Vencor Inc. finances in trouble
Medford Rehabilitation and Health Care Center's parent company is facing serious financial problems.
Vencor Inc. has been struggling with declining profits and problems with lenders that have pushed the Louisville, Ky., company to the brink of bankruptcy.
Last year, the company lost $650.8 million and it has spent the summer negotiating with lenders to restructure massive debts of about $1 billion and annual lease obligations of $225 million.
So far, Vencor's struggles haven't affected Medford Rehabilitation, according to the nursing home's administrator, Laurie Gillespie.
As far as our operations in the building, nothing has changed, she said Friday. She said staff and patients won't be affected even if the firm decides to file for bankruptcy.
Medford Rehabilitation, at 625 Stevens St., has about 130 employees and 114 beds.
Vencor is one of the nation's largest providers of long-term health care. It operates more than 60 acute care hospitals and 300 skilled nursing facilities.
The company split into two separate firms last year, with Vencor owning the operations and non-real estate assets. A real estate company called Ventas was formed to own land and facilities, including Medford Rehabilitation's property.
Vencor has been unable to make timely payment of its $18.9 million in monthly rent to Ventas. The two firms are negotiating to restructure the lease obligation. Vencor announced Thursday that the two companies have reached a standstill agreement not to pursue claims against each other until Sept. 3.
The standstill period would end earlier if a bankruptcy case is begun by or against Vencor. It would also end early if Vencor fails to pay the $18.9 million in rent it owes Ventas for July by the end of August.
Ventas has also given Vencor a nonpayment notice for August rent. If it isn't paid by Sept. 10, Ventas will have the right to end its lease agreements with Vencor.