WESTLAKE VILLAGE, Calif. — LTC Properties Inc. (NYSE: LTC), a Westlake Village-based real estate investment trust that primarily invests in seniors housing and health care properties, has unveiled plans to transfer 11 skilled nursing facilities in Texas to a new operator.
The United States Bankruptcy Court for the Northern District of Texas Dallas Division approved a settlement agreement between current operators Senior Care Centers LLC and Abri Health Services LLC, which have declared bankruptcy, and LTC. Under the agreement, LTC will pay the bankrupt entities $3.3 million in order to facilitate the transfer of operations to HMG Healthcare.
The payment and the transfer of operations are expected to occur on or about Oct. 1. 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,” says Wendy Simpson, LTC’s chairman and CEO. “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.”