Brooksby Village owner has deal to sell company

PEABODY – Erickson Retirement Communities, owner of Brooksby Village in Peabody and 18 other retirement communities in 11 states, announced Monday it has signed an agreement to sell the company to Redwood Capital Investments, a company controlled by Baltimore businessman Jim Davis.Davis is chairman and majority owner of Allegis Group, a $5 billion privately owned staffing company headquartered in Hanover, Md.The dollar amount of the deal was not disclosed, but to complete the sale, Erickson filed for Chapter 11 bankruptcy protection Monday at U.S. Bankruptcy Court in Dallas.Erickson had been in discussions with its lenders in recent months to restructure its debt but was unable to reach an out-of-court agreement. The Chapter 11 filing is a voluntary move to enable the company to restructure its debt and reorganize its core management and real estate businesses into separate yet commonly owned legal and financial entities.The announcement comes just 10 days after Erickson CEO and founder John Erickson visited the 90-acre Brooksby Village campus to allay concerns of Brooksby’s nearly 2,000 residents. At that meeting Erickson explained the company was courting investors and the process would have no effect on Brooksby residents.Erickson’s management arm provides services, care and amenities for community residents, and continues to operate successfully. Erickson’s real estate development arm, which acquires land for future campus growth, has been significantly impacted by the recession.According to Erickson, a separation of the management and development sides of the business means existing and future residents will be better protected from the volatility of the real estate development business, and allows for the resumption of building in developing communities as the economy improves.”This strategic decision will benefit all members of the Erickson Community,” John Erickson said. “First and foremost, Jim Davis, whom I have known for years and hold in the highest regard, is a strong advocate of community residents; his top priority is their continued well being. Jim is fully committed to the values and vision of the company and will continue its mission. Equally important, this transaction allows Erickson to manage through the current difficult economic environment so the business can regain its financial footing and continue its mission to provide quality lifestyle for community residents, while also safeguarding residents’ financial security.”Erickson said Redwood would strengthen Erickson’s capital position and allow the company to continue to providing high-quality service and care to 23,000 community residents.Erickson expects the transaction, which is subject to approval of the Court, to be approved and consummated in the first quarter of 2010.John Erickson founded Erickson in 1983 with the opening of Charlestown, an innovative full-service retirement community in Catonsville, Maryland, and has expanded the network of communities to 19, with a combined 23,000 residents. He and his wife Nancy also created the Erickson Foundation, which funds various philanthropic organizations in Maryland and elsewhere, and Erickson also founded Retirement Living Television.