LTC Settles With Abri, Senior Care, Transfers 11 SNFs in Texas to HMG Portfolio

Real estate investment trust LTC Properties (NYSE: LTC) late Tuesday announced it entered into a settlement agreement with Senior Care Centers and Abri Health Services, collectively known as the “Lessee,” among others.

The settlement — approved in the U.S. Bankruptcy Court for the Northern District of Texas, Dallas Division — includes a one-time payment of $3.25 million from LTC to affiliates of the Lessee along with the transition of 11 skilled nursing facilities in Texas to HMG Healthcare LLC. Payment and transfer of operations are expected to occur on or around Oct. 1, LTC said in a statement.

Texas-based HMG owns and/or operates 29 seniors housing and care properties in Texas and Kansas; the transfer brings that number to 40 properties.

Abri Health Care filed for Chapter 11 bankruptcy protection in April after emerging from another bankruptcy involving Senior Care Centers one month prior.

“We look forward to growing our association with HMG Healthcare and having these properties leased to an operator of our choice,” Wendy Simpson, chairman and CEO of LTC, said in a statement. “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.”

“We are excited to be taking over operations at these skilled nursing centers, allowing us to bring our premier health care services to an increased number of patients throughout Texas, while expanding our successful and long-standing relationship with LTC,” Laurence Daspit, principal at HMG, added in the same statement.

Properties will be leased under a one-year master lease with rent determined by cash flow — LTC said the properties will eventually be rolled into a master lease between LTC and HMG after a stabilized rent rate is established in the first year.

Terms are being negotiated for a secured working capital loan for HMG.

The Westlake Village, Calif.-based REIT added that payments for the 11 facilities could be deferred by up to six months, and agreed to indemnify HMG of expenses incurred pre-transfer, including claims and liabilities.