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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
March 20, 2000
GRAND COURT LIFESTYLES, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-21249 22-3423087
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(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation or organization) Identification No.)
2650 North Military Trail, Suite 350, Boca Raton, Florida 33431
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (561) 997-0323
N/A
(Former name or former address, if changed since last report.)
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Item 3. Bankruptcy or Receivership.
On March 20, 2000, Grand Court Lifestyles, Inc. (the "Company") filed a
voluntary petition to reorganize under Chapter 11 of the U.S. Bankruptcy Code
with the U.S. Bankruptcy Court for the District of New Jersey.
On March 15th the Company failed to make interest payments on approximately
$167,000,000 principal amount of its debt obligations and did not fund
approximately $1,447,000 in respect of limited partner priority returns relating
to the syndicated senior living communities under the Company's management. As a
result of this and other financial concerns, the Company's management concluded
that the restructuring of its obligations through the formal process of a
court-supervised voluntary reorganization under Chapter 11 of the Bankruptcy
Code was needed to restore it to financial health.
The Company, under existing management, will continue to operate and manage its
assets and business as a "debtor-in-possession" under the Bankruptcy Code, while
at the same time working towards the development and confirmation of a plan of
reorganization.
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This report contains forward-looking statements within the meaning of Section
21E of the Securities Exchange Act of 1934. Important factors that could cause
actual results to differ materially from those in the forward-looking statements
include the Company's ability to successfully reorganize, the possibility of
liquidation if the Company cannot successfully reorganize and competitive
factors affecting the long-term care services industry. For a discussion of
other important factors, refer to the Company's documents and reports that are
available from the Securities and Exchange Commission, including the Company's
Annual Report on Form 10K for the fiscal year ended January 31, 1999 at Item 7.
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Safe Harbor for Forward-Looking Statements." Forward-looking
statements are all statements other than statements of historical fact,
including, without limitation, those that are identified by the use of the words
"anticipates," "expects", "intends", "believes", and similar expressions. The
Company's actual results could differ materially from such forward-looking
statements. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as the date hereof. The Company
undertakes no obligation to publicly release the result of any revisions to
these forward-looking statements that may be made to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
Exhibits
99. Letter to all Creditors, Limited Partners and Shareholders of Record.
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SIGNATURE
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 thereunto duly authorized.
Grand Court Lifestyles, Inc.
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(Registrant)
/s/ Paul Jawin
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Date: March 22, 2000 (Signature)
Paul Jawin
Chief Operating Officer
Exhibit 99
March 22, 2000
To all Creditors, Limited Partners and Shareholders of Record:
On March 20, 2000, Grand Court Lifestyles, Inc. ("Grand Court") filed a
voluntary petition to reorganize under Chapter 11 of the U.S. Bankruptcy Code
with the U.S. Bankruptcy Court for the District of New Jersey.
Chapter 11 provides a financially troubled business with an
opportunity to restructure its finances as well as with the opportunity to
continue its operations. Chapter 11 is an alternative to the termination of a
company's operations and the liquidation of its assets. The policy underlying
Chapter 11 is that, by reorganizing, creditors generally receive greater value
on account of their claims than they would receive in a liquidation.
In furtherance of this goal, Chapter 11 will enable Grand Court to
remain in control of its assets and business while negotiating a restructuring
of its affairs and it is hoped that Grand Court, its creditors, limited partners
and shareholders will benefit from the orderly process afforded to it by Chapter
11. Additionally, Chapter 11 will provide Grand Court with a central forum for
negotiation with creditors, security holders and other stakeholders within the
rules and procedures that govern the administration of a Chapter 11 case. As a
result, the Court protection afforded by Chapter 11 will give Grand Court an
opportunity to develop a plan of reorganization with the goal of emerging from
bankruptcy in a stronger financial position. We continue to work diligently on
your behalf.
A company can become financially troubled for many reasons. We have
included an excerpt from an industry newsletter, which shows that other senior
living companies are experiencing problems similar to those faced by Grand
Court. On March 15th, Grand Court failed to make interest payments on certain of
its debt obligations and did not fund certain limited partner priority returns
relating to some of the syndicated senior living communities under Grand Court's
management. As a result of this and other financial concerns, Grand Court's
management concluded that the restructuring of Grand Court's obligations through
the formal process of a court-supervised voluntary reorganization under Chapter
11 of the Bankruptcy Code was needed to restore Grand Court to financial health.
Once a plan of reorganization has been formulated, it will be
submitted to all parties in interest who are entitled to vote whether to accept
or reject it. The Bankruptcy Court is also required to approve a plan of
reorganization. Acceptances of a plan may not be solicited until all parties who
are entitled to vote have received a disclosure statement approved by the
Bankruptcy Court. This letter is not intended as a solicitation of acceptances,
but is designed merely for informational purposes.
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We enclose, for your further information, copies of Grand Court press
releases issued on February 25th, March 6th and March 20th.
Subject to Court and lender approval, if required, at this time Grand
Court anticipates making monthly distributions to limited partners of only those
syndicated senior living communities which have cash flow after payment or
reserve for such community's operating expenses and debt service. The amount of
any such distributions will vary by community depending upon actual cash flow,
with no distributions being made to limited partners of those communities which
have no excess cash flow available at this time. No assets of Grand Court will
be used to make such distributions.
We are working as hard as possible to remedy Grand Court's current
financial problems and thank you in advance for your patience and understanding
during this difficult time.
Very truly yours,
GRAND COURT LIFESTYLES, INC.
By:
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JOHN LUCIANI,
Chairman of the Board and Chief
Executive Officer
This letter contains forward-looking statements within the meaning of Section
21E of the Securities Exchange Act of 1934. Important factors that could cause
actual results to differ materially from those in the forward-looking statements
include the Company's ability to successfully reorganize, the possibility of
liquidation if the Company cannot successfully reorganize and competitive
factors affecting the long-term care services industry. For a discussion of
other important factors, refer to the Company's documents and reports that are
available from the Securities and Exchange Commission, including the Company's
Annual Report on Form 10K for the fiscal year ended January 31, 1999 at Item 7.
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Safe Harbor for Forward-Looking Statements." Forward-looking
statements are all statements other than statements of historical fact,
including, without limitation, those that are identified by the use of the words
"anticipates," "expects", "intends", "believes", and similar expressions. The
Company's actual results could differ materially from such forward-looking
statements. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as the date hereof. The Company
undertakes no obligation to publicly release the result of any revisions to
these forward-looking statements that may be made to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
Enclosures
