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Exhibit 99.1
[Logo of Vencor, Inc. appears here]
CONTACT: Richard A. Schweinhart
Senior Vice President and Chief Financial Officer
(502) 596-7379
Richard A. Lechleiter
Vice President, Finance,
Corporate Controller and Treasurer
(502) 596-7734
VENCOR EXTENDS MATURITY OF ITS DEBTOR-IN-POSSSESION FINANCING
AND OBTAINS COMMITMENT LETTER FOR RESTATED DIP FINANCING
Louisville, KY (June 14, 2000) ---Vencor, Inc. (the "Company") today
announced that it has agreed with its lenders to amend (the "Amendment") the
Company's debtor-in-possession financing (the "DIP Financing") to extend the
maturity until September 30, 2000. The Amendment also revises certain covenants
and permits the Company to file its plan of reorganization through July 18,
2000.
The Company also announced that it has entered into a commitment letter
(the "Commitment Letter") with certain of the DIP lenders to finance an amended
and restated debtor-in-possession credit agreement in an aggregate principal
amount of $90 million (the "Restated DIP"). The Restated DIP would become
effective in the event the Company became involved in a legal proceeding against
Ventas, Inc. (NYSE: VTR) concerning the transactions in which the Company was
spun-off from Ventas or the master lease agreements executed in connection with
the spin-off. Such a legal proceeding currently would constitute an event of
default under the existing DIP Financing. The Restated DIP would have a one-year
term beginning on its effective date. The consummation of the Restated DIP is
subject to other customary conditions contained in the Commitment Letter.
As previously disclosed, the Company has reached an understanding with
certain of its senior bank lenders, certain holders of the Company's $300
million 9 7/8% Guaranteed Senior Subordinated Notes due 2005 and the advisors to
the official committee of unsecured creditors regarding the broad terms of a
plan of reorganization. The Company also has made substantial progress in its
conversations with the Department of Justice regarding a settlement of the
ongoing investigations. The Company has continued to engage in discussions with
Ventas to obtain its support for a consensual plan of reorganization. At this
time, only Ventas is in disagreement with the Company over the terms of a
consensual plan of reorganization. While the filing of a consensual plan of
reorganization is the Company's preferred outcome, the Company believes that it
is taking prudent steps in the event a consensual plan of reorganization with
Ventas cannot be reached.
The DIP Financing and existing cash flows will be used to fund the
Company's
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operations during its restructuring. As of June 13, 2000, the Company had no
outstanding borrowings under the DIP Financing.
The United States Bankruptcy Court for the District of Delaware (the
"Court") must approve the Amendment and the Commitment Letter. The hearing on
this motion is scheduled for June 29, 2000.
Vencor and its subsidiaries filed voluntary petitions for reorganization
under Chapter 11 with the Court on September 13, 1999.
Vencor, Inc. is a national provider of long-term healthcare services
primarily operating nursing centers and hospitals.
Certain statements set forth above, including, but not limited to,
statements containing words such as "anticipate," "believe," "plan," "estimate,"
"expect," "intend," "may" and similar expressions are forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements are inherently uncertain, and stockholders must
recognize that actual results may differ materially from the Company's
expectations as a result of a variety of factors, including, without limitation,
those discussed below. 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. Factors that may affect the plans or results of the Company
include, without limitation, the ability of the Company to continue as a going
concern; the delays or the inability to complete the Company's plan of
reorganization; the ability of the Company to operate pursuant to the terms of
the DIP Financing; the Company's ability to satisfy the conditions in the
Commitment Letter and effectuate a Restated DIP; the ability of the Company to
operate successfully under the Chapter 11 cases; risks associated with operating
a business in Chapter 11; adverse actions which may be taken by creditors and
the outcome of various bankruptcy proceedings; adverse developments with respect
to the Company's liquidity or results of operations; the Company's ability to
attract patients given its current financial position; the ability of the
Company to attract and retain key executives and other personnel; the effects of
healthcare reform and legislation on the Company's business strategy and
operations; the Company's ability to control costs, including labor costs in
response to the prospective payment system; adverse developments with respect to
the Company's settlement discussions with the Department of Justice concerning
ongoing investigations; and the dramatic increase in the costs of defending and
insuring against alleged patient care liability claims. Many of these factors
are beyond the control of the Company and its management. 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 to reflect future events or developments.
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