$5 Million Was Due Last Friday : Care Enterprises Seeks Extension on Its Late Payment

Care Enterprises, still scrambling to avoid bankruptcy, said Wednesday that it is negotiating with lenders to extend the deadline for a $5-million loan payment it missed Friday. The lenders, Wells Fargo Bank and Citibank, previously had extended a Dec. 31 due date for the payment.

Care, a Tustin-based nursing home operator, was also obliged Wednesday to once again extend the deadline on its offer to exchange $68 million in company debentures and notes.

The offer, although previously extended and revised, has been accepted by only 20% of the debenture holders and 0.2% of the note holders. Without the extension, the offer would have expired Tuesday.

Care Enterprises is seeking to exchange the debentures and notes for others without certain covenants that the company says prohibit it from refinancing its $35-million bank debt.

Bankruptcy Possible

Unless that debt can be refinanced, the company has said it may be forced to seek protection from its creditors in the U.S. Bankruptcy Court.

Meanwhile, Care spokesman William Izatt said Wednesday that Care currently is not interested in negotiating the sale of any of its nursing homes to Ralph E. Hazelbaker, a Care shareholder and president of Paradigm Corp., a nursing home company based in Ohio.

Hazelbaker, formerly chief executive of Americare Corp., which was sold to Care in 1985, has said that he would be willing to pay between $10 million and $25 million for the Americare division. He also said he would be willing to discuss purchasing additional Care assets.

However, Izatt said Wednesday, while Hazelbaker sent Care a letter in December expressing his interest in acquiring the company’s nursing facilities, he has yet to make a formal offer.

Should Make an Offer

Izatt said that Fred Morgan, president of a Care subsidiary that buys and sells nursing facilities, advised Hazelbaker on Tuesday that if he is interested in acquiring any part of Care Enterprises, he should make an offer.

“We are not committed to doing anything at this point with him,” Izatt said.

“Fred Morgan is not, nor has he been, in the process of negotiating with Ralph Hazelbaker regarding an acquisition.”

Nor, Izatt said, is Care Enterprises negotiating a sale of its assets with anyone else.

Hazelbaker could not be reached for comment Wednesday.