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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 13, 1999
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VENCOR, INC.
(Exact name of registrant as specified in its charter)
Delaware 001-14057 61-1323993
(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation or organization) Identification No.)
One Vencor Place
680 South Fourth Street
Louisville, Kentucky
(Address of principal executive offices)
40202-2412
(Zip Code)
Registrant's telephone number, including area code: (502) 596-7300
Not Applicable
(Former name or former address, if changed since last report.)
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Items 1-2. Not Applicable.
Item 3. Bankruptcy or Receivership.
On September 13, 1999, Vencor, Inc. (the "Company") announced that it
and several of its subsidiaries (collectively, the "Debtors") filed voluntary
petitions for protection under Chapter 11 of the United States Bankruptcy Code
(the "Bankruptcy Code") with the United States Bankruptcy Court for the District
of Delaware (the "Court") (case nos. 99-3199 (MWF) through 99-3327 (MWF),
inclusive). The Debtors' cases have been consolidated for the purpose of joint
administration and have been assigned to Judge Mary F. Walrath. At hearings
held on September 13 and 14, 1999, the Court entered first day orders granting
authority to the Company and its subsidiaries to pay pre-petition and post-
petition employee wages, salaries, benefits and other employee obligations. The
Court also approved orders granting authority, among other things, to pay pre-
petition claims of certain critical vendors, utilities and patient obligations.
Until approval of its plan of reorganization, the Company intends to pay post-
petition claims of other vendors and providers in the ordinary course of
business.
The Court also approved, on an interim basis, the Company's $100
million debtor-in-possession financing (the "DIP Financing") with a bank group
led by Morgan Guaranty Trust Company of New York. The final hearing on the DIP
Financing is scheduled for October 1, 1999. The DIP financing and existing cash
flows will be used to fund the Company's ongoing operations during the
restructuring.
During the restructuring, the Company and Ventas, Inc. (NYSE: VTR)
have entered into a stipulation (the "Stipulation") for the payment by the
Company of a reduced monthly rent payment of approximately $15.1 million
beginning in September. The Stipulation was approved by the Court. The reduced
rental payment for September is due on September 16 with the remaining monthly
rental payments required to be made on the fifth day of each month or the first
business day thereafter. Beginning in September, the difference between the
base rent under the Company's existing master leases with Ventas and the reduced
monthly rent payment of approximately $15.1 million will accrue as an
administrative expense, subject to challenge in the Chapter 11 case. Unpaid
August rent of approximately $18.9 million will constitute a claim by Ventas in
the Chapter 11 case.
The Stipulation also continues to toll any statutes of limitations or
other time constraints in a bankruptcy proceeding for claims that might be
asserted by the Company against Ventas.
The Stipulation expires on October 31, 1999, but automatically renews
for one-month periods unless either party provides a fourteen-day notice of
termination. The Stipulation also may be terminated prior to its expiration
upon a payment default by the Company, the consummation of the Company's plan of
reorganization or the occurrence of certain defaults under the DIP Financing.
As previously disclosed, the Company continues to develop its plan of
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reorganization that includes terms negotiated with key parties, including the
Company's bank lenders, subordinated debtholders, and Ventas. In addition,
settlement negotiations are continuing with the Department of Justice, acting on
behalf of the Health Care Financing Administration and the Department of Health
and Human Services' Office of the Inspector General, concerning the government's
outstanding claims against the Company, including outstanding routine
reimbursement issues. As announced to the Court during the hearings on the
first day motions, the Company does believe, that subject to certain conditions
including entering into definitive agreements, an overall understanding on the
broad economic terms of the Company's plan of reorganization has been reached
with these key parties.
Copies of the press releases issued by the Company are included as
exhibits to this filing and are incorporated herein by reference.
Certain statements set forth above, including, but not limited to,
statements containing the words "anticipates," "believes," "expects," "intends,"
"will," "may" and similar words constitute forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Such forward-
looking statements are based on management's current expectations and include
known and unknown risks, uncertainties and other factors, many of which the
Company is unable to predict or control, that may cause the Company's actual
results or performance to differ materially from any future results or
performance expressed or implied by such forward-looking statements. These
statements involve risks, uncertainties and other factors detailed from time to
time in the Company's filings with the Securities and Exchange Commission. Such
factors may include, without limitation, the delays or the inability to complete
the Company's plan of reorganization; the availability and terms of capital in
light of recent losses, cash flow shortfalls and the Company's Chapter 11
bankruptcy filing; adverse actions which may be taken by creditors and the
outcome of various bankruptcy proceedings; the Company's ability to attract
patients given its current financial position; and the effects of healthcare
reform and legislation on the Company's business strategy and operations. The
Company cautions investors that any forward-looking statements made by the
Company are not guarantees of future performance. The Company disclaims any
obligation to update any such factors or to announce publicly the results of any
revisions to any of the forward-looking statements included herein to reflect
future events or developments.
Items 4-6. Not Applicable.
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Item 7. Financial Statements and Exhibits.
(a) Financial statements of businesses acquired.
Not applicable.
(b) Pro forma financial information.
Not applicable.
(c) Exhibits.
Exhibit 99.1 Press Release dated September 13, 1999.
Exhibit 99.2 Press Release dated September 15, 1999.
Items 8-9. Not Applicable.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
VENCOR, INC.
Dated: September 15, 1999 By: /s/ Richard A. Lechleiter
--------------------------
Richard A. Lechleiter
Vice President, Finance,
Corporate Controller and
Treasurer
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Exhibit 99.1
[Logo of Vencor, Inc. appears here]
Contact: Susan E. Moss
Vice President of Corporate Communications
(502) 596-7296
VENCOR, INC. FILES FOR CHAPTER 11 PROTECTION;
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$100 MILLION DEBTOR IN POSSESSION FINANCING SECURED;
----------------------------------------------------
NORMAL OPERATONS TO CONTINUE IN ALL FACILITIES
----------------------------------------------
Louisville, KY (September 13, 1999) ---Vencor, Inc. today announced that it and
several of its subsidiaries filed a petition for protection under Chapter 11 of
the U.S. Bankruptcy Code with the U.S. Bankruptcy Court in Delaware.
In announcing today's Chapter 11 filing, company management emphasized that the
filing has been organized to permit normal operations of its nursing centers,
hospitals, and ancillary services business.
The company also announced that it has obtained agreements for debtor-in-
possession (DIP) financing with a bank group led by Morgan Guaranty Trust
Company of New York in the aggregate principal amount of $100 million. The DIP
financing and existing cash flows, upon bankruptcy court approval, will be used
to fund the company's ongoing operations.
Along with the petition, Vencor also has a plan of reorganization in progress
that includes terms negotiated with key parties, including Vencor's bank
lenders, subordinated debtholders, and Ventas, Inc. (NYSE: VTR), the company's
primary landlord. In addition, a settlement is in progress with the Department
of Justice, acting on behalf of the Health Care Financing Administration and the
Department of Health and Human Services' Office of the Inspector General,
concerning the government's outstanding claims against the company, including
outstanding routine reimbursement issues.
Edward L. Kuntz, chairman, chief executive officer and president of Vencor,
stated, "Filing for reorganization was necessary to enable us to create a
sustainable capital structure, while we continue to provide high-quality
healthcare services to those people who cannot take care of themselves." Kuntz
added, "The reorganization also was necessary because of the dramatic changes
impacting the long-term care industry, most notably decreased Medicare
reimbursement. We believe we are taking the appropriate steps to assure that we
emerge from the reorganization process with a sound capital structure that will
enhance the vital services that our dedicated employees provide to our patients,
residents, and customers."
Vencor, Inc. is a long-term healthcare provider operating nursing centers,
hospitals, and ancillary contract services in 46 states.
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Exhibit 99.2
[Logo of Vencor, Inc. appears here]
CONTACT: Susan E. Moss
Vice President of Corporate Communications
(502) 596-7296
VENCOR RECEIVES APPROVAL OF FIRST-DAY ORDERS IN CONNECTION WITH RESTRUCTURING
UNDER CHAPTER 11
VENCOR AND VENTAS REACH AGREEMENT REGARDING RENT PAYMENTS DURING RESTRUCTURING
Louisville, KY (September 15, 1999) ---Vencor, Inc. (the "Company") today
announced that the United States Bankruptcy Court for the District of Delaware
(the "Court") entered first day orders granting authority to the Company and its
subsidiaries to pay pre-petition and post-petition employee wages, salaries,
benefits and other employee obligations. The Court also approved orders
granting authority, among other things, to pay pre-petition claims of certain
critical vendors, utilities and patient obligations. Until approval of its plan
of reorganization, the Company intends to pay post-petition claims of all other
vendors and providers in the ordinary course of business.
The Court also approved, on an interim basis, the Company's $100 million
debtor-in-possession financing (the "DIP Financing") with a bank group led by
Morgan Guaranty Trust Company of New York. The final hearing on the DIP
Financing is scheduled for October 1, 1999. The DIP financing and existing cash
flows will be used to fund the Company's ongoing operations during the
restructuring.
During the restructuring, the Company and Ventas, Inc. (NYSE: VTR) have
entered into a stipulation (the "Stipulation") for the payment by the Company of
a reduced monthly rent payment of approximately $15.1 million beginning in
September. The Stipulation was approved by the Court. The reduced rental
payment for September is due on September 16 with the remaining monthly rental
payments required to be made on the fifth day of each month or the first
business day thereafter. Beginning in September, the difference between the
base rent under the Company's existing master leases with Ventas and the reduced
monthly rent payment of approximately $15.1 million will accrue as an
administrative expense, subject to challenge in the Chapter 11 case. Unpaid
August rent of approximately $18.9 million will constitute a claim by Ventas in
the Chapter 11 case.
The Stipulation also continues to toll any statutes of limitations or other
time constraints in a bankruptcy proceeding for claims that might be asserted by
the Company against Ventas.
<PAGE>
The Stipulation expires on October 31, 1999, but automatically renews for
one-month periods unless either party provides a fourteen-day notice of
termination. The Stipulation also may be terminated prior to its expiration upon
a payment default by the Company, the consummation of the Company's plan of
reorganization or the occurrence of certain defaults under the DIP Financing.
As previously disclosed, the Company continues to develop its plan of
reorganization that includes terms negotiated with key parties, including the
Company's bank lenders, subordinated debtholders, and Ventas. In addition,
settlement negotiations are continuing with the Department of Justice, acting on
behalf of the Health Care Financing Administration and the Department of Health
and Human Services' Office of the Inspector General, concerning the government's
outstanding claims against the Company, including outstanding routine
reimbursement issues. As announced to the Court during the hearings on the
first day motions, the Company does believe, that subject to certain conditions
including entering into definitive agreements, an overall understanding on the
broad economic terms of the Company's plan of reorganization has been reached
with these key parties.
Certain statements set forth above, including, but not limited to,
statements containing the words "anticipates," "believes," "expects," "intends,"
"will," "may" and similar words constitute forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Such forward-
looking statements are based on management's current expectations and include
known and unknown risks, uncertainties and other factors, many of which the
Company is unable to predict or control, that may cause the Company's actual
results or performance to differ materially from any future results or
performance expressed or implied by such forward-looking statements. These
statements involve risks, uncertainties and other factors detailed from time to
time in the Company's filings with the Securities and Exchange Commission. Such
factors may include, without limitation, the delays or the inability to complete
the Company's plan of reorganization; the availability and terms of capital in
light of recent losses, cash flow shortfalls and the Company's Chapter 11
bankruptcy filing; adverse actions which may be taken by creditors and the
outcome of various bankruptcy proceedings; the Company's ability to attract
patients given its current financial position; and the effects of healthcare
reform and legislation on the Company's business strategy and operations. The
Company cautions investors that any forward-looking statements made by the
Company are not guarantees of future performance. The Company disclaims any
obligation to update any such factors or to announce publicly the results of any
revisions to any of the forward-looking statements included herein to reflect
future events or developments.
Vencor, Inc. is a long-term healthcare provider operating nursing centers,
hospitals, and ancillary contract services in 46 states.
