A New York Post exclusive article reveals that ManorCare CEO Paul Ormond is demanding to be paid the large bonus he was promised when he agreed to a restructuring of the company in 2007. Ormond is demanding $100 million from the Carlyle Group, the private equity firm that recently ceded ownership of HCR ManorCare amid a Department of Justice investigation for Medicare fraud and rumors of loan default and impending bankruptcy.
In 2007, the Carlyle Group sold the real estate associated with all ManorCare properties to Quality Care Properties for nearly $7 billion. To agree to the sale and restructuring, CEO Paul Ormond was promised $100 million in compensation. While it’s unclear when the package was set to be paid out, Ormond is now demanding the full amount, which ManorCare is in no position to afford. The company, the second largest nursing home chain in the country, has defaulted on its loans and is believed to be heading towards a bankruptcy filing. Regardless of his demands, Ormond will likely receive close to $60 million from a bankruptcy filing.
A bankruptcy filing will mean the closing of some, if not many, of ManorCare’s 500 nursing homes. The chain currently has over 34,000 beds and has been plagued over the years by allegations of poor care. Since 2015, it has been facing an investigation for Medicare fraud, specifically for pushing unnecessary rehab services and then billing Medicare for them, including services that were not performed.
The full NY Post article is available here.
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