A group of skilled nursing properties that changed hands in a sizable transaction two years ago has seemingly fallen on hard times.
Fortis Management Group announced on July 12 it filed for a receivership in an agreement with its landlords. The company operates 60 skilled nursing and five assisted and independent living facilities spread across Wisconsin, Michigan, Minnesota, Oregon, Idaho and Washington.
The Milwaukee-based management company was created after a group of investors, led by private equity firm Formation Capital, bought the U.S. portfolio of senior living properties from Extendicare, a Canada-based company, in 2015. Extendicare went through with the $870 million deal in order to focus on its Canadian long-term care assets, the company said when the deal closed.
Fortis agreed to appoint Milwaukee attorney Michael S. Polsky as receiver while the management of its facilities is transferred to new operators.
“We have determined that the most effective way to stabilize the company is to seek appointment of a receiver who will assume all responsibility for operating the company and put it in a stronger position for transition to new operators,” Fortis said in a press release about the filing.
“This action will allow our business to continue operating during the receivership without any interruptions to the important care services provided to our residents and their families,” the release continued. “Additionally, the receivership protects our ability to pay our dedicated employees and meet our going forward vendor obligations.”
Fortis also requested in its filing that Polsky be allowed to retain Tampa, Florida-based consulting firm Focus Management Group USA to serve as a financial and operations advisor during the receivership process.
“Our goal will be to provide the support and expertise needed to allow all of the facilities to continue delivering quality care and services to residents ” Polsky said in the Fortis statement. “With a cooperative lender, engaged landlords, a supportive ownership group, and a dedicated team of employees, I am confident that all of the Fortis health centers will continue to operate with a ‘business as usual’ approach and keep providing the important care to their residents.”
Formation Capital CEO Brian Beckwith declined to comment on the agreement.
Written by Tim Regan