2013-05-13T16:00:23-05:00 2012-06-30 CROWE HORWATH LLP 70 West Madison Street Suite 700 Chicago IL 606024903 990 2011-07-01 030447208 THE CLARE AT WATER TOWER CLAR 7086476500 1055 W 175TH STREET HOMEWOOD IL 60430 LOUIS E ROBICHAUX IV 2013-05-13 true Nicole Bencik P00756195 3128997000 2011 2016-02-24 21:20:13Z DELOITTE FINANCIAL ADVISORY SERVICES 2200 ROSS AVE STE 1600 DALLAS TX 75201 43024437 false X X 2001 IL ORGANIZED AND OPERATED EXCLUSIVELY FOR THE CHARITABLE AND RELIGIOUS PURPOSE TO SUPPORT THE MINISTRIES OF THE FRANCISCAN SISTERS OF CHICAGO X 4 2 202 0 0 0 35000 0 10170990 13397532 50585 1960650 63060 101894 10319635 15460076 0 0 0 0 4661794 5286613 0 0 0 178342118 23010982 183003912 28297595 -172684277 -12837519 84388493 51233818 304262407 248868181 -219873914 -197634363 X THE MISSION OF THE CLARE AT WATER TOWER IS TO HONOR THE DIGNITY OF LIFE BY SERVING AS A COMPASSIONATE COMMUNITY. (CONTINUED IN SCHEDULE O.) false true 11798344 6849660 INDEPENDENT LIVING: THE CLARE AT WATER TOWER PROVIDES INDEPENDENT LIVING SERVICES TO ALLOW RESIDENTS TO ENJOY ACTIVE AND INDEPENDENT LIFESTYLES. THESE SERVICES ARE DESIGNED TO MEET THE PHYSICAL, SOCIAL AND SPIRITUAL NEEDS OF THE RESIDENTS. ACCOMODATIONS INCLUDE ONE, TWO, AND THREE BEDROOM APARTMENTS. SOME OF THE AMENITIES PROVIDED INCLUDE DINING, HOUSEKEEPING, MAINTENANCE, TRANSPORTATION, HEALTH AND FITNESS, RELIGIOUS AND LIFE ENRICHMENT ACTIVITIES, SECURITY, AND AN EMERGENCY RESPONSE SYSTEM. THE AVERAGE CENSUS IN INDEPENDENT LIVING APPROXIMATED 82 IN FISCAL 2012. 4486484 4858371 NURSING HOME CARE: THE CLARE AT WATER TOWER IS DESIGNED TO PROVIDE NURSING CARE SERVICES TO MEET THE PHYSICAL, SOCIAL, AND SPIRITUAL NEEDS OF THE RESIDENTS. SOME OF THE AMENITIES PROVIDED INCLUDE PERSONALIZED CARE PLANS, LICENSED NURSING STAFF, THREE MEALS DAILY, SNACKS, HOUSEKEEPING, MAINTENANCE, RELIGIOUS AND LIFE ENRICHMENT ACTIVITIES, AND SECURITY. THE AVERAGE CENSUS IN THE NURSING HOME APPROXIMATED 28 IN FISCAL 2012. 1510244 1689501 ASSISTED LIVING: THE CLARE AT WATER TOWER IS DESIGNED TO PROVIDE ASSISTED LIVING SERVICES TO ALLOW RESIDENTS TO RECEIVE THE ASSISTANCE THEY NEED WHILE MAINTAINING AN ACTIVE LIFESTYLE. THESE SERVICES ARE DESIGNED TO MEET THE PHYSICAL, SOCIAL AND SPIRITUAL NEEDS OF THE RESIDENTS. ACCOMODATIONS INCLUDE EFFICIENCIES, STUDIOS, AND ONE BEDROOM UNITS. SOME OF THE AMENITIES PROVIDED INCLUDE THREE MEALS DAILY, SNACKS, HOUSEKEEPING, MAINTENANCE, SECURITY, AND RELIGIOUS AND LIFE ENRICHMENT ACTIVITIES. IN ADDITION, STAFF IS AVAILABLE TO PROVIDE ASSISTANCE WITH ACTIVITIES OF DAILY LIVING TO MEET EACH RESIDENT'S NEEDS. THE AVERAGE CENSUS IN ASSISTED LIVING APPROXIMATED 25 IN FISCAL 2012. 17795072 true false false false false false false true false false true false true true false false false false false false false false false false false false false false true true false false false false false false false false false true false false false true false true false false false false true 32 0 true 202 true false false false false false false false false false false X 4 2 true true false false true true true true true false false false true true true true true false false false IL X RICHARD D TRUESDALE 7086476500 1055 W 175TH STREET STE 202 HOMEWOOD IL 60430 X JUDY AMIANO 40.00 X X 0 400912 18941 SISTER M FRANCINE LABUS OFS 1.00 X X 0 0 0 SISTER M FRANCIS CLARE RADKE OFS 1.00 X X 0 0 0 JILL KRUEGER 1.00 X 0 0 0 DENISE BOUDREAU 40.00 X 0 49465 9189 RONALD TINSLEY 40.00 X 0 123634 4338 TRACY SHEARER 40.00 X 0 61474 22049 MICHEL DESJARDINS 40.00 X 190016 0 18985 190016 635484 73502 1 false true false UNGARETTI & HARRIS LLP 70 W MADISON ST STE 3500 CHICAGO IL 606024224 LEGAL 602128 ALLIANCE REHAB INC 1520 KENSINGTON ROAD STE 110 OAK BROOK IL 60523 THERAPY SERVICES 566775 ALLIANCE PHARMACY SERVICES LLC 1520 KENSINGTON ROAD STE 110 OAK BROOK IL 60523 PHARMACY SERVICES 354504 DELOITTE FINANCIAL ADVISORY SERVICES LLP 2200 ROSS AVENUE DALLAS TX 75201 FINANCIAL ADVISOR 160000 FRANCISCAN SISTERS OF CHICAGO SERVICE CORPORATION 1055 W 175TH STREET STE 202 HOMEWOOD IL 60430 MANAGEMENT SERVICES 160000 8 0 NET RESIDENT SERVICE REVENUE 623000 13397532 13397532 0 0 0 0 13397532 2045 2045 22966 22966 0 40832 40832 0 40832 40832 29500000 241568 27322793 -241568 2177207 1935639 1935639 0 0 0 VENDING/CAFETERIA 900099 14577 14577 REBATES AND REFUNDS 900099 33896 33896 12589 0 0 12589 61062 15460076 13397532 0 2062544 0 0 0 0 237060 237060 0 4251698 3753219 498479 31787 28060 3727 439562 388027 51535 326506 274450 52056 280000 280000 2427 2427 53750 53750 0 0 58266 58266 10989891 2228392 8761499 183886 183886 1152494 903919 248575 0 0 3711567 3711567 17240 8218 9022 0 0 2297444 2297444 0 2730681 2730681 361734 361734 MEDICAL SUPPLIES 473637 473637 LETTER OF CREDIT FEES 414588 414588 BAD DEBT EXPENSE 171039 171039 RECRUITMENT 20946 139 20807 91392 49958 41434 0 28297595 17795072 10502523 0 0 783790 2124259 1912389 543318 0 0 53520000 0 0 22703740 42457204 0 0 4925256 6652355 84388493 51233818 5840395 13900414 62115581 216495000 210549966 11741541 19811431 12676260 304262407 248868181 X -219878914 -197639363 5000 5000 -219873914 -197634363 84388493 51233818 X -12837519 35077070 X X false false false X 1000 37500 5000 35000 0 78500 1962177 5755790 10170990 13397532 31286489 1364059 36039 63060 61062 1524220 0 0 1000 3363736 5796829 10269050 13458594 32889209 0 0 0 0 0 0 0 0 32889209 321655 600221 70817 65843 1058536 0 0 321655 600221 70817 65843 1058536 0 0 0 0 0 0 0 1000 3685391 6397050 10339867 13524437 33947745 0.96880 0.88070 0.03120 0.04860 X false true 0 0 0 0 0 0 0 0 INVESTMENTS EXTERNALLY DESIGNATED UNDER TRUSTEE AGREEMENTS 42457204 F 42457204 DEFERRED BOND ISSUANCE COSTS 4333193 TRUSTEE CASH COLLATERAL PURSUANT TO DEBTOR IN POSSESSION ORDER 140327 BIDDER ESCROW 2178835 6652355 0 DUE TO AFFILIATES 5702191 NOTE PAYABLE - DEBTOR IN POSSESSION 6974069 12676260 Explanation of escrow agreement Schedule D, Part IV, Line 2b THE ORGANIZATION MAINTAINED A RESIDENT ESCROW ACCOUNT AT A BANK USED TO DEPOSIT ENTRANCE FEES RECEIVED AFTER FILING FOR BANKRUPTCY. THE FUNDS IN THE ESCROW ACCOUNT WERE SUBJECT TO THE RULING OF THE BANKRUPTCY COURT. X true true false false false false false false false true false JUDY AMIANO 0 325452 0 72673 0 2787 0 7819 0 11122 0 419853 0 0 MICHEL DESJARDINS 169400 0 18191 0 2425 0 11061 0 7924 0 209001 0 0 0 Tax indemnification and gross-up payments Schedule J, Part I, Line 1a CERTAIN EMPLOYEES RECEIVE GROSS-UP PAYMENTS, WHICH ARE TREATED AS TAXABLE COMPENSATION. Arrangement used to establish the top management official's compensation Schedule J, Part I, Line 3 THE FRANCISCAN SISTERS OF CHICAGO SERVICE CORPORATION ("FSCSC"), THE SOLE CORPORATE MEMBER, HAS THE RESPONSIBILITY TO ESTABLISH COMPENSATION RANGES FOR THE ORGANIZATION'S CEO/EXECUTIVE OFFICER. THE PROCESS FOR DETERMINING THE APPROPRIATE COMPENSATION INCLUDES: 1. REVIEW AND APPROVAL BY THE EXECUTIVE COMPENSATION COMMITTE. 2. OBTAINING AND ANALYZING COMPARABLE COMPENSATION DATA FOR SIMILAR PERSONS IN FUNCTIONALLY COMPARABLE POSITIONS IN SIMILAR ORGANIZATIONS. 3. CONTEMPORANEOUS DOCUMENTATION AND RECORDKEEPING WITH RESPECT TO DELIBERATIONS AND DECISIONS REGARDING THE COMPENSATION ARRANGEMENTS. Non-fixed payments Schedule J, Part I, Line 7 DISCRETIONARY BONUSES ARE PAID UPON APPROVAL OF THE BOARD OF DIRECTORS TO SENIOR MANAGEMENT ANNUALLY, BASED ON GOALS DEFINED BY THE BOARD OF DIRECTORS. ILLINOIS FINANCE AUTHORITY 861091967 45200BTG3 2005-12-13 215227691 CONSTRUCT CLARE AT WATER TOWER false false false ILLINOIS FINANCE AUTHORITY 861091967 45200F4X4 2010-07-15 87505000 REFUNDING BONDS, SERIES 2010A AND 2010B. ORIGINAL ISSUE DATE OF BOND(S) BEING RFUNDED 11/1/2005 false false false 80441184 0 231903208 10948488 0 0 4084625 7768703 0 209101392 0 0 2008 false false true true 0 0 87508044 0 0 0 0 0 0 0 87508044 0 2010 true false true true false true true true false 0.0000 0.0000 0.0000 true false false true true false 0.0000 0.0000 0.0000 true false true false 0.0 true MARSHALL AND ISLEY 2.8 true true true false true false false false false X TOTAL PROCEEDS OF ISSUE PART II, LINE 3 12/13/2005 ISSUANCE: PROCEEDS OF ISSUE $215,227,691 INVESTMENT EARNINGS ON PROCEEDS $16,675,517 7/15/2010 ISSUANCE: PROCEEDS OF ISSUE $87,505,000 INVESTMENT EARNINGS ON PROCEEDS 3,044 HEALTH RESOURCES ALLIANCE INC SHARED BOARD MEMBERS 395592 PROVIDER OF PHARMACY/THERAPY false SEE PART III 2012-06-29 29500000 FMV - PURCHASE PRICE APPROVED UNDER CHAPTER 11 BANKRUPTCY COURT 454732822 CHICAGO SENIOR CARE LLC CO SENIOR CARE DEVELOPMENT LLC 500 MAMARONECK AVE STE 406 HARRISON NY 10528 LLC true false false false SALE OF ASSETS SCHEDULE N, PART I, LINE 1, COLUMN (A) THE CLARE AT WATER TOWER ("THE CLARE") FILED FOR RELIEF UNDER CHAPTER 11 OF THE FEDERAL BANKRUPTCY LAWS ON NOVEBMER 14, 2011. WHILE UNDER THE CONTROL OF THE BANKRUPTCY COURT, THE CLARE EXECUTED THE SALE OF CERTAIN ASSETS AND LIABILITIES. THE PROCEEDS OF THE SALE WERE SUBJECT TO THE RULINGS OF THE BANKRUPTCY. THE ASSETS SOLD CONSISTED PRIMARILY OF ACCOUNTS RECEIVABLE, PROPERTY, PLANT, EQUIPMENT, OTHER CURRENT ASSETS, AND THE LAND LEASE FOR THE PROPERTY THE CLARE WAS BUILT UPON. THE BUYER ASSUMED RESIDENCY AGREEMENT OBLIGATIONS, CERTAIN EMPLOYEE BENEFIT LIABILITIES, AND THE OBLIGATIONS UNDER THE LAND LEASE. EXCLUDED FROM THE SALE WERE CASH, DUE FROM/TO AFFILIATES, CERTAIN ACCOUNTS PAYABLE, CERTAIN ACCRUED SALARIES, AND ILLINOIS FINANCE AUTHORITY REVENUE BOND OBLIGATIONS. Interested person who became a director or trustee of transferee organization Schedule N, Part II, Line 2a MICHEL DESJARDINS, THE EXECUTIVE DIRECTOR, REPORTED IN THIS RETURN AS A KEY EMPLOYEE, WILL CONTINUE AS THE EXECUTIVE DIRECTOR IN TRANSFEREE ORGANIZATION. VALUE STATEMENT FORM 990, PART III, LINE 1 THE VALUES OF THE CLARE AT WATER TOWER, INC. INCLUDE: 1. RESPECT: SEEING THE FACE OF GOD REFLECTED IN THOSE WE SERVE; 2. SERVICE: RESPONDING TO THE NEEDS OF OTHERS BEFORE OUR OWN; 3. DEDICATION: PASSIONATELY FULFILLING THIS CALL ENTRUSTED TO US; 4. STEWARDSHIP: RESPONSIBLY USING OUR RESOURCES, AWARE THAT ALL CREATION IS A GIFT; 5. JOY: GIVING FROM YOUR HEART GIFT OF CARE FORM 990, PART III, LINE 1 GIFT OF CARE: FOR MORE THAN 110 YEARS, THE FRANCISCAN SISTERS OF CHICAGO AND THE CLARE AT WATER TOWER HAVE FULFILLED THE DESPERATE NEED OF THE ELDERLY AND THE UNDERSERVED. THE GIFT OF CARE PROGRAM IS ONE OF THE WAYS DEVELOPED TO PROVIDE ADDITIONAL OUTREACH SERVICES TO THE UNDERPRIVILEGED POPULATION. LONG-TERM CARE IS VERY EXPENSIVE AND MANY WILL NOT BE ABLE TO PAY FOR ALL OF THE NECESSARY SERVICES OUT OF HIS OR HER OWN INCOME AND RESOURCES. THAT'S WHERE THE GIFT OF CARE CAN HELP. COMMITMENT: THE GIFT OF CARE IS A COMMITMENT BY THE CLARE AT WATER TOWER TO UNDERWRITE ALL OR A PORTION OF A RESIDENT'S CARE FOR A SPECIFIC PERIOD OF TIME. IT IS BASED UPON DEFINED CRITERIA. AS A NOT-FOR-PROFIT ORGANIZATION, THE CLARE AT WATER TOWER PROMOTES AND CARES FOR THE INTERESTS OF OLDER ADULTS IN AN ENVIRONMENT OF DIGNIFIED LIVING, CARING AND COMPASSION. IN THE SPIRIT AND TRADITION OF THE CATHOLIC CHURCH, THE FRANCISCAN SISTERS OF CHICAGO AND OUR FOUNDRESS, MOTHER MARY THERESA DUDZIK, WE HAVE BEEN OF SERVICE TO THE NEEDY AND THE POOR FOR OVER 110 YEARS. THIS PROGRAM IS ONE OF THE WAYS WE REACH OUT SPECIFICALLY TO THOSE WHO NEED US THE MOST. THE CLARE AT WATER TOWER STRIVES TO PROVIDE THE GIFT OF CARE PROGRAM FOR APPLICANTS AND EXISTING RESIDENTS, WHO DEPARATELY NEED FINANCIAL ASSISTANCE WITH THE EXPENSES ASSOCIATED WITH OUR COMPASSIONATE SERVICES. DEPENDING ON THE INDIVIDUAL CIRCUMSTANCES, A PERSON MAY BE EITHER FULLY OR PARTIALLY SUPPORTED FINANCIALLY. CHARITY CARE PROVIDED BY THE CLARE AT WATER TOWER IN FISCAL 2012 AMOUNTED TO $32,000. VISION STATEMENT FORM 990, PART III, LINE 1 THE CLARE AT WATER TOWER'S VISION IS TO BECOME THE OPTIMAL MEANS, WHICH FREES ALL THOSE WE SERVE TO EXPERIENCE THE FULLNESS OF THEIR LIVES. THE CLARE AT WATER TOWER IS OPERATED SOLELY FOR THE CHARITABLE AND RELIGIOUS PURPOSE OF THE FRANCISCAN SISTERS OF CHICAGO. THE CHARISM OF THE FRANCISCAN SISTERS OF CHICAGO IS TO DEVOTE THEMSELVES TO THE MINISTRY OF PROVIDING CARE AND HOUSING TO THE ELDERLY AND INFIRM. THE CLARE AT WATER TOWER OFFERS SERVICES TO MEET BOTH THE PHYSICAL AND SPIRITUAL NEEDS OF THE RESIDENTS. IN FULFILLMENT OF THIS MINISTRY THE CLARE AT WATER TOWER IS DESIGNED TO PROVIDE INDEPENDENT LIVING, ASSISTED LIVING, AND NURSING HOME SERVICES. Significant changes in program services Form 990, Part III, Line 3 THE CLARE AT WATER TOWER ("THE CLARE") FILED FOR RELIEF UNDER CHAPTER 11 OF THE FEDERAL BANKRUPTCY LAWS ON NOVEBMER 14, 2011. WHILE UNDER THE CONTROL OF THE BANKRUPTCY COURT, THE CLARE EXECUTED THE SALE OF CERTAIN ASSETS AND LIABILITIES. THE PROCEEDS OF THE SALE WERE SUBJECT TO THE RULINGS OF THE BANKRUPTCY. THE ASSETS SOLD CONSISTED PRIMARILY OF ACCOUNTS RECEIVABLE, PROPERTY, PLANT, EQUIPMENT, OTHER CURRENT ASSETS, AND THE LAND LEASE FOR THE PROPERTY THE CLARE WAS BUILT UPON. THE BUYER ASSUMED RESIDENCY AGREEMENT OBLIGATIONS, CERTAIN EMPLOYEE BENEFIT LIABILITIES, AND THE OBLIGATIONS UNDER THE LAND LEASE. EXCLUDED FROM THE SALE WERE CASH, DUE FROM/TO AFFILIATES, CERTAIN ACCOUNTS PAYABLE, CERTAIN ACCRUED SALARIES, AND ILLINOIS FINANCE AUTHORITY REVENUE BOND OBLIGATIONS. THE OBLIGATIONS UNDER THE NONRECOURSE DEBT OF THE CLARE WERE THE SOLE OGLIGATION OF THE CLARE. NEITHER THE FRANCISCAN SISTERS OF CHICAGO SERIVCE CORPORATION ("SERVICE CORPORATION"), THE SOLE CORPORATE MEMBER, NOR ANY OF ITS AFFILIATES WERE OBLIGATED UNDER THE CLARE'S DEBT. UPON FILING FOR BANKRUPTCY , THE SERVICE CORPORATION DECONSOLIDATED THE CLARE. THE EFFECTIVE DATE OF THE SALE WAS JUNE 29, 2012. THE CLARE CONTINUED TO PROVIDE PROGRAM SERVICES THROUGH THE DATE OF THE SALE. Family/business relationships amongst interested persons Form 990, Part VI, Section A, Line 2 JUDY AMIANO, JILL KRUEGER, AND RONALD TINSLEY - BUSINESS RELATIONSHIP Delegation of management duties Form 990, Part VI, Section A, Line 3 THE CLARE AT WATER TOWER ("THE CLARE") FILED FOR RELIEF UNDER CHAPTER 11 OF THE FEDERAL BANKRUPTCY LAWS ON NOVEMBER 14, 2011. WHILE UNDER THE CONTROL OF THE BANKRUPTCY COURT, MANAGEMENT DECISIONS WERE SUBJECT TO THE APPROVAL OF THE BANKRUPTCY COURT. WHILE UNDER CONTROL OF THE BANKRUPTCY COURT, THE CLARE EXECUTED THE SALE OF CERTAIN ASSETS AND LIABILITIES. THE EFFECTIVE DATE OF THE SALE WAS JUNE 29, 2012. THE CLARE CONTINUED TO PROVIDE PROGRAM SERVICES THROUGH THE DATE OF THE SALE. EFFECTIVE JULY 1, 2012 DELOITTE FINANCIAL ADVISORY SERVICES, LLP WAS APPOINTED PLAN ADMINISTRATOR FOR CWT LIQUIDATION COMPANY, NFP, TO MANAGE THE TRANSACTIONS FOR THE CORPORATION DURING THE WINDDOWN OF THE BANKRUPTCY PROCEEDINGS. Classes of members or stockholders Form 990, Part VI, Section A, Line 6 THE SOLE CORPORATE MEMBER OF THE CLARE AT WATER TOWER IS THE FRANCISCAN SISTERS OF CHICAGO SERVICE CORPORATION ("FSCSC"). THE MEMBERS OF FSCSC SHALL CONSIST OF THE GENERAL MINISTER AND THE MEMBERS OF THE GENERAL COUNCIL OF THE FRANCISCAN SISTERS OF CHICAGO. THE MEMBERS SHALL ACT IN A STEWARDSHIP CAPACITY AND ENSURE THAT ALL ACTIONS OF THE CLARE AT WATER TOWER ARE CONSISTENT WITH THE PURPOSES OF FSCSC AND THE ETHICAL AND RELIGIOUS PRINCIPLES OF THE FRANCISCAN SISTERS OF CHICAGO AND IN FURTHERANCE OF THEIR APOSTOLATES AND THE CATHOLIC CHURCH. Members or stockholders electing members of governing body Form 990, Part VI, Section A, Line 7a THE SOLE CORPORATE MEMBER, THE FRANCISCAN SISTERS OF CHICAGO SERVICE CORPORATION, HAS THE RESERVE POWER TO APPOINT AND REMOVE DIRECTORS AND FILL VACANCIES ON THE BOARD OF DIRECTORS OF THE CLARE AT WATER TOWER. Decisions requiring approval by members or stockholders Form 990, Part VI, Section A, Line 7b THE MEMBER, THE FRANCISCAN SISTERS OF CHICAGO SERVICE CORPORATION ("FSCSC"), SHALL HAVE THE FOLLOWING RESERVED POWERS: (A) TO APPROVE THE CORPORATION'S STRATEGIC PLANS, ANNUAL, OPERATING, CAPITAL AND CASH FLOW BUDGETS AND SIMILAR DOCUMENTS DEVELOPED BY THE BOARD. (B) GOVERNING DOCUMENT AMENDMENTS AND GOVERNANCE 1. TO APPROVE ANY AMENDMENTS TO THE ARTICLES OF INCORPORATION, BYLAWS OR SIMILAR GOVERNING DOCUMENTS OF THE CORPORATION. 2. TO APPOINT AND REMOVE DIRECTORS AND FILL VACANCIES ON THE BOARD OF DIRECTORS. 3. TO APPOINT OR REMOVE THE CHAIRPERSON AND THE PRESIDENT/CEO OF THE CLARE AT WATER TOWER. (C) SIGNIFICANT ACTIONS. 1. TO APPROVE ANY MERGER, CONSOLIDATION, DISSOLUTION OR LIQUIDATION OF THE CLARE AT WATER TOWER, OR ANY AFFILIATE, OTHER THAN A MERGER OR CONSOLIDATION SOLELY BETWEEN EXISTING AFFILIATES. SUBJECT TO APPROVAL OF THE MEMBERS OF FSCSC. 2. TO APPROVE THE PURCHASE, SALE, DONATION, LEASE, MORTGAGE, OR ANY OTHER ACQUISITION, DISPOSITION OR ENCUMBRANCE OF ANY ASSETS OF THE CLARE AT WATER TOWER , EXCEPT WITH RESPECT TO TRANSACTIONS WITHIN LIMITS DELEGATED TO THE CLARE. SUBJECT TO APPROVAL OF THE MEMBERS OF FSCSC. 3. TO APPROVE THE ESTABLISHMENT, TERMINATION, TRANSFER OR OTHER ACQUISITION OR DISPOSITION OF ANY MAJOR MINISTRY, WORK OR SIMILAR PROGRAM BY THE CLARE. SUBJECT TO APPROVAL OF THE MEMBERS OF FSCSC. 4. TO APPROVE THE CREATION OF ANY NEW AFFILIATE OR ANY AFFILIATION OF THE CLARE WITH ANOTHER ENTITY. SUBJECT TO APPROVAL OF THE MEMBERS OF FSCSC. 5. TO APPROVE THE INCURRENCE OF INDEBTEDNESS, THE MAKING OF LOANS TO OTHER ENTITIES OR THE GUARANTY OF ANY INDEBTEDNESS OF OTHERS, BY THE CLARE, FOR AMOUNTS IN EXCESS OF SPECIFIED AMOUNTS. 6. TO ESTABLISH DOLLAR LIMITS BELOW WHICH THE CLARE MAY AUTHORIZE FINANCIAL EXPENDITURES, INCLUDING CONTRACTS INVOLVING SUCH EXPENDITURES. 7. TO ESTABLISH DOLLAR LIMITS BELOW WHICH THE CLARE MAY AUTHORIZE LITIGATION SETTLEMENTS OR ANY RELEASE OR CANCELLATION BY THE CLARE OF A CLAIM OR RIGHT OF ACTION AGAINST ANOTHER PARTY. 8. TO APPROVE COMPLIANCE PLANS, ACCOUNTING, INVESTING AND HUMAN RESOURCES POLICIES, EMPLOYEE PENSION AND OTHER BENEFIT PROGRAMS AND OTHER MATTERS TO THE EXTENT DETERMINED APPROPRIATE BY THE FSCSC. 9. TO APPROVE ETHICISTS, AUDITORS, LEGAL COUNSEL AND OTHER SIGNIFICANT CONSULTANTS OF THE CLARE. 10. TO ESTABLISH COMPENSATION RANGES FOR EMPLOYEES OF THE CLARE, TO THE EXTENT DEEMED APPROPRIATE. Review of form 990 by governing body Form 990, Part VI, Section B, Line 11b MANAGEMENT PRESENTED A FINAL DRAFT OF THE COMPLETED FORM 990 TO THE AUDIT AND FINANCE COMMITTEE OF THE BOARD OF DIRECTORS PRIOR TO ITS FILING WITH THE INTERNAL REVENUE SERVICE. IN ADDITION, THE FINAL DRAFT WAS PRESENTED TO DELOITTE FINANCIAL ADVISORY SERVICES, PLAN ADMINISTRATOR FOR CWT LIQUIDATION CO. Conflict of interest policy Form 990, Part VI, Section B, Line 12c AS PROVIDED FOR IN THE CONFLICT OF INTEREST POLICY, IT IS THE RESPONSIBILITY OF THE BOARD OR COMMITTEE CHAIR TO ENSURE THAT EACH DIRECTOR, OFFICER, AND MEMBER OF A BOARD COMMITTEE ANNUALLY SIGNS AN FSCSC APPROVED CONFLICT OF INTEREST DISCLOSURE STATEMENT. COPIES OF ALL SIGNED STATEMENTS ARE FORWARDED TO THE CORPORATE DIRECTOR OF COMPLIANCE AND STANDARDS. KEY EMPLOYEES AND HIGHEST COMPENSATED EMPLOYEES ARE REQUIRED TO COMPLETE AN ANNUAL CONFLICT OF INTEREST STATEMENT THAT IS REVIEWED BY THEIR DIRECT SUPERVISOR. POTENTIAL CONFLICTS OF INTEREST OF BOARD MEMBERS ARE BROUGHT TO THE ATTENTION OF THE BOARD CHAIR. AFTER DISCUSSION WITH THE INTERESTED PERSON, HE OR SHE SHALL LEAVE THE BOARD OR COMMITTEE MEETING WHILE A DETERMINATION OF A CONFLICT OF INTEREST IS DISCUSSED AND VOTED ON. PROPOSED TRANSACTIONS WITH INTERESTED PERSONS OF THE BOARD OF DIRECTORS OR COMMITTEES REQUIRES THE APPROVAL OF THE BOARD PRIOR TO ENTERING INTO THE PROPOSED TRANSACTION OR ARRANGEMENT. THE INTERESTED PERSON SHALL NOT BE PRESENT DURING THE PRESENTATION OR THE VOTE ON THE PROPOSED TRANSACTION OR ARRANGEMENT. KEY EMPLOYEES, OFFICERS AND HIGHEST COMPENSATED EMPLOYEES ARE REQUIRED TO COMPLETE AN ANNUAL CONFLICT OF INTEREST STATEMENT THAT IS REVIEWED BY THEIR DIRECT SUPERVISOR. THE SUPERVISOR WILL WORK WITH THE COMPLIANCE OFFICER AND POSSIBLY HUMAN RESOURCES IN TAKING APPROPRIATE STEPS TO ADDRESS THE POTENTIAL CONFLICT. PROCESS USED TO ESTABLISH COMPENSATION OF TOP MANAGEMENT OFFICIAL FORM 990, PART VI, LINE 15A THE CLARE'S TOP MANAGEMENT OFFICIAL IS PAID BY THE FRANCISCAN SISTERS OF CHICAGO SERVICE CORPORATION ("FSCSC"), A RELATED TAX-EXEMPT ORGANIZATION. THE BOARD OF DIRECTORS OF FSCSC HAS ADOPTED AN EXECUTIVE COMPENSATION PHILOSOPHY TO ENABLE FSCSC TO RECRUIT, RETAIN, DEVELOP AND MOTIVATE CAPABLE AND COMMITTED EXECUTIVE LEADERS ESSENTIAL TO SUSTAINING ITS MISSION AND ACHIEVING ITS VISION AND ORGANIZATIONAL GOALS. THE BOARD OF DIRECTORS APPOINTED AN EXECUTIVE COMPENSATION COMMITTEE OF THE BOARD TO MEET THIS RESPONSIBILITY. THE EXECUTIVE COMPENSATION COMMITTEE WILL CONTINUALLY MONITOR THE COMPENSATION STRATEGY TO REFLECT CHANGES IN MARKET CONDITIONS AND EXECUTIVE NEEDS. THIS STRATEGY AND THE REWARD ELEMENTS SERVE AS A "ROAD MAP" FOR THE ON-GOING ADMINISTRATION OF THE COMPENSATION PROGRAMS. THE BOARD HAS ADOPTED A PHILOSOPHY OF VIEWING EXECUTIVE COMPENSATION IN ITS TOTALITY, CONSIDERING ALL REWARD ELEMENTS - BOTH EXTRINSIC AND INTRINSIC, PROVIDED TO EXECUTIVES THE EXECUTIVE COMPENSATION COMMITTEE MAKES THE RECOMMENDATION ON THE COMPENSATION FOR THE CHIEF EXECUTIVE OFFICER AND PRESIDENT WITH FINAL APPROVAL FROM THE SPONSOR BOARD AND THE FSCSC BOARD OF DIRECTORS. THE ANNUAL REVIEW PROCESS FOR DETERMINING THE APPROPRIATE COMPENSATION OF THE TOP MANAGEMENT OFFICIAL INCLUDES: 1. OBTAINING AND ANALYZING COMPARABLE COMPENSATION DATA FOR SIMILAR PERSONS IN FUNCTIONALLY COMPARABLE POSITIONS IN SIMILAR ORGANIZATIONS. 2. CONTEMPORANEOUS DOCUMENTATION AND RECORDKEEPING WITH RESPECT TO DELIBERATIONS AND DECISIONS REGARDING THE COMPENSATION ARRANGEMENTS. 3. THE PROCESS OF OBTAINING COMPARABLE COMPENSATION DATA, AS OUTLINED ABOVE, WAS LAST PERFORMED IN FEBRUARY 2010. PROCESS USED TO ESTABLISH COMPENSATION OF OTHER OFFICERS/KEY EMPLOYEES FORM 990, PART VI, LINE 15B THE CLARE'S OTHER OFFICERS ARE PAID BY THE FRANCISCAN SISTERS OF CHICAGO SERVICE CORPORATION ("FSCSC"), A RELATED TAX-EXEMPT ORGANIZATION. FSCSC'S CHIEF EXECUTIVE OFFICER AND PRESIDENT, MAKES RECOMMENDATIONS TO THE EXECUTIVE COMPENSATION COMMITTEE FOR THE ESTABLISHEMENT OF SALARY RANGES AND SALARIES FOR THE CHIEF FINANCIAL OFFICER AND CHIEF OPERATING OFFICER OF THE ORGANIZATION WITH FINAL APPROVAL FROM THE FSCSC BOARD OF DIRECTORS. THE VICE PRESIDENT OF HUMAN RESOURCES IS RESPONSIBLE FOR MAKING RECOMMENDATIONS AND ESTABLISHING COMPENSATION RANGES FOR THE POSITIONS OF VICE PRESIDENT OF MINISTRY DEVELOPMENT; VICE PRESIDENT OF HUMAN RESOURCES; VICE PRESIDENT OF MISSION INEGRATION AND PASTORAL CARE , VICE PRESIDENT OF CLINICAL SERVICES, AND KEY EMPLOYEES OF THE CLARE WITH THE APPROVAL OF THE CHIEF EXECUTIVE OFFICER AND PRESIDENT. FSCSC'S VICE PRESIDENT OF HUMAN RESOURCES HAS THE RESPONSIBILITY TO ESTABLISH COMPENSATION RECOMMENDATIONS FOR THE ORGANIZATION'S OTHER KEY EMPLOYEES. THE PROCESS FOR DETERMINING THE APPROPRIATE COMPENSATION OF EACH POSITION INCLUDES: 1. HUMAN RESOURCE DEPARTMENT OBTAINS AND ANALYZES COMPARABLE COMPENSATION DATA FOR SIMILAR PERSONS IN FUNCTIONALLY COMPARABLE POSITIONS IN SIMILAR ORGANIZATIONS. THE PROCESS OF OBTAINING COMPARABLE COMPENSATION DATA WAS LAST PERFORMED IN 2010. 2. CHIEF EXECUTIVE OFFICER AND PRESIDENT REVIEWS AND MAKES FINAL APPROVAL OF COMPENSATION RANGES AND SALARIES. 3. APPROVED COMPENSATION IS SHARED WITH THE EXECUTIVE COMPENSATION COMMITTEE. 4. CONTEMPORANEOUS DOCUMENTATION AND RECORDKEEPING WITH RESPECT TO DELIBERATIONS AND DECISIONS REGARDING THE COMPENSATION ARRANGEMENTS. Governing documents, conflict of interest policy and financial statements available to the public Form 990, Part VI, Section C, Line 19 THE ORGANIZATION MAKES ITS GOVERNING DOCUMENTS, CONFLICT OF INTEREST POLICY AND FINANCIAL STATEMENTS AVAILABLE TO THE PUBLIC IN ACCORDANCE WITH APPLICABLE LAWS AND REGULATIONS. Average number of hours devoted per week to related organization Form 990, Part VII, Section A, Column B THE FRANCISCAN SISTERS OF CHICAGO SERVICE CORPORATION ("FSCSC") IS THE SOLE CORPORATE MEMBER OF FRANCISCAN COMMUNITIES, INC., UNIVERSITY PLACE, INC., FRANCISCAN COMMUNITIES ST. MARY OF THE WOODS, INC., FRANCISCAN COMMUNITIES VILLA DE SAN ANTONIO,INC., THE CLARE AT WATER TOWER, INC., FRANCISCAN COMMUNITY SERVICES, INC., FRANCISCAN COMMUNITY BENEFIT SERVICES, INC., ST. JUDE HOUSE, INC., ST. JOSEPH SENIOR HOUSING, INC., AND SAMC, INC.. THE PURPOSE OF FSCSC IS TO PROVIDE PROGRAM AND ADMINISTRATIVE SUPPORT FOR ITS AFFILIATES INCLUDING OPERATIONAL OVERSIGHT, FINANCIAL MANAGEMENT, TREASURY MANAGEMENT, INFORMATION TECHNOLOGY, COMPLIANCE, MARKETING, HUMAN RESOURCES, RESIDENT SERVICES, AND CONSTRUCTION AND DEVELOPMENT MANAGEMENT. FSCSC IS THE PAYMASTER FOR THE OFFICERS AND KEY EMPLOYEES THAT PROVIDE THESE SERVICES. THE AVERAGE HOURS PER WEEK IDENTIFIED IN PART VII REFLECT THE TOTAL HOURS SPENT ON ALL AFFILIATES. Other changes in net assets or fund balances Form 990, Part XI, Line 5 NET UNREALIZED GAINS (LOSSES) ON INVESTMENTS - 231353; UNRESTRICTED NET ASSET TRANSFER - 500000; PRIOR PERIOD ADJUSTMENT - IMPAIRMENT - 34345717; PRIOR PERIOD ADJUSTMENT FORM 990, PART XI, LINE 5 2011 990 RETURN WAS SUBMITTED PRIOR TO FINALIZATION OF THE AUDIT. AN AUDIT ADJUSTMENT WAS MADE ADJUSTING THE AMOUNT OF THE ALLOWANCE FOR IMPAIRMENT LOSS IN THE AMOUNT OF $34,345,717 AFTER THE SUMISSION OF THE 990 TAX RETURN. AUDITED FINANCIAL STATEMENTS FORM 990, PART XII, LINE 2B THE CLARE AT WATER TOWER ("THE CLARE") FILED FOR RELIEF UNDER CHAPTER 11 OF THE FEDERAL BANKRUPTCY LAWS ON NOVEMBER 14, 2011. WHILE UNDER CONTROL OF THE BANKRUPTCY COURT, THE CLARE WAS NOT REQUIRED TO FILE AUDITED FINANCIAL STATEMENTS. UPON FILING FOR BANKRUPTCY, THE FRANCISCAN SISTERS OF CHICAGO SERVICE CORPORATION ("SERVICE CORPORATION") DECONSOLIDATED THE CLARE. THEREFORE, THE CLARE WAS NO LONGER INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENTS OF THE SERVICE CORPORATION. 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