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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
June 29, 2001
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Date of report (Date of earliest event reported)
ASSISTED LIVING CONCEPTS, INC.
(exact name of registrant as specified in its charter)
NEVADA 1-13498 93-1148702
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(State or other jurisdiction of Commission File Number (I.R.S. Employer
incorporation or organization) Identification Number)
11835 NE Glenn Widing Drive, Bldg E, Portland, OR 97220-9057
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(Address of Principal Executive Offices) (Zip Code)
(503) 252-6233
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name or former address, if changed since last report.)
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ITEM 5. OTHER EVENTS.
On July 2, 2001, Assisted Living Concepts, Inc. (the
"Company") announced that an unofficial committee (the "Committee") of the
holders of 64% of the outstanding principal amount of its two series of
convertible subordinated debentures (collectively, the "Debentures") had not
accepted a proposal concerning a restructuring of the Debentures that the
Company first made to the Committee's advisors on April 12, 2001, nor had the
Committee reached a consensus on any counteroffer. A confidentiality agreement
and agreement to restrict trading of securities, dated May 24, 2001 (the
"Confidentiality Agreement"), between the Company and the individual Committee
members, expired June 30, 2001. The Company entered into the Confidentiality
Agreement to facilitate negotiations with the Debenture holders concerning a
restructuring of the Debentures. The Company anticipates it will continue its
negotiations with certain of the Debenture holders it believes to be key to a
solution. There can, however, be no assurance that these negotiations will
result in any agreement for a restructuring; any agreement reached between the
Company and its Debenture holders would likely be implemented through a
"pre-negotiated" plan of reorganization under Chapter 11 of the U.S. Bankruptcy
Code. If the Company is unable to implement such a pre-negotiated plan, the
Company will still likely seek protection under Chapter 11 of the Bankruptcy
Code. A copy of the Company's press release dated July 2, 2001 has been filed as
an exhibit to this Report on Form 8-K and is incorporated herein by reference.
Pursuant to the terms of the Confidentiality Agreement, the
Company provided the Debenture holders with certain nonpublic information. One
member of the Committee, Woodstead Associates LP, an affiliate of Smith
Management LLC (together, "Smith Management"), demanded in a letter dated June
29, 2001 (the "Demand Letter") that the Company honor its obligation under the
expiring agreement to release such information. The Demand Letter has been
attached as an exhibit to this Report on Form 8-K and is incorporated herein by
reference.
While the Company has advised Smith Management that it
believes that Smith Management breached its obligations under the
Confidentiality Agreement, the Company nevertheless is disclosing excerpts from
the information provided to members of the Committee (such excerpts,
collectively, the "Information"). The Information is attached as exhibits to
this Report on Form 8-K. Please note that the Information was prepared and
delivered to the Debenture holders throughout its discussions with the
Committee, and the Company has not updated the information contained therein for
purposes of filing it with this report. The Information also contained
projections and other "forward-looking statements" within the meaning of the
private securities litigation reform act of 1995, which were identified by the
use of forward-looking terminology such as "may," "will," "could," "should,"
"expect," "anticipate," "aim," "intend," "plan," "estimate," or "continue" or
the negative thereof or other variations thereof. Such forward-looking
statements were necessarily based on various assumptions and estimates. Although
the Company believed that these assumptions and estimates were reasonable at the
time that they were made, it has not updated any projections or other
forward-looking statements for purposes of this report and, accordingly, the
projections and other forward-looking statements, as well as the underlying
assumptions and estimates, may no longer be accurate, and you should not rely on
them for any purpose. In addition, the projections and forward-looking
statements were inherently subject to various risks and uncertainties, including
risks and uncertainties relating to the possible invalidity of the underlying
assumptions and estimates, that might cause actual results to differ materially
from those stated or implied by these forward-looking statements. These
forward-looking statements also were also subject to
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company-specific risks and uncertainties such as those described in
the Company's periodic reports filed with the Securities and Exchange Commission
on Form 10-K and Form 10-Q under the Securities and Exchange Act of 1934.
In addition, on June 19, 2001, the Company closed two nonrecourse loans
from Red Mortgage Capital, Inc. ("Red Mortgage"), insured by the Office of
Housing and Urban Development, in the total principal amount of $4.5 million on
which interest is to accrue at the fixed rate of 7.4% per annum until fully
paid. The borrowers under each of those loans are affiliated Texas limited
partnerships. One loan is secured by the Colonial Lodge of McKinney facility in
Texas and the other, by the Colonial Lodge of Plano facility in Texas. There
are no corporate guarantors of those loans. The net proceeds of the two loans
paid off the indebtedness due Red Mortgage, which had been secured by the
McKinney, Plano and Paris, Texas facilities. The Paris, Texas facility is now
owned by an affiliated Texas limited partnership free and clear of all liens.
The Company has also entered into an amended and restated employment
agreement with its President and Chief Executive Officer, Wm. James Nicol. A
copy of Mr. Nicol's amended and restated employment agreement has been filed as
an exhibit to this report on Form 8-K and is incorporated herein by reference.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) and (b) None.
(c) The following document is furnished as an Exhibit to this
Current Report on Form 8-K pursuant to Item 601 of Regulation
S-K:
99.1 Press Release of Assisted Living Concepts, Inc.,
dated July 2, 2001.
99.2 Letter from Smith Management LLC to Assisted
Living Concepts, Inc., dated June 29, 2001.
99.3 Excerpts from Presentation to Creditors of Assisted
Living Concepts, Inc., dated April 2001.
99.4 Excerpts from Assisted Living Concepts, Inc.
Presentation to the Bondholder Committee, dated June
2001 (Prepared by Jefferies & Company, Inc.).
99.5 Excerpts from Assisted Living Concepts, Inc.
Challenges and Opportunities, Confidential Executive
Summary, dated June 8, 2001, as Amended.
99.6 Amended and Restated Employment Agreement, effective
January 1, 2001, between Assisted Living Concepts,
Inc. and Wm. James Nicol.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
ASSISTED LIVING CONCEPTS, INC.
By: /s/ Sandra Campbell
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Name: Sandra Campbell
Title: Secretary
Date: July 2, 2001
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EXHIBIT INDEX
EXHIBIT NO. DOCUMENT DESCRIPTION
99.1 Press Release of Assisted Living Concepts, Inc., dated July 2,
2001.
99.2 Letter from Smith Management LLC to Assisted Living Concepts,
Inc., dated June 29, 2001.
99.3 Excerpts from Presentation to Creditors of Assisted Living
Concepts, Inc., dated April 2001.
99.4 Excerpts from Assisted Living Concepts, Inc. Presentation to
the Bondholder Committee, dated June 2001 (Prepared by
Jefferies & Company, Inc.).
99.5 Excerpts from Assisted Living Concepts, Inc. Challenges and
Opportunities, Confidential Executive Summary, dated June 8,
2001, as Amended.
99.6 Amended and Restated Employment Agreement, effective January
1, 2001, between Assisted Living Concepts, Inc. and Wm. James
Nicol.