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.