LTC Pays for Smooth Transition Between Nursing Home Operators

LTC Properties Inc. has entered into a settlement agreement with two bankrupt former operators, Senior Care Centers and Abri Health Services, after receiving approval from a U.S. Bankruptcy Court.Under the settlement, the real estate investment trust in Westlake Village, which specializes in nursing homes and senior living properties, will make a one-time payment of $3.25 million to affiliates of the bankrupt entities in exchange for cooperation in facilitating a transition of 11 nursing centers from their management to Texas-based HMG Healthcare.LTC will lease the 11 facilities to HMG, which will run the care operations, under a one-year lease. The lease’s rent will be based on cash flows and have payment subject to a deferral of up to six months. Eventually, LTC and HMG will add the 11 nursing centers to a master lease that currently exists between the two companies.The $3.25 million payment and transfer of operations are expected to take place on or around Oct. 1.Also, LTC has agreed to provide a secured working capital loan to HMG. The terms of the loan are currently being negotiated.“We look forward to growing our association with HMG Healthcare and having these properties leased to an operator of our choice,” Wendy Simpson, LTC’s chief executive, said in a statement. “We have had a long-standing relationship with the principals of HMG for over a decade and their involvement in reaching the settlement was instrumental.”Shares of LTC closed up 29 cents, or a fraction of a percent, to $34.80 on the Nasdaq on Wednesday, while the Nasdaq market was also up a fraction of a percent.