The prepackaged, $7.1 billion Chapter 11 bankruptcy plan filed in early March by HCR ManorCare, was approved Friday in U.S. Bankruptcy Court in Wilmington, DE.
ManorCare’s current landlord, Bethesda, MD-based real estate investment trust Quality Care Properties, previously said that it expects the transaction to be completed during the third quarter. When that occurs, QCP’s claims against ManorCare under its master lease and guaranty, including a deferred rent obligation and unpaid rent, will be exchanged for 100% equity ownership of ManorCare, with ManorCare becoming a wholly owned indirect subsidiary of QCP.
Additionally, private equity fund Carlyle Group will lose its equity stake, and Paul Ormond, who departed from his position as ManorCare president and CEO in September, will receive $116.7 million in previously deferred compensation, the Toledo Blade reported. QCP previously said that it expects to no longer qualify for status as a REIT after the transaction.
ManorCare, which according to QCP operates more than 500 assisted living, memory care, skilled nursing and rehabilitation, outpatient rehabilitation clinics, hospice and home care businesses, is based in Toledo, OH.
QCP also previously announced that Guy Sansone, managing director at professional services firm Alvarez & Marsal, will become ManorCare’s post-bankruptcy CEO. He will oversee the sale of 74 skilled nursing facilities, according to Reuters.
Laura Linynsky will become chief financial officer, treasurer and executive vice president, according to the Blade, and Richard Parr, who has been ManorCare’s general counsel since 2006, will become secretary and vice president. Linynsky is QCP’s senior vice president and a former chief operating officer of Sunrise Senior Living.