Quality Care Properties receives partial rent payment for the second month in a row, triggering a notice of default.
In our June issue of The SeniorCare Investor, we laid out the issues in the battle between Quality Care Properties and HCR ManorCare, including the partial rent that HCRMC paid on June 1. The battle escalated this week when HCRMC paid just $8.2 million of the $39.5 million it owed QCP for July rent. Quality Care sent a notice of default demanding payment of all current and past due rent by July 14, which comes to $79.6 million. I don’t think they will comply with the demand. Otherwise, why waste everyone’s time with these partial payments? Is this gamesmanship on the part of HCRMC and its parent company, The Carlyle Group? If so, it is not making the white shoe PE firm look very good. If HCRMC really is having cash flow problems, then it makes their negotiating position even worse. I think the time for additional formalized rent reductions has long passed. It seems that the three sticking points are the DOJ investigation, the unfunded deferred compensation payments of more than $100 million, and the value of the home health business, and who gets it. But these have been there for months. Time to move on.
