An operator of elder-care buildings in another state recently determined that its dire financial straits required it to take immediate action — a situation that companies in Massachusetts face as well. For this reason, the company, HCR ManorCare Inc., decided to file for Chapter 11 bankruptcy protection. The company has also agreed for a real estate investment trust, Quality Care, to acquire it, as the company owes this trust millions of dollars in rent.
The trust recently reported that it had struck a deal to end a dispute with the nursing care facility company that had dragged on for nine months. As part of the deal, the trust will trade its claims of deferred and unpaid rent for total ownership of the nursing care facility company. Thus, the company will be an indirect subsidiary of the trust.
The move is expected to recapitalize the elder-care facility company, providing it with the flexibility and stability needed to more effectively react to the quick changes taking place in today’s post-acute medical care industry. Nursing care facility companies have struggled over the past couple of years due to insufficient Medicare reimbursements, which have trimmed revenue streams significantly. In the case of ManorCare, the company lost nearly $4 million during the past three years, including more than $3 million in 2016 alone.
Sometimes, industry changes or economic situations cause a company’s liabilities to outweigh its assets. This can leave a business owner desperate for a way out of his or her financial distress. Fortunately, Chapter 11 bankruptcy protection is available to help financially struggling business owners. An attorney in Massachusetts can provide the necessary guidance to successfully complete each step of the bankruptcy filing process.
Source:Â toledoblade.com, “HCR ManorCare expected to file for bankruptcy“, Jon Chavez, March 2, 2018