Alterra Plan of Reorganization Confirmed by Bankruptcy Court; Company Plans To Emerge From Bankruptcy In December.

Business Editors

MILWAUKEE--(BUSINESS WIRE)--Nov. 26, 2003

Alterra Healthcare Corporation (OTCBB:ATHC) ("Alterra" or the "Company") announced today that the United States Bankruptcy Court for the District of Delaware has entered an order confirming its Second Amended Plan of Reorganization. This will position the Company to emerge from bankruptcy over the next several weeks upon the closing of the transactions described in the Plan.

The Alterra plan of reorganization contemplates: (i) a $76 million equity investment in reorganized Alterra by FEBC-ALT Holdings Inc., a subsidiary of a joint venture formed by Fortress Investment Group LLC, Emeritus Corporation and NW Select LLC; (ii) the reorganized Alterra will continue to operate 305 residences located in 21 states financed primarily by pre-existing mortgage loan and sale lease-back financing arrangements; and (iii) the extinguishment of substantially all of Alterra's pre-petition unsecured debt as well as its common stock and other equity securities in consideration of an aggregate cash distribution payable to unsecured creditors of up to $23 million, subject to adjustment based on the terms of the plan of reorganization. Consummation of the plan of reorganization and the FEBC investment, which the Company anticipates completing in December 2003, is subject to satisfaction of various conditions, including but not limited to securing certain regulatory approvals.

Mark Ohlendorf, President of Alterra, noted, "We are pleased to announce the anticipated completion of our restructuring activities. With support of our secured lenders and lessors and the substantial equity investment by our new owners, we were able to complete the Chapter 11 process in less than twelve months. We appreciate the consistent support we received from our employees and resident families as we completed this necessary financial restructuring, and anticipate that Alterra will again be a vibrant, healthy company committed to providing the best possible care to our residents. I am very proud of all of the employees in the Company. Their level of dedication and commitment to our corporate mission throughout these challenging times has been truly inspiring."

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. After the restructuring, Alterra will operate in 21 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 access financing needed to refinance significant pending debt maturities; the ability of the Company to consummate its Chapter 11 plan of reorganization and the pending FEBC investment transaction to address the projected capital and liquidity needs of the Company; 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