Federal Court Order Supports Sunwest Management, Inc. Restructuring

Thu Mar 12, 2009 7:54am EDT

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SALEM, Ore.--(Business Wire)--
The U.S. District Court entered an order on Wednesday formalizing an agreement
reached between the Securities and Exchange Commission (SEC), Sunwest
Management, Inc., former Sunwest CEO Jon Harder, investors and creditors in
Harder`s bankruptcy proceedings, and other related parties. The court`s ruling
culminates a week of negotiations between the parties after the same Court
denied the SEC`s request on March 2nd to freeze Sunwest assets and appoint a

Judge Hogan issued his ruling late in the day after U.S. Magistrate Court Judge
Thomas Coffin denied a motion from secured lenders that Hogan be recused due to
his role as a mediator in Jon Harder`s bankruptcy case. Key aspects of the order
are as follows: 

1. An SEC receiver has been appointed for the purpose of investigating alleged
securities fraud, pursuing third-party claims, and recovering assets for the
benefit of creditors and investors. 

2. As contemplated in an earlier stipulation filed in Jon Harder`s bankruptcy
case, operational and financial control of Sunwest will remain in the hands of
the Chief Restructuring Officer, reporting to a Management Committee consisting
of creditors and tenant-in-common investors in the bankruptcy estate. 

3. All creditors of and claimants against Sunwest and related entities are
stayed from taking any action that interferes with the Receiver`s or the Chief
Restructuring Officer`s control, possession of management of all assets covered
by the order, which includes all entities in which Harder has an ownership

"We are very pleased with the day`s events," said Clyde Hamstreet, Sunwest`s
Chief Restructuring Officer. "Not only does this outcome allow Sunwest to
continue its restructuring efforts, it gives us much more traction by stopping
actions to foreclose properties, install new receivers, and terminate management
contracts. We`ve needed breathing room from all the legal actions to allow the
business restructuring to make progress, and today we achieved that. We look
forward to working cooperatively with the SEC and the Receiver to protect
investors and maximize recovery for investors and unsecured creditors." 

Sunwest Management, founded in Oregon in 1991, is one of the largest private
senior living providers in the country and a significant Oregon employer. The
company engaged Clyde Hamstreet in late November 2008 to serve as Chief
Restructuring Officer, a new position. Mr. Hamstreet, a nationally recognized
turnaround professional, is leading the effort to preserve value, improve
earnings, and help Sunwest meet its financial obligations to creditors and

For more information on the restructuring of Sunwest Management, Inc., please
see the company`s website: www.sunwestmanagement.com.

Sunwest Management, Inc.
Steve Stradley, 503-375-9016

Copyright Business Wire 2009