Lehigh Valley nursing home operator ManorCare transferring property ownership as part of bankruptcy

March 09--Nursing home operator HRC ManorCare Inc., which operates nine facilities in the Lehigh Valley that employ about 1,200 people, is handing control over to its landlord as part of its Chapter 11 bankruptcy filing.

ManorCare and Quality Care Properties Inc., the property owner, issued a joint announcement of the planned transition on March 2, and national media including Reuters and the Wall Street Journal, were among the first to report the ManorCare bankruptcy. Under Chapter 11, a business can attempt to reorganize its finances through a court-approved plan, shielding itself from creditors' lawsuits during its reorganization.

ManorCare spokeswoman Julie Beckert said Thursday that patients, employees and vendors should see no disruption in care or service.

"HCR ManorCare believes this agreement should ensure the necessary financial stability going forward to protect our employees, patients and partners and keep our profitable lines of business viable going forward," she said.

In the Lehigh Valley, ManorCare operates six skilled nursing centers, two memory care communities and home care and hospice agencies in one location. It operates in the Allentown area, Bethlehem, and Bethlehem and Palmer townships.

Toledo, Ohio-based ManorCare, which operates more than 500 facilities nationwide and is the second-largest U.S. nursing home operator, according to Reuters, listed $7.1 billion in debt as part of a pre-arranged deal to transfer property ownership to Quality Care.

ManorCare, which is privately owned, said revenues have failed to cover monthly rent obligations since 2012, a year after signing its lease with Quality Care. ManorCare blamed shrinking margins at its post-acute and skilled nursing facilities on reduced government reimbursement rates, low occupancy, a shift toward new managed Medicare plans, and alternative services such as home health care and retirement communities.

ManorCare also said it owed $446 million in rent that was accruing at a minimum of $39.5 million every month.

The companies didn't disclose exact financial terms of the transaction but said they expect to complete it during the third quarter.

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