Sabra Health Care REIT (Nasdaq: SBRA) agreed to drop its claims against skilled nursing tenant Senior Care Centers amid the provider’s ongoing bankruptcy process, the REIT announced Sunday.

Under the terms of the deal, Sabra will cease its actions against the Dallas-based Senior Care Centers in exchange for “certain settlement payments,” a portion of which will go toward paying about $5.7 million in rent that the operator has accrued since filing for Chapter 11 bankruptcy protection in December. The two parties reached the accord on February 15, Sabra reported in its fourth quarter 2018 earnings release.

“The effectiveness of this agreement is subject to bankruptcy court approval, with settlement payments expected to coincide with the sale of assets expected to close on April 1, 2019,” Sabra noted.

Senior Care Centers’ bankruptcy process has seen some fireworks, with the operator blaming “burdensome debt levels and expensive leases” for the initial filing. Sabra then sued the operator for control of its 38 properties as the REIT attempted to consummate a $385 million deal to sell them off, a planned transaction that has since been reduced to 28 buildings for a total of $282.5 million.

In announcing the reduced slate of properties intended for sale, Sabra CEO Rick Matros indicated to SNN that the amended deal likely spelled the end of its legal action against Senior Care Centers.

“The revised terms of the Senior Care Centers Facilities sale represent a good outcome for Sabra,” Matros said in a statement in late January. “Upon completion, we will have achieved each of our stated objectives in connection with this transaction by wrapping up our association with a troubled operator and reducing our geographic concentration in a challenging state, with the ability now to reduce earnings dilution through re-tenanting of the retained properties with desired operating partners.”

The news came as Sabra announced a net loss attributable to shareholders of $19.4 million for the fourth quarter of 2018, as compared to net income of $101.3 million this time last year. The Irvine, Calif.-based REIT cited an earlier-than-expected $28.9 million rent write-off for senior living tenant Holiday Retirement, as well as amortization related to facilities transitioned to new operators totaling about $5.2 million.

For 2018, Sabra reported net income of $269.3 million, up from $148.1 million in 2017, with Matros reporting flat occupancy and declining EBITDAR rent coverage in the company’s skilled nursing portfolio — though he pointed to a single culprit for the latter trend.

“This decline was driven primarily by one operator, North American Healthcare, which had experienced unforeseen changes in senior management,” he said in a statement. “Those issues have since been addressed, and we remain confident in the performance of these facilities.”

The Dana Point, Calif.-based North American Healthcare represents Sabra’s fourth-largest tenant partnership, with 24 properties generating lease coverage of 1.09 times during the fourth quarter of 2018.

“With the repositioning of our company close to completion, we look forward to growing from a stronger foundation than existed 18 months ago,” Matros said in the statement. “In addition to focusing on growth opportunities in 2019, we are also committed to de-levering the balance sheet as described in our 2019 guidance.”

Matros and other Sabra executives will discuss the company’s quarterly performance on a Monday conference call with investors and analysts.