Sabra Health Care is suing for control of the 38 properties occupied by its largest skilled nursing operator, which is mired in bankruptcy.
Sabra filed the complaint on Dec. 20 as part of Senior Care Centers’ bankruptcy court proceedings in Dallas, Reuters first reported. The real estate investment trust asked that the court order SCC to surrender those properties immediately because it is jeopardizing its deal to sell the 36 skilled nursing and two assisted living facilities for $385 million in cash.
Senior Care Centers said it disagrees with Sabra’s claims.
“We dispute the allegations and look forward to presenting our case to the court,” spokesman Tom Becker said in an email.
Sabra announced the deal to sell after SCC filed for Chapter 11, weighed down by the heavy burden of “ballooning” lease costs. Bankruptcy court filings show that SCC owes almost $35 million in unpaid rent and other expenses to Sabra as of Dec. 4.
Both sides agree that SCC experienced “significant financial pressure,” driven by unfavorable reimbursement rates, non-payment of accounts receivable, declining occupancy rates and swelling costs. But this year, SCC’s “liquidity crisis became insurmountable,” and the company stopped paying rent in June, according to court documents.
In August, Sabra delivered notices that its tennant was in default, and demanded delinquent rent payments. Sabra says its new buyer will only close the sale contingent on the properties being “free and clear” of all lease interests. It contends that SCC is interfering with its ability to finalize the sale and is asking a judge for declaratory relief to “ensure an orderly transfer and continued operations of the SNF facilities to ensure the health, well-being and safety of patients at each SNF facility.”
