Tag Archives: manorcare

Quality Care REIT Taking Control Of HCR ManorCare and its 500 Facilities

Quality Care Quiting REIT Status; HCR ManorCare Expected to File for Ch. 11 Personal bankruptcy

Quality Care Properties Inc. (NYSE: QCP) and HCR ManorCare Inc. have actually reached a contract for Quality Care to take control over HCR ManorCare, including its skilled nursing, assisted living, hospice and homecare services.

As part of the agreement, Quality Care will drop its legal claims versus HCR ManorCare for delayed and unpaid rent in exchange for 100% equity ownership of HCR ManorCare.

The offer likewise ends Quality Care’s plans to qualify as a REIT, since it ends up being the renter in the residential or commercial properties it currently owns.

The transaction will happen through a prepackaged strategy of reorganization under which HCR ManorCare will willingly apply for Chapter 11 personal bankruptcy reorganization in the coming days. The deal will then undergo personal bankruptcy court approval, which is anticipated throughout the 2nd quarter and the deal is expected to be finished throughout the third quarter of 2018.

HCR ManorCare offers short-term, post-hospital services and long-term care with a network of more than 500 proficient nursing and rehab centers, memory care neighborhoods, assisted living facilities, outpatient rehabilitation centers, and hospice and home healthcare agencies.

“We see this as the best available chance to improve a tough circumstance,” said Mark Ordan, CEO of Quality Care. “We thought about every possible option and determined that entering this contract to take direct ownership of our occupant best positions QCP to reposition business to realize the potential of its properties for QCP shareholders.”

The deal is expected to recapitalize HCR ManorCare and provide stability and flexibility to better respond to today’s quickly altering post-acute care industry.

Post-acute/skilled nursing operators have actually been facing a number of ongoing obstacles, including:

A shift far from a conventional cost for service model towards new managed care designs with lowered payments and lengths of stays, particularly managed Medicare plans;
Increased competitors from alternative healthcare services such as home-based health companies and life-care in the house, community-based service programs, along with increased readily available senior housing, retirement home and convalescent centers; and
Increased regulative analysis on government compensations.

Effective immediately, Person Sansone, a handling director and chairman of the Healthcare Market Group at global expert services firm Alvarez & & Marsal, and Laura Linynsky, Quality Care’s senior vice president and a former chief running officer of Sunrise Senior citizen Living, will serve on behalf of Quality Care as consultants and work with the HCR ManorCare management team in the shift.

After the offer closes, Sansone is anticipated to assume the role of HCR ManorCare’s CEO and Linynsky is anticipated to work as HCR ManorCare’s interim chief financial officer.

Quality Care Properties’ Negotiations with HCR ManorCare Break Down

Conversations by Quality Care Characteristic (NYSE: QCP) to take control of troubled experienced nursing center operator HCR ManorCare Inc. have reached an impasse, according to a brand-new filing with federal securities regulators.

Quality Care Characteristic (NYSE: QCP )submitted an update with the & Securities & Exchange Commission stating that “celebrations have actually been unable to reach contract on terms of an out-of-court acquisition.”

Last month, Quality Care Characteristic announced it remained in discussions with HCR ManorCare– its primary renter– about HCR ManorCare’s default under its master lease. Quality Care was looking for a dedication from HRC ManorCare’s loan providers for acquisition financing of up to $500 million to be used to refinance HRC’s current financial obligation and supply working capital. Such a move could have triggered QCP to lose its REIT status.

Quality Care Residence also reported this week that since the close of company on July 3, 2017, HCR cannot make minimum rent payments for the month of July.

QCP stated personal discussions about restructuring options are continuing.

“QCP believes it is necessary that any restructuring offer the QCP-owned centers and their experienced and committed workers with the liquidity, resources, capital expense and other support needed to make sure the long-lasting connection of exceptional client and resident care,” the REIT reported.

HCR ManorCare is the occupant and operator of substantially all QCP’s residential or commercial properties which represents 94% of the REIT’s overall earnings.

Quality Care Characteristic was formed in 2016 when HCP Inc. (NYSE: HCP) spun off HCR ManorCare and other health care-related residential or commercial properties. While freeing itself from ManorCare made it possible for HCP to concentrate on higher-growth opportunities in its varied healthcare realty portfolio, it saddled Quality Care Characteristics with the prospect of a difficult turn-around situation.

As of March 31, Quality Care’s holdings consisted of 257 post-acute/skilled nursing residential or commercial properties, 61 memory care/assisted living properties, one surgical healthcare facility and one medical office building across 29 states. HCR Manor Care leases 292 of the 320 homes.

HCR ManorCare runs more than 500 knowledgeable nursing and rehab centers, memory care communities, helped living centers, outpatient rehab centers, and hospice and home health care firms across the country under the names of Heartland, ManorCare Health Services and Arden Courts.

Following Quality Care Properties’ announcement last month, score company Moody’s Investors Service reduced QCP’s and exposed the potential for more downgrade

The rankings downgrade shows Moody’s view that continued interruptions in capital from HCR will lead to product degeneration in QCP’s operating revenues and liquidity in the next 12-18 months.

The ongoing rankings review will concentrate on QCP’s ultimate tactical instructions, its ability to reach an out-of-court lease restructuring with HCR and the impact of the restructuring on QCP’s cash flows and HCR’s EBITDAR coverage.