WESTLAKE VILLAGE, Calif.--(BUSINESS WIRE)--LTC Properties, Inc. (NYSE: LTC), a real estate investment trust that primarily invests in seniors housing and health care properties, announced today the United States Bankruptcy Court for the Northern District of Texas Dallas Division approved a settlement agreement between Senior Care Centers, LLC and Abri Health Services, LLC, (the bankrupt entities and collectively, the “Lessee”) and LTC and TXMS Real Estate Investments, Inc. (a wholly owned subsidiary of LTC), among others.
The settlement provides for, among other things, a one-time payment of $3.25 million from LTC to the affiliates of Lessee in exchange for cooperation and assistance in facilitating an orderly transition of 11 skilled nursing centers from the Lessee and its affiliates to affiliates of Texas-based HMG Healthcare, LLC (“HMG”). The payment and the transfer of operations are expected to occur on or about October 1, 2021. The 11 properties will be leased to HMG under a one-year master lease with rent based on cash flows, and payment subject to a deferral of up to six months. LTC and HMG intend to add these 11 properties to a master lease currently existing between LTC and HMG after establishing a stabilized rent rate during this first lease year. LTC has agreed to provide HMG a secured working capital loan, the terms of which are currently being negotiated. Additionally, LTC has agreed to indemnify the new operator for expenses incurred, if any, related to certain pre-transfer claims and liabilities.
“With this settlement with the bankrupt Lessee behind us, we look forward to growing our association with HMG Healthcare and having these properties leased to an operator of our choice. 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,” said Wendy Simpson, LTC’s Chairman and CEO.
“We are excited to be taking over operations at these skilled nursing centers, allowing us to bring our premier healthcare services to an increased number of patients throughout Texas, while expanding our successful and long-standing relationship with LTC,” said Laurence Daspit, Principal of HMG Healthcare. “Our dedicated and compassionate employees work tirelessly every day to ensure quality outcomes for the most vulnerable populations in Texas, and we will continue that work in these 11 centers.”
About LTC Properties
LTC is a real estate investment trust (REIT) investing in seniors housing and health care properties primarily through sale-leasebacks, mortgage financing, joint-ventures and structured finance solutions including preferred equity and mezzanine lending. LTC owns or holds first mortgages on 176 properties in 27 states with 31 operating partners. Based on LTC’s gross real estate investments, the portfolio is comprised of approximately 50% seniors housing and 50% skilled nursing properties. Learn more at www.LTCreit.com.
About HMG Healthcare
Established in 2012, HMG Healthcare’s mission is to deliver premier healthcare services, through dedicated and compassionate employees accommodating individualized care needs. HMG Healthcare currently owns and/or operates 29 seniors housing and care properties in Texas and Kansas. With the addition of these 11 facilities, HMG will operate 40 seniors housing and skilled nursing properties, caring for approximately 3,000 residents. HMG will operate 35 properties in Texas.
Forward Looking Statements
This press release includes statements that are not purely historical and are “forward looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding the Company’s expectations, beliefs, intentions or strategies regarding the future. All statements other than historical facts contained in this press release are forward looking statements. These forward looking statements involve a number of risks and uncertainties. Please see LTC’s most recent Annual Report on Form 10-K, its subsequent Quarterly Reports on Form 10-Q, and its other publicly available filings with the Securities and Exchange Commission for a discussion of these and other risks and uncertainties. All forward looking statements included in this press release are based on information available to the Company on the date hereof, and LTC assumes no obligation to update such forward looking statements. Although the Company’s management believes that the assumptions and expectations reflected in such forward looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. The actual results achieved by the Company may differ materially from any forward looking statements due to the risks and uncertainties of such statements.