Benzinga | Aug 31, 2021 04:33PM EDT

LTC Properties Reports Settlement Deal With Senior Care Centers, Abri Health Services

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."