Saturday, April 21, 2001

Health care firm begins fresh start




The Associated Press

        LOUISVILLE — Vencor Inc. started anew Friday with a changed name and $120 million in fresh operating credit as the long-term care company officially emerged from more than 1 1/2 years of bankruptcy.

        The once high-flying company, which plunged into Chapter 11 bankruptcy in 1999 after amassing huge debt, has been renamed Kindred Healthcare Inc.

        The Louisville-based company maintained operations at its nursing homes and long-term care hospitals across the country while working out the reorganization. The company operates 313 nursing homes and 56 hospitals in 46 states, with 52,000 employees.

        The renamed company can draw upon a $120 million credit line from a lending group led by Morgan Guaranty Trust Co. of New York, the company said Friday.

        The new credit line will be available for the company's operations, said company spokeswoman Susan Moss.

        Ms. Moss said the company had expected to have a line of credit available, but did not include the assistance in its official bankruptcy reorganization plan.

        The reorganization plan approved by a federal judge in Delaware on March 1 transferred ownership of the company to its major creditors — banks, bond holders and real-estate company Ventas Inc. Ventas split off from Vencor in 1998 to own the buildings in which Vencor operates.

        The plan puts Kindred on better financial ground, a financial analyst said.

        “They have improved their financial condition by exchanging equity in the reorganized company in exchange for debt forgiveness and rent concessions,” said Steve O'Neil, with Hilliard Lyons in Louisville.

        The company retains its status as a public company, and Ms. Moss said it anticipates its shares being traded over-the-counter.

        Vencor blamed the huge debts it piled up in the late 1990s on sharp cuts in Medicare payments.

       



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