Former HCR ManorCare CEO Paul Ormond is set to receive $116.7 million from the now-bankrupt nursing home giant. In September, Ormond resigned in the midst of speculation that ManorCare would be filing for bankruptcy due to its inability to pay back rent on its 295 skilled nursing and assisted-living facilities. Thanks to recently released bankruptcy documents, it has been revealed that ManorCare is $7.1 billion in debt.
The parcels of land on which ManorCare facilities sit have been leased to them by Quality Care Properties, (QCP) a real estate investment trust, since a deal inked in 2011. Within 14 months of the agreement, ManorCare began having problems paying rent on their properties. The company was able to get by for a time thanks to other businesses within their corporate portfolio, including profitable home health and outpatient rehab divisions. These segments were able to transfer $500 million to the skilled nursing facility area of the business to help cover rent payments, until eventually the company realized they would be better off filing for bankruptcy. At one point last October, ManorCare residents and their loved ones were frightened at the possibility of being evicted from their facilities when the chain waited until the last possible minute to respond to a lawsuit filed against them by QCP. At the eleventh hour, ManorCare submitted a request to extend the deadline to file a response, a motion which was thankfully approved.
ManorCare Debt to be Repaid After CEO Gets $116.7 Million Check