National Health Investors and National HealthCare Corp. have struck a wide-ranging deal with Attorney General Bob Cooper and the receiver for two nonprofits they formed to settle litigation over their financial relationships with those entities.
The companies' agreement with SeniorTrust of Florida and ElderTrust of Florida calls for NHI to discount the money it says it is still owed by SeniorTrust and ElderTrust and, in turn, buy ElderTrust's eight properties in Massachusetts and New Hampshire for $37.1 million. NHI had previously made two other offers for the nursing homes but was rebuffed by Cooper's office, which placed ElderTrust in receivership last September.
For its part, NHC has agreed to resolve various claims made by James Skinner, receiver for ElderTrust and SeniorTrust, and to take over the management of the ElderTrust properties for NHI. Once all claims have been settled, the state will receive about $40 million for charitable purposes.
ElderTrust and SeniorTrust sued NHI and NHC claiming the companies had devised a scheme to have the nonprofits pay inflated amounts for financially troubled nursing homes and also charged them excessive management fees. Their claims echoed those made by Care Foundation of America, a third nonprofit formed by NHI and NHC more than a decade ago. The companies disputed all those claims but in late 2009 settled the Care Foundation case, which resulted in a $44 million charitable kitty.
“We are proud to have helped the Attorney General’s office fulfill a crucial responsibility — to ensure that nonprofit assets are used to realize charitable purposes,” said Paul Davidson, the Waller attorney who has represented Skinner during the at-times acrimonious litigation. “Nonprofit Board members have an obligation to meet their fiduciary duties to the nonprofit, including the duty of loyalty, regardless of the circumstances which led to the creation of the nonprofit corporation or their appointment to its board of directors.”
At about 11:30 a.m., shares of NHI (Ticker: NHI) were down slightly at about $65. Year to date, they have risen about 15 percent. At the same time it sent out word of its settlement, the company also said it is hiking its dividend to 73.5 cents per share — up 6 percent from Q1 and 13 percent from last year — and lifting its guidance for full-year funds from operations. That range is now $3.42 to $3.50 per share, up from $3.30 to $3.38.
NHC shares (Ticker: NHC) were off 0.6 percent to $45.69. They are down about 6 percent so far in 2013.
SEE ALSO: NHI's statement on the settlement