National Health Investors' expansion plans likely aren’t getting any help from the Tennessee Attorney General’s Office, according to a note from one of its borrowers.
NHI executives told the Securities and Exchange Commission Monday that ElderTrust of Florida officials have informed them that Attorney General Bob Cooper has told ElderTrust it will not approve the company’s proposed sale of seven skilled nursing facilities to NHI. ElderTrust is a not-for-profit entity to which NHI has loaned money. Additionally, according to the filing, the AG's office is considering asking the court to appoint a receiver for the nonprofit.
ElderTrust, which is a Tennessee entity, purchased the facilities in question through a mortgage financed by NHI and has contracted with NHI’s sister company, National HealthCare Corp., to manage them for a fixed fee.
NHI has had trouble with nonprofit organizations with Florida operations in the past. In 2009 , Care Foundation of America took legal action against the company claiming that it had manipulated sympathetic board members into buying six Florida facilities at unfair prices. That case was settled a year later, when NHI paid $67 million to buy back the centers and create a $44 million foundation.
The attorney general declined further comment on the current matter. A call to NHI had not been returned by Tuesday afternoon.