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January 28, 2010 To The Community; We write to update you about the Mark Wentworth Home.� The Home is entering its 100th year of operation, having taken in our first Resident in 1911. We are proud of the fact that, over this time, we have been able to provide assistance to thousands of local seniors, who, for a variety of reasons, were no longer able to remain in their own homes. The Home has experienced a number of significant accomplishments in the last few years, including naming a new Executive Director, completely rebuilding and renovating the facility, increasing our community outreach efforts through the acquisition and operation of the Senior Transportation, Compass Care, and H2U programs on Parrott Avenue, and streamlining our real estate holdings through an auction held in August of 2009.� All of this has ocurred while we, as a country, have been in the throes of the most severe economic downturn since the Great Depression. That brings us to an update about the Home's finances.� When we embarked on our construction project in 2006 we entered into a complex, but routinely used financing arrangement that included the issuance of variable rate bonds.� To control the risk posed by having variable rate debt, we also entered into a contract with Lehman Brothers in New York that would convert the variable rate to a fixed rate, thereby fixing our monthly interest expense.� Again, this was a routinely used transaction and was considered to be a form of insurance policy. Unfortunately, Lehman Brothers filed for bankruptcy in October of 2008.� This not only removed the protections that we sought from Lehman against rising interest rates but has also left the Home with an unexpected claim for nearly $2million from Lehman Brothers bankruptcy trustee.� In response, the Home's Board of Trustees engaged legal counsel with significant expertise to assist us with a strategy to preserve and protect the Home's assets. A careful and detailed analysis of our options resulted in a decision to reorganize in a way to assure the long term success of the Home.� The Home's Board of Trustees voted to implement this decision at its meeting on January 27, 2010 and filed a thorough plan of reorganization with the Bankruptcy Court that day. We want to stress that we are asking the Bankruptcy Court to approve our reorganization plan quickly in order to treat our creditors fairly, while strengthening the Home for the future. The Home is not going out of business.� The Home's day-to-day operations will not be affected.� All Resident funds are safe, separately accounted for and held under trust arrangements distinct from the home's own funds. We are writing to you today to provide reassurance that this action is expected to have no impact on our residents, employees, or the community at large.� It is our expectation that it will be business as usual at the Home and that this process should be concluded in 60 to 90 days. We are confident that in the end, this unexpected challenge echoing up from Wall Street will be resolved and the Home will continue providing quality care and service to the community for another 100 years. The entire Board of Trustees is listed below and we all encourage you to contact any one of us with questions or concerns at any time. Thank you for your continued support. William C. Henson, President������������� Dennis R. Stone, Vice President�������� |