Paradigm Renews Its Bid to Buy Facilities in Move to Save Ailing Care Enterprises
A third plan to rescue Care Enterprises from bankruptcy has been submitted, this time by a company that is renewing its bid to buy skilled nursing facilities from the Tustin-based nursing home chain.
In a plan filed Wednesday with the U.S. Bankruptcy Court in Los Angeles, Paradigm Corp. of Columbus, Ohio, seeks to acquire 22 nursing homes and other property owned by Care Enterprise subsidiaries in Ohio, New Mexico and West Virginia.
Paradigm attorney Rick Bruner said Paradigm would assume about $25 million worth of mortgages and development-bond debt on the facilities that it wants to acquire. It would also pay the operational debts of those facilities, as well as an undetermined portion of the approximately $40 million in long-term bank debt owed by Care Enterprises.
Paradigm said the value of the transaction would be about $43.7 million.
Paradigm’s plan to help Care pay its debts is similar to offers that the Ohio company made to acquire Care nursing homes a year ago, before Care petitioned in March for reorganization under Chapter 11 of the federal Bankruptcy Code. In the last of those offers, Paradigm proposed paying $66.2 million for 26 nursing homes, including $18.7 million in cash and the assumption of $47.5 million of Care’s debt.
In January, 1988, Care’s board of directors determined that it was not in the best interests of the company to negotiate the sale of any of its facilities to Paradigm, in part because the company was embroiled in management-contract litigation with Paradigm’s principal owner, Ralph Hazelbaker. That litigation is still pending, Bruner said Thursday.
Hazelbaker is a former officer and director of Americare, which in 1985 sold to Care many of the same facilities that Paradigm now is seeking to acquire.
Bruner said Paradigm wants to acquire the assets of eight Care subsidiaries, all of which are in bankruptcy: First Ohio Investment Group, Americare Corp., Americare Southwest Inc., Americare Southwest of Arizona Inc., Ladera Health Care Center Inc., Rio Rancho Health Care Center Inc., Las Palomas Health Care Center Inc. and Boon County Health Care Center Inc.
Paradigm’s plan will be considered next month by the Bankruptcy Court, along with alternative plans proposed by Care Enterprises management and a committee of Care Enterprises’ unsecured creditors, both of which call for the sale of some Care Enterprises facilities.
Bruner said Paradigm is attempting to obtain access to more information about the financial condition of Care Enterprises’ facilities to fill in the details of its proposal.
