Alterra Files Plan of Reorganization and Motion Outlining Bidding Procedures for Exit Financing Transaction

MILWAUKEE, WISCONSIN, March 27, 2003 — Alterra Healthcare Corporation (OTC:ATHC.PK) ("Alterra" or the "Company") announced today that it has filed its Plan of Reorganization and an accompanying Disclosure Statement with the U.S. Bankruptcy Court for the District of Delaware. Alterra's Plan contemplates that Alterra will conduct a process under the supervision of the independent special committee of its Board of Directors and the Bankruptcy Court in order to solicit and identify the "highest and best" proposal for a transaction to address certain capital and liquidity needs of Alterra upon completion of its restructuring (the "Liquidity Transaction"). The Company noted that a Liquidity Transaction, which would be consummated and funded upon or promptly following confirmation of Alterra's Plan of Reorganization, could involve the sale of equity securities in the reorganized Alterra or the sale of the assets of Alterra as a going concern.

Alterra reported that its Plan of Reorganization incorporates many restructuring agreements negotiated by Alterra with certain of its secured creditors and landlords prior to the commencement of its bankruptcy case. The Plan also outlines the manner in which unsecured claims against and equity interest in Alterra will be treated in the bankruptcy, identifying various classes of creditor claims and equity interests and the proposed treatment of each class. In an effort to maximize the value available to the Company's capital structure constituents, the Plan envisions that Alterra will seek to identify, negotiate and consummate a Liquidity Transaction in order to (i) establish the fair value of Alterra available for distribution to holders of unsecured claims and equity interests in accordance with applicable law and contractual subordination provisions governing certain of its unsecured debt and (ii) address the capital and liquidity needs of the reorganized Alterra.

Alterra also announced that it has filed with the Bankruptcy Court a motion for an order approving bidding procedures and other mechanics
relating to the process pursuant to which the Liquidity Transaction will be identified and selected. The motion envisions an open marketing process
and auction in which qualified bidders will have an opportunity to formulate a proposal as to a Liquidity Transaction and participate in an auction. Prior to the auction, the Company reserves the right to enter into a commitment with any prospective investor and to seek the approval of the Bankruptcy Court of bid protections for such party, if appropriate. Alterra also indicated that the process contemplated by its motion will be supervised by a special independent committee of its Board of Directors and will be managed by the Company's financial advisor, Cohen & Steers Capital Advisors, LLC. The Company stated that its Plan, Disclosure Statement and motion regarding bidding procedures are all subject to Bankruptcy Court approval. The motion regarding Alterra's bidding procedures is currently scheduled to be heard by the Bankruptcy Court on April 10, 2003.
 

About Alterra
Alterra offers supportive and selected healthcare services to our nation's frail elderly and is the nation's largest operator of freestanding Alzheimer's/ memory care residences. Alterra currently operates in 24 states.
 

Forward-Looking Statements
Certain of the information contained herein should be considered "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect the Company's current views with respect to certain current and future events and financial performance. Such forward-looking statements are and will be, as the case may be, subject to many risks, uncertainties and factors relating to the Company's operations and business environment which may cause the actual results of the Company to be materially different from any future results expressed or implied in such forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, the following: the ability of the Company to satisfy its operating and capital needs during the pendency of its bankruptcy case; the Company's ability to successfully negotiate necessary modifications and amendments with its secured lenders and lessors; the Company's ability to access financing needed to refinance significant pending debt maturities; the ability of the Company to continue as a going concern; the ability of the Company to develop, prosecute, confirm and consummate a Chapter 11 plan of reorganization; the Company's ability to identify and consummate a liquidity transaction in connection with its bankruptcy case providing net proceeds in amounts necessary to effectively address the projected capital and liquidity needs of the Company; risks associated with third parties seeking and obtaining court approval for the appointment of a Chapter 11 trustee or to convert the Company's bankruptcy case to a Chapter 7 liquidation; the potential adverse impact of the Company's Chapter 11 filing on the Company's relationships with its residents, vendors and employees; competition and the ability of the Company to attract private pay residents to its residences; the Company's ability to fund and maintain self insurance programs at levels necessary to address potential liability claims and satisfy the requirements of lenders and lessors; government legislation and regulation; and other risks and uncertainties as may be set forth from time to time in the Company's reports filed with the Securities and Exchange Commission.
 

CONTACT:
Alterra Healthcare Corporation
Mark Ohlendorf, Chief Financial Officer
(414) 918-5403
 

Source: Alterra Healthcare Corporation Press Release