Second largest nursing home chain to file for bankruptcy
Quality Care, a real estate investment trust, announced the agreement on Friday, saying it would become the full owner of Toledo, Ohio-based ManorCare’s skilled nursing, assisted living, hospice and homecare businesses across the United States, according to Reuters.
Shares of Quality Care, which will give up its REIT status, jumped 23.4 percent to $15.55 on the New York Stock Exchange.
HCR ManorCare had owed its landlord more than $300 million in rent, according to regulatory filings. It is one of several large U.S. nursing home chains that have struggled to keep up with rent payments due to changing Medicaid and Medicare reimbursements for nursing homes, rising costs and low occupancy rates.
“This agreement facilitates a consensual resolution that provides stability and flexibility for the business. We see this as the best available opportunity to improve a challenging situation,” Quality Care Chief Executive Mark Ordan said.
ManorCare is owned by private equity firm Carlyle Group (CG.O), which bought the chain in a 2007 leveraged buyout for $6.3 billion. In a move to unlock value, it sold the properties to real estate investment trust HCP Inc (HCP.N) for $6.1 billion in 2010.
Read the full story at Reuters.
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Topics: Executive Leadership , Finance , Operations , Uncategorized