Bangerter Brothers Resign Top Posts at Care Enterprises

The top two executives of Care Enterprises have resigned as part of a reorganization plan intended to bring the nursing home chain out of bankruptcy proceedings, attorneys said Friday.

Twin brothers Dee Roy and Lee Roy Bangerter on Thursday began paid leaves of absence that will last 60 days or until the court confirms the proposed reorganization plan, said David Kupetz, an attorney representing the company.

After that, the plan calls for the brothers to be retained as consultants, and each would receive a salary of $250,000 a year, which is higher than their current $211,000 salary.

Lee Roy Bangerter was chief executive of the chain, while Dee Roy was chief financial officer. Their mother, Opal Winn Bangerter, founded the chain in 1965.

The reorganization plan, presented Friday in U.S. Bankruptcy Court in Los Angeles, also would allow the company to retire its $80-million debt to unsecured creditors by giving the creditors an 85% equity interest in the company in the form of stock.

Ownership of the firm by Care’s existing shareholders, including the Bangerters, would be reduced to 15%. Peter Landsberg, attorney for the unsecured creditors, said the plan also calls for retiring Care’s $40-million bank debt in about three years. He said the first $10 million would be paid “fairly promptly” and may be raised from the sale of nursing homes. Other payments, he said, will be made out of operating profits.

‘Millions Saved’

Attorneys for both the company and creditors said a settlement was reached in part to avoid a lengthy debate over various competing reorganization proposals. In addition, litigation was scheduled to begin Aug. 8 over a demand from the creditors to have the management of Care Enterprises turned over to a court trustee.

“We figure there will be millions of dollars saved in administrative costs by avoiding extensive litigation over a plan and the appointment of a trustee,” Kupetz said.

Care Enterprises, one of the nation’s largest nursing home operators, filed for protection from creditors in March, 1988.

Robert Baldwin Jr., previously chief operating officer, will serve as chief executive until a replacement is found, Kupetz said.