CHICAGO — Almost out of cash to keep operating, an upscale retirement facility in downtown Chicago financed with $229 million of bonds filed for Chapter 11 bankruptcy this week after the failure of negotiations with a group of investors aimed at buying the facility breathing room.

The Clare at Water Tower filed its petition, paving the way for a restructuring of its debts or the facility’s sale, in the U.S. Bankruptcy Court for the Northern District of Illinois Eastern Division on Tuesday. The amount bondholders stand to recoup in either a restructuring or an asset sale remains unclear, several market participants said.

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