Moody's: ResCare unchanged

Moody's Investors Service commented that ResCare Inc.'s Ba3 corporate family rating and negative outlook are unaffected following the company's announcement in its 4Q09 earnings release that it has taken $72 million pre-tax goodwill and other long-lived assets impairment charge related to three of its business segments.

However, the cushion under its net worth covenant will narrow due to the impairment charge, but, at this point, the agency said it believes the headroom to be adequate at about $67 million as of Dec. 31.

Moody's noted that it changed ResCare's outlook to negative on Jan. 19, and in its rating action, the agency said it indicated that the negative outlook incorporates several unfavorable negative legal developments such as the Selk verdict, which at that time was estimated to be about $54 million.

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