Omega Healthcare Investors (NYSE:OHI) announced on Tuesday that its tenant LaVie Care Centers has completed its bankruptcy proceedings effective June 1, and the Omega-LaVie master lease has been assigned to a new entity called Avardis.

“Monthly contractual rent amounts under the Avardis lease remain the same as the legacy LaVie master lease,” Omega noted during an investor presentation.

Last June, LaVie, a prominent operator of skilled nursing and assisted living facilities, filed for Chapter 11 bankruptcy for the second time since 2021, citing it as an effort to restructure its finances and address significant operational challenges.

At the time of the bankruptcy filing, LaVie reported over $1.1 billion in debt, including $622 million in lease obligations. The company attributed financial difficulties to several factors including staffing as the COVID-19 pandemic exacerbated existing workforce issues, leading to increased reliance on costly agency labor. Between 2020 and 2022, agency labor costs surged by 380%, reaching $277 million, LaVie had noted in the court filings.

Despite divesting from over 90 facilities since early 2023, LaVie remained burdened by debts associated with its legacy operations, and unpaid vendor bills as well as unresolved legal claims. 

Eventually, LaVie’s footprint was reduced to 43 facilities across five states.

Omega remained LaVie’s main landlord and largest secured creditor as it proceeded through the Chapter 11 restructuring, with Omega committing $10 million to fund 50% of the expected debtor-in-possession financing for LaVie to support sufficient liquidity for operating the facilities during the bankruptcy.

By 2025, LaVie represented around 4% of Omega’s total holdings, according to the Hunt Valley, Maryland-based real estate investment trust (REIT). Omega was a landlord for 30 of LaVie’s remaining locations. 

On Tuesday, Omega shares closed at $37.11, up 4 cents, or 0.11%