HCR ManorCare pre-packaged plan of reorganization confirmed by court

By Caroline Salls

Pittsburgh, April 13 – HCR ManorCare, Inc.’s pre-packaged plan of reorganization was confirmed Friday by the U.S. Bankruptcy Court for the District of Delaware.

HCR ManorCare entered into a plan support agreement with Quality Care Properties, Inc. (QCP) and HCP Mezzanine Lender, LP.

Under the plan, QCP or its designee will receive 100% of the stock of the reorganized debtor in full satisfaction of its claims arising under the company’s guaranty of the lease obligations owed by non-debtor HCR III Healthcare, LLC.

Existing equityholders will receive no distributions, but holders of more than 80% of the equity of HCR ManorCare have agreed to support the plan.

Credit facility claims will be reinstated, and any liens held by the agent will exist after the effective date as before.

General unsecured claims and severance claims will be paid in full in cash.

In addition, HCR III, QCP and the lessors under a previous master lease security agreement will enter into amendments to that agreement, and, on or before the seventh day after the plan effective date, HCR III and the lessors will terminate, release and discharge the guaranty as part of the plan sponsor agreement.

HCR ManorCare is a Toledo, Ohio-based provider of short-term, post-acute services and long-term care. The company filed bankruptcy on March 4 under Chapter 11 case number 18-10467.

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