirement community consisting of 248 independent living apartments, 39 assisted living apartments, 15 memory support assisted living suites, and 32 nursing beds, together with common areas and parking, located in a 53 story building containing approximately 750,000 square feet constructed on approximately 0.6 acres located one block west of Michigan Avenue in dowitown Chicago, Illinois. Bankruptcy On November 14,201 1, the Corporation filed a voluntary petition for relief under Chapter 11 of Title 11 of the United States Code with the United States Bankruptcy Court for the Northern District of Illinois (the "Bankruptcy Court"), Case No. 11-bk On April 23, 2012, the Corporation filed the Debtor's Fij?h Amended Plan of Reorganization Under Chapter 11 of the Bankruptcy Code (the "Plan") with the Bankruptcy Court. On April 27, 20i2, rhe Bankruptcy Court entered an order confirming the Plan, which then becae effective on Juiy %,20i2.

3 THE BANK OF NEW YORK MELLON Joint Motion Filed Requesting Disposition of Certain Excess Funds On October 23,2012, (1) The Bank of New York Mellon Trust Company, N.A., not individually, but as Trustee and as series trustee under the Series 2005 Indenture, (2) the Series 2010 Trustee, and (3) Bank of America, N.A. ("Bank of America"), on behalf of itself and certain letter of credit banks, jointly filed with the Bankruptcy Court as Docket 543 that certain Joint Motion of the Lender Parties for Order in Aid of Consummation of the Plan (the "Motion") requesting that the Bankruptcy Court determine the disposition of certain excess funds. A file-stamped copy of the Motion (without attachments) is included as Schedule "A" hereto. Pursuant to the terms of the Plan, The Bank of New York Mellon Trust Company, National Association, as the series trustee under the Series 2005 Indenture, distributed funds on deposit in the Series 2005A Account of the Debt Service Reserve Fund under the Series 2005 Indenture to the Series 2005A Bondholders after the effective date of the Plan, effectively redeeming the Series 2005A Bonds at par. Following such distribution, approximately $1.6 million (the "Excess Funds") remains in the Series 2005A Account of the Debt Service Reserve Fund under the Series 2005 Indenture. However, as drafted, the applicable bond documents do not expressly provide for the disposition of the Excess Funds. The Bank of New York Mellon Trust Company, National Association, as the series trustee under the Series 2005 Indenture, has reviewed and interpreted the applicable bond documents to require the payment of the Excess Funds first to the holders of the Series 2005B Bonds and to the holders of the Series 2005C Bonds to the extent of their claims, with the balance to be distributed to all of the remaining Fixed Rate Bondholders and Variable Rate Bondholders in accordance with the intercreditor agreement. Bank of America and the Series 2010 Trustee have interpreted the applicable bond documents to require the payment of the Excess Funds to all of the remaining Fixed Rate Bondholders and Variable Rate Bondholders - not first to the holders of the Series 2005B Bonds and the holders of the Series 2005C Bonds - subject to the terms of an intercreditor agreement. To effectuate the treatment of the claims of the Variable Rate Bondholder Claims and the claims of the Fixed Rate Bondholder Claims under the Plan, the Motion was filed requesting that the B&ptcy Court issue an order determining who is entitled to receive the Excess Funds in accordance with the Bond Documents. As defined in the Plan, the "Fixed Rate Bondholders" are the holders of the Series 2005A, Series 2005B, and Series 2005C Bonds and the Series 2010A and Series 2010B Bonds, while "Variable Rate Bondholders" are the holders of the Series 2005D Bonds and the Series 2005E Bonds. A hearing on the Motion has been set by the Bankruptcy Court for November 13,2012, at 10:OO a.m. (Prevailing Central Time). We will continue to monitor the case and will provide updates as necessary.

4 * THE BA&K OF NEW YQBK EiIELLON Questions concerning this notice may be addressed to the Trustee as follows: J. Chris Matthews, Vice President, The Bank of New York Mellon Trust Company, National Association, 601 Travis, 16th Floor, Houston, Texas, 77002, Telephone: , Facsimile: , Dated: October 23, 2012 The Bank of New York Mellon Trust Company, National Association, as Trustee N-: CUSIP numbers appearing herein have been included solely for the convenience of the Holders. The Bank of New York Mellon Trust Company, National Association, assumes no responsibility for the selection or use of such numbers and makes no representation for their accuracy.

5 DAL v5 Schedule "A"

6 Case Doc 543 Filed 10/23/12 Entered 10/23/ Desc Main Document Page 1 of 7 UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION In re: 3 Chapter 11 CWT Liquidation Company, 8 Case No Debtor. 8 Hon. Timothy A. Barnes NOTICE OF MOTION PLEASE TAKE NOTICE THAT on October 23, 2012, the Lender Parties filed their JOINT MOTION FOR ADMINISTRATIVE ORDER IN AID OF CONSUMMATION OF THE PLAN (the "Motion"). PLEASE TAKE FURTHER NOTICE THAT on November 13, 2012 at 10:OO a.m. (prevailing Central Time) a hearing on the Motion shall take place before the Honorable Timothy A. Barnes or before any other judge who may he sitting in his place and stead, in Courtroom 642 in the United States Courthouse, 219 South Dearborn Street, Chicago, Illinois, at which time you may appear if you deem fit. Dated: October 23, 2012 By: Is/ Nancy Godinho Everett Brian I. Swett (ARDC No ) Nancy Godinho Everett (ARDC No ) Winston & Strawn LLP 35 West Wacker Drive Chicago, Illinois Telephone: Facsimile: Attorneys for Bank of America, N.A. on behalf of itself and certain Prepetition Letter of Credit Banks

7 Case Doc 543 Filed 10/23/12 Entered :47:40 Desc Main Document Page 2 of 7 UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION In re: 5 Chapter 11 CWT Liquidation Company, 5 Case No Debtor. Hon. Timothy A. Barnes JOINT MOTION FOR ADMINISTRATIVE ORDER IN AID OF CONSUMMATION OF THE PLAN The Bank of New York Mellon Trust Company, N.A., ("BNYM") not individually, but as Master Trustee (the "Master Trustee") under that certain Master Trust Indenture, dated as of July 1, 2010 (as amended, the "Master Indenture"), and as series trustee under various series indentures including that certain Bond Trust Indenture, dated as of November 1, 2005 (as amended, the "Series 2005 Indenture"), between the Illinois Finance Authority (the "Authority") and BNYM as series trustee (the "Series 2005 Bond Trustee"), Wells Fargo Bank, N.A., as series trustee for the Series 2010 Bonds (as defined in the Master Indenture) (the "Series 2010 Bond Trustee"), and Bank of America, N.A., on behalf of itself and certain prepetition letter of credit banks ("Bank of America," and collectively, with the Master Trustee, the Series 2005 Bond Trustee and the Series 2010 Bond Trustee, the "Lender Parties"), by and through their respective undersigned counsel, hereby jointly move this Court to enter an order in aid of consummation of the Debtor's Fifth Amended Plan of Reorganization under Chapter 11 of the Bankruptcy Code [Docket No (the "plan").' In support of this Motion, the Lender Parties respectfully state as follows: I =--I..:&.I:. A * A L..r. L'LCL, LY,,,,',,, LEY. &,,,,, UIY "", ll"ly I.,,,l",.,,. o.l the Series 2005 Indenture or the Plan, as applicable...&.,,"..,"..., 2...1"~ "... L.1 " =." ,.-+ Aa+7-=.A h-.-:. -L2-r1 La- +ha --2-'--.--.&.-A +h-.-tn in +hs hflrrter Tnil,=n+n>rs

8 Case Doc 543 Filed 10/23/12 Entered 10/23/12 11:47:40 Desc Main Document Page 3 of 7 JUFUSDICTION 1. This Court has jurisdiction to grant the relief requested by this Motion pursuant to 28 U.S.C and 1334, 11 U.S.C. $51 142(b) and 105(a), Rule 3020(d) of Federal Rules of Bankruptcy Procedure and sections 10(c), 10(j) and 10(k) of the Plan. Section 10 of the Plan provides in pertinent part: "On and after the Effective Date, the Bankruptcy Court shall retain jurisdiction over all matters arising in, arising under, and related to the Chapter 11 Case for, among other things, the following purposes:... (c) to ensure that distributions to Holders of Allowed Claims are accomplished as provided herein;... (i) to hear and determine disputes arising in connection with the interpretation, implementation, or enforcement of this Plan, the Confirmation Order, any transactions or payments contemplated hereby or under any agreement, instrument, or other document governing or relating to any of the foregoing; [and] (k) to take any action and issue such orders as may be necessary to construe, enforce, implement, execute, and consummate this Plan...." BACKGROUND 2. On November 14, 201 1, the Clare at Water Tower (the "Clare") commenced this case by filing its voluntary petition for relief under chapter 11 of title 11 of the United States Code (1 1 U.S.C. lo1 et seq., as amended, the "Bankruptcy Code"). 3. On April 23,2012, the Clare filed the Plan. 4. On April 27, 2012, this Court entered its Findings of Fact, Conclusions of Law, and Order Confirming Debtor's Plan of Reorganization under Chapter 11 of the Bankruptcy Code [Docket No (the "Confirmation Order"). The Effective Date of the Plan is July 2, 5. Pursuant to the Plan, the claims of bondholders represented by Bank of America were treated in Class 3 and the claims of bondholders represented by the Series 2010 Bond Trustee, as well as any other Fixed Rate Bondholder Claims, were treated in Class Section of the Pla provides :ha: "[:]be Master Bond Txstee and the Variable Rate Bond Trustee shall be authorized to apply [all cash and cash equivalents held by

9 Case Doc 543 Filed 10/23/12 Entered 10/23/ :47:40 Desc Main Document Page 4 of 7 each in the debt service reserve accounts and any other accounts and funds established under the applicable Bond Documents exclusively for the holders of the Variable Rate Bonds] in accordance with the applicable Bond Documents." 7. Section of the Plan provides that "[tlhe Master Bond Trustee and Fixed Rate Bond Trustee shall be authorized to apply [all cash and cash equivalents held by each in the debt service reserve accounts and any other accounts and funds established under the applicable Bond Documents exclusively for the holders of the Fixed Rate Bonds] in accordance with the applicable Bond Documents." 8. The applicable Bond Documents that govern the distribution of funds on account of Variable Rate Bondholder Claims and Fixed Rate Bondholder Claims include, inter nlia, the Master Indenture, the Series 2005 Indenture, the Series 2010 Indenture, the Variable Rate Bond Indenture and the Intercreditor Agreement. 9. Pursuant to the terms of the Plan, BNYM as the Series 2005 Bond Trustee distributed funds on deposit in the Series 2005A Account of the Debt Service Reserve Fund under the Series 2005 Indenture to the Series 2005A Bondholders after the Effective Date of the Plan, effectively redeeming the Series 2005A Bonds at par. Following such distribution, approximately $1.6 million (the "Excess Funds") remains in the Series 2005A Account of the Debt Service Reserve Fund under the Series 2005 Indenture. RELIEF REOUESTED 10. As drafted, the applicable Bond Documents do not expressly provide for the disposition of the Excess Funds. The Series 2005 Bond Trustee has reviewed and interpreted the appiiczble Bond Documeiits to require the payment of the Excess Funds first to the Series Bondholders and to the Series 2005C Bondholders to the extent of their claims, with the balance

10 Case Doc 543 Filed 10123/12 Entered 10/23/12 11:47:40 Desc Main Document Page 5 of 7 to be distributed to all of the remaining Fixed Rate Bondholders and Variable Rate Bondholders in accordance with the Intercreditor Agreement. Bank of America and the Series 2010 Bond Trustee have interpreted the applicable Bond Documents to require the payment of the Excess Funds to all of the remaining Fixed Rate Bondholders and Variable Rate Bondholders - not first to the Series 2005B Bondholders and the Series 2005C Bondholders - subject to the terms of the Intercreditor Agreement. To effectuate the treatment of Variable Rate Bondholder Claims and Fixed Rate Bondholder Claims under the Plan, the Lender Parties request that this Court issue an order determining who is entitled to receive the Excess Funds in accordance with the Bond Documents. BASIS FOR RELIEF 11. To facilitate the Court's entry of an order in aid of consummation of the Plan and the Court's determination of the recipients of the Excess Funds, two position papers are attached hereto as Exhibit A and Exhibit B which were prepared by the Lender Parties based on their interpretations of the Bond Documents. 12. The Plan cannot be fully consummated and all funds distributed to creditors until the issue regarding the payment of the Excess Funds is resolved. It is in the best interests of creditors and the estate that the Court resolve the dispute regarding the payment of the Excess Funds in aid of consummation of the Plan. WAIVER OF PAGE LIMIT RESTRICTIONS 13. Due to the complexity of the issues addressed herein, the Lender Parties respectfully request retroactive leave for this Motion with attachments to exceed the fifteen-page limit established by kzle 5005-?(D) of the Loca! Ru!es for the United Stiltes Bankruptcy Court for the Northern District of Illinois, as needed.

11 Case Doc 543 Filed 10/23/12 Entered 10/23/12 11 :47:40 Desc Main Document Page 6 of 7 NOTICE 14. Notice of this Motion has been given to (i) counsel for the Debtor, (ii) all Series 2005B Bondholders, (iii) all Series 2005C Bondholders, (iv) all Series 2010A Bondholders, (v) all Series Bondholders, (vi) counsel for the Authority and (vii) the Office of the United States Trustee for the Northern District of Illinois. In light of the nature of the relief requested, the Lender Parties submit that no further notice is required. [Remainder ofpage intentionally lefi blank]

12 Case Doc 543 Filed 10/23/12 Entered 10/23/12 11:47:40 Desc Main Document Page 7 of 7 CONCLUSION WHEREFORE, the Lender Parties request that the Court enter an order determining the disposition of the Excess Funds, and granting such other and further relief as is just and equitable. Dated: October 23, 2012 By: /s/ Clifton R. Jessup, Jr. Respectfully submitted, By: /s/ Brian I. Swett Greenberg Traurig LLP Winston & Strawn LLP Clifton R. Jessup, Jr. (pro hac vice) Brian I. Swett (1L Bar No ) 2200 Ross Avenue, Suite 5200 Nancy Godinho Everett (IL Bar No ) Dallas, TX West Wacker Drive Telephone: Chicago, IL Facsimile: Telephone: Facsimile: Attorneys for The Bank ofnew York Mellon Trust Company N.A., the Master Trustee and Series Indenture Trustee Attorneys for Bank of America, N.A. on behalf of itselfand certain Prepetition Letter of Credit Banks By: /s/ Nathan F. Coco McDermott Will & Emery LLP William P. Smith (IL Bar No ) Nathan F. Coco (IL Bar No ) 227 West Monroe Street, Suite 4700 Chicago, IL Telephone: Facsimile: Attorney for Wells Fargo Bank, NA., as Series Indenture Trustee