AdCare reorganization vote slated for Sept. 20

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AdCare reorganization vote slated for Sept. 20
AdCare reorganization vote slated for Sept. 20

Shareholders will vote Sept. 20 on a proposed reorganization after which AdCare Health Systems would be known as Regional Health Properties, Allan Rimland, the self-managed real estate investment company's president, CEO and chief financial officer, told participants in a second-quarter earnings call Monday.

Bill McBride, the company's former chairman and CEO, originally had announced the company's plans in March during its fourth-quarter 2016 earnings call. McBride was fired in April after AdCare said that an internal investigation revealed that he had lied about his educational background.

The September gathering for the reorganization vote will be a special meeting, Rimland said. Regional Health Properties is the name of a subsidiary created by AdCare in February, so the change would represent a merging of AdCare with and into Regional Health Properties. If the merger is approved by shareholders, then the company will begin trading under the ticker symbol RHE shortly thereafter, instead of ADK, Rimland said.

Adopting certain charter provisions and restricting the ownership and transfer of common stock through the reorganization, he said, “will position to the company to regain compliance with certain continued listing requirements in the New York Stock Exchange, formally known as the New York Stock Exchange MKT.”

Under these provisions, AdCare also would be better positioned to become a real estate investment trust if the board determines in this future that doing so would be in the best interest of the company and shareholders, Rimland said.

“This reorganization also provides us the opportunity to continue our business under a name that better reflects our new business model as a healthcare property holding and leasing company,” he wrote in an Aug. 1 letter to shareholders filed with the Securities and Exchange Commission.

AdCare entered into an agreement and plan of merger on July 7, Rimland said in the letter, adding that the board of directors has unanimously adopted the merger agreement.

AdCare history

According to documents filed with the SEC, the company was incorporated in Ohio in 1991 under the name Passport Retirement. In 1995, the company acquired the assets and liabilities of AdCare Health Systems and began that name.

AdCare completed its initial public offering in 2006 and expanded its portfolio through a series of acquisitions in several states, primarily in the Southeast. In 2012, the company relocated its executive offices and accounting operations to Georgia and in late 2013, AdCare changed its state of incorporation from Ohio to Georgia.

The company primarily invests in long-term care and senior living real estate, which it leases or subleases to third-party operators.

Purchase finalized

Also in the second quarter of 2017, AdCare completed a previously announced acquisition of a 106-bed assisted living and memory care community in Glencoe, AL, for $5.5 million. C.R. Management began leasing Meadowood Retirement Village on May 1. The purchase and sale agreement with Meadowood Retirement Village LLC and Meadowood Properties LLC had been executed in March.

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