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Texas Retirement-Community Operator Enters Bankruptcy

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A New Braunfels, Texas-based nonprofit company that provides housing and health care to more than 300 residents and patients has sought bankruptcy protection, the San Antonio Express-News reported. Eden Home Inc., which does business as EdenHill Communities, filed chapter 11 last on March 16 after defaulting on about $52.6 million in bonds used to finance construction of 103 apartments, a health center and other improvements. An agreement with bondholders to delay a foreclosure expired, prompting them to direct the bond trustee to “exercise remedies,” Eden Home CEO Laurence Dahl said in a court filing accompanying the bankruptcy petition. The bondholders hold a lien against Eden Home’s real estate and personal property. Dahl blamed construction defects and delays for Eden Home’s financial troubles. It is mired in litigation with the contractor. Eden Home has yet to file schedules of all of its assets and liabilities, but reported both categories are in the range of $10 million to $50 million.

Health Care Bankruptcy Leaves Big Law in the Lurch

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Citing fictitious subsidiaries and potential fraud, health services company Constellation Healthcare Technologies Inc. and its subsidiaries filed for bankruptcy on March 16 in Central Islip, New York, owing nearly $4 million to four law firms, the American Lawyer reported. DLA Piper and Thomas Califano, U.S. co-chair of the global legal giant’s restructuring practice, are advising the debtor in its chapter 11 case. The collapse of the medical billing company comes a little more than a year after it was taken private following a $309.4 million sale to its founder Parmjit “Paul” Parmar and CC Capital Management LLC, a private investment firm started in 2015 by Chinh Chu, a former top dealmaker at buyout giant The Blackstone Group LP. Constellation, which on its website lists a headquarters in Houston but in bankruptcy court filings states it is based in Middletown, New Jersey, also does business as Orion Healthcorp Inc. The debtor lists assets of between $1 million and $10 million, according to bankruptcy court records, which show Constellation’s liabilities at between $100 million to $500 million.

Community Health Brings on Stable of Advisers to Aid in Refinancing

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Community Health Systems Inc., one of the largest publicly traded hospital chains in the U.S., said it has retained a stable of investment banks to help refinance over $3 billion of debt coming due in the next two years, WSJ Pro Bankruptcy reported. The Tennessee-based company hired Lazard Freres, Citigroup, Credit Suisse and J.P. Morgan for the effort. Community Health is struggling to stay out of bankruptcy as it faces those debt maturities, and as its revenue, earnings and patient admissions slide. The company has a total of $13.8 billion in debt, but the immediate worry is $3.2 billion in bonds coming due in 2019 and 2020. With unsecured bonds trading at deep discounts, the only way for the company to refinance those bonds is to engage in a distressed debt exchange, offering holders to swap those bonds for new secured bonds with longer maturities, said two bondholders.

Miami Hospital Files For Chapter 11 with $67 Million in Debt

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Miami International Medical Center LLC, which ran the recently closed Miami Medical Center, has filed Chapter 11 while listing $31.4 million in assets versus $67.3 million in liabilities, the Miami Business Journal reported. The nonprofit Nicklaus Children’s Hospital is heavily involved in this company. It serves as a shareholder, lender and landlord to Miami International Medical Center. And more funding from Nicklaus Children’s Hospital could help resolve this case. The 67-bed hospital suspended patient services in October 2017 and terminated 180 employees. It had been operating for about 20 months after being closed for $70 million in renovations by its new owners.

Texas Nursing Home Chain Orianna Files for Bankruptcy

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The owner of Texas-based Orianna Health Systems filed for bankruptcy on Tuesday after reaching a restructuring deal with its landlord, the second large nursing home operator to seek chapter 11 protection this week due to unpaid rent, Reuters reported. 4 West Holdings Inc., which operates as Orianna, reached a deal with its landlord Omega Healthcare Investors Inc. and agreed to transfer 23 facilities to a new operator and provide for the sale of 19 others, according to court records. Orianna owes $52 million in rent to Omega, a real estate investment trust or REIT, and $67 million to vendors as well as other debts, according to court records. Orianna is Omega’s largest tenant, according to securities filings.

HCR ManorCare Files for Bankruptcy

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HCR ManorCare Inc., one of the largest skilled nursing home chains in the U.S., filed for bankruptcy protection on Sunday as part of a deal in which its landlord, Quality Care Properties Inc., will take control of the company, WSJ Pro Bankruptcy reported. As part of the bankruptcy deal, the company has agreed to pay former Chief Executive Paul Ormond more than $115 million in deferred compensation and severance. The Toledo, Ohio-based nursing home operator, which is owned by private-equity firm Carlyle Group, has been behind on rent to QCP, a publicly traded real-estate investment trust, for nearly a year. After repeated missed payments and after QCP agreed to multiple temporary reductions on rent payments, QCP took legal action against its primary tenant last August, suing to replace the company’s management and appoint a receiver with the power to collect rent. The company has been in talks on a balance-sheet restructuring with the landlord since then.

Nursing Home Chain HCR ManorCare to Sell Itself in Bankruptcy

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The second-largest U.S. nursing home operator, HCR ManorCare, will file for chapter 11 protection in the coming days and transfer ownership to its landlord, Quality Care Properties Inc., the latest sign of distress in the senior housing industry, Reuters reported. Quality Care, a real estate investment trust, announced the agreement on Friday, saying that it would become the full owner of Toledo, Ohio-based ManorCare’s skilled nursing, assisted living, hospice and homecare businesses across the United States. Shares of Quality Care, which will give up its REIT status, jumped 23.4 percent to $15.55 on the New York Stock Exchange. HCR ManorCare had owed its landlord more than $300 million in rent, according to regulatory filings. It is one of several large U.S. nursing home chains that have struggled to keep up with rent payments due to changing Medicaid and Medicare reimbursements for nursing homes, rising costs and low occupancy rates.

Complaints About Nursing Home Evictions Rise, and Regulators Take Note

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While nursing homes can discharge residents for a limited set of reasons, legal advocates say that home operators sometimes interpret those reasons in unjustified ways. Often, it’s because the residents’ more lucrative Medicare coverage is ending, the New York Times reported. Many of the residents, unaware of their rights, leave without a challenge. “The nursing homes, they know the system and they really game it to where they maximize their advantage,” said Tony Chicotel, a lawyer at California Advocates for Nursing Home Reform, a nonprofit group. Complaints about evictions have caught the attention of federal regulators, who are now seeking ways to step up enforcement of the federal laws that protect residents of the nation’s 15,000 nursing homes.

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Missouri Hospital Files for Bankruptcy

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A hospital district in Pilot Knob, Mo., filed for municipal bankruptcy protection from its creditors yesterday, Bloomberg News reported. The Iron County Hospital District, which owns a local hospital, listed liabilities between $10 and $50 million and assets between $1 million and $10 million. The district has about $6.5 million in bonds outstanding, said Daniel Doyle, a lawyer at Lashly & Baer who is representing the district.