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National Health Investors, Inc.,
NHI, National HealthCare Corporation
NHC, the court-appointed Receiver for two
Tennessee nonprofits, SeniorTrust of Florida, Inc., ("SeniorTrust") and
ElderTrust of Florida, Inc., ("ElderTrust), and the Tennessee Attorney General
announced today that they have agreed to resolve a long-standing dispute that
has been the subject of litigation. The resolution of the litigation, together
with the Receiver's sale of 14 nursing homes and liquidation of the
nonprofits' assets, will ultimately result in approximately $40M for
charitable purposes in Tennessee.
The Tennessee Attorney General had previously asked the Davidson County
Chancery Court to place both of these nonprofits in receivership. The Receiver
subsequently filed suit against National Health Investors, Inc. ("NHI") and
National HealthCare Corporation ("NHC").
NHI helped to establish SeniorTrust and ElderTrust, two Tennessee 501(c)(3)
nonprofit corporations, in 2000. Between 2001 and 2004, NHI sold a group of
skilled nursing facilities in Missouri and Kansas to SeniorTrust and a group
of skilled nursing facilities in Massachusetts and New Hampshire to
ElderTrust. The Receiver's primary dispute with NHI concerned the financial
terms on which NHI had sold and financed the purchase of the facilities to the
nonprofit.
In 2007, NHC acquired the lease of a long-term care facility in Chattanooga,
Tennessee, known as Standifer Place from SeniorTrust. The Receiver's primary
dispute with NHC concerned the financial terms on which NHC acquired the
lease.
The Receiver for SeniorTrust and ElderTrust claimed that the financial terms
of the various transactions with NHI and NHC were unfair to the nonprofits, a
claim NHI and NHC disputed.
As part of the negotiated resolution, NHI will discount amounts it claims
remain due from SeniorTrust and ElderTrust. SeniorTrust and ElderTrust will
pay those discounted amounts, and NHI will acquire ElderTrust's skilled
nursing facilities in Massachusetts and New Hampshire.
NHC has managed the skilled nursing facilities owned by SeniorTrust and
ElderTrust since the facilities were acquired from NHI. As part of the
negotiated resolution, NHC paid additional amounts to resolve the Receiver's
claims. As a result of the settlement, NHC also has agreed to lease from NHI
the seven skilled nursing facilities in Massachusetts and New Hampshire which
were formerly owned by ElderTrust.
The Office of the Tennessee Attorney General, which oversees Tennessee
nonprofits, expressed satisfaction with the settlement of these disputes,
which is subject to approval by the court in which the receiverships are
pending. “We believe this settlement is in the best interest of the public and
upholds the appropriate use of Tennessee charities,” said Attorney General Bob
Cooper. “The Court will ultimately determine how these funds can be used for
charitable purposes, and the Office of the Attorney General will seek and
welcome public input in that process.”
Separately, National Health Investors raised quarterly dividend from $0.695 to $0.735/share.
Now sees FY13 normalized FFO guidance of $3.42-3.50 vs $3.38 analyst estimate.
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