HCR ManorCare edging closer to receivership?
March 5 Editor's Note: See Quality Care Properties' plans for HCR ManorCare, announced March 2, here: HCR ManorCare post-bankruptcy plans, including CEO, announced by Quality Care Properties
Quality Care Properties is considering additional legal action against one of the nation's largest assisted living and skilled care operators. The threat comes as unpaid rent payments continue to mount.
In a regulatory filing this week, the real estate investment trust said ManorCare owes more than $300 million in back rent, including $14 million that was due Jan. 25. The Maryland-based REIT said it will keep all possible legal actions in play as it seeks compensation.
ManorCare's ongoing struggles have been tied to declining public payments, rising costs for medical equipment, escalating insurance rates, ongoing litigation and an aging property portfolio. Several analysts have predicted the firm may have to go into receivership. Under such a scenario, a receiver would assume custodial responsibility for the company. Quality Care has been pushing for this option, whereas Manor Care has argued it is not needed.
In all, Manor Care operates more than 200 communities. The properties collectively offer assisted living, skilled care, hospice, home health and outpatient therapy. The two sides are scheduled to be in court on Feb. 22.
Carlyle Group purchased the chain in 2007 for $6.3 billion, during a leveraged buyout. Carlyle later sold the properties to HCP Inc., a large healthcare REIT for $6.1 billion in 2010. As ManorCare's struggles continued in 2016, HCP spun off the properties to Quality Care.