Quality Care Properties Enters Forbearance Agreement With HCR ManorCare

April 5, 2017

S&C client Quality Care Properties, Inc. (QCP) entered into a Forbearance Agreement with its principal tenant, HCR III Healthcare, LLC, and its parent HCR ManorCare, Inc. (together, HCR ManorCare). HCR ManorCare accounted for 94 percent of QCP's total revenues in 2016. The Forbearance Agreement requires HCR ManorCare to make cash rent payments of $32 million for each of April, May and June of 2017, with a deferral of the additional $7.5 million due per month. In addition, QCP agreed to provide HCR ManorCare with a temporary secured extension of credit of up to $7 million per month during each of April, May and June of 2017. During the term of the Forbearance Agreement, QCP and HCR ManorCare intend to engage in good faith discussions concerning a long-term restructuring of their master lease and certain other matters.

The S&C team representing QCP included Joseph Shenker, William Farrar, Andrew Dietderich, Audra Cohen, Michael Torkin, James Shea, Adam Josephs, Camilla Johnson and Mimi Wu. Ari Blaut, Bobby Yeh and Cristina Liebolt advised on financing matters; Davis Wang and Michelle Lu advised on tax matters; Benjamin Weber and Benjamin Fidler advised on real estate matters; Heather Coleman and Joshua Green advised on executive compensation and benefits matters; and Adam Paris, Marc De Leeuw, Brian Glueckstein, Brian England and Shane Palmer advised on litigation matters.