Housing Market Causes Erickson Communities to file Bankruptcy
Debtors in Northern California might be interested in knowing that senior communities are being impacted by the fall in real estate prices. US News reports that Erickson Communities, a continuing care company, filed for Chapter 11 bankruptcy this fall.
US News reports that Erickson’s bankruptcy related back to the fall in the housing market. Specifically, under Erickson’s business model, new clients were charged significant entrance fees. When the housing market fell, new clients could not price their houses to afford Erickson’s fees. Consequently, Ericson suffered and had to file bankruptcy.
Despite Erickson’s unfortunate situation, David Schless, president of the nonprofit American Seniors Housing Association remains confident in the rental senior housing market, stating "I think the rental senior housing market is not facing too much difficulty.”
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