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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 OBTAINS EXTENSION TO FILE ITS PLAN OF REORGANIZATION
Louisville, KY (May 31, 2000) --- Vencor, Inc. (the "Company") today
announced that the United States Bankruptcy Court for the District of Delaware
(the "Court") has approved the Company's motion to extend the Company's
exclusive right to file its plan of reorganization through July 18, 2000.
In support of its motion, the Company informed the Court that it has
continued to make progress in the reorganization proceedings. The Company also
noted that it 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 continued to engage in discussions with Ventas, Inc. (NYSE:
VTR) to obtain its support for a consensual plan of reorganization but is
simultaneously pursuing other alternatives.
The Company also informed the Court that it has continued its
conversations with the Department of Justice regarding a settlement of the
ongoing investigations and the negotiation of other agreements with the Company.
"We are disappointed that Ventas has attempted to misconstrue the current
negotiations as an effort by various constituencies to reduce its dividend,"
said Edward L. Kuntz, chairman, chief executive officer and president of Vencor.
"Our goal from the outset of the reorganization has been to attain a sustainable
capital structure for Vencor that will be fair to all lenders, landlords and
other creditors and that will enable us to continue to provide high quality care
to those people who cannot take care of themselves. We remain committed to that
goal."
"Unfortunately, the recent public statements by Ventas' management are
counter-productive to our efforts to reach an appropriate compromise for all
parties involved in the reorganization, including Ventas," Mr. Kuntz said.
"These inflammatory statements against the banks and other financial
institutions, many of which also hold significant stakes in Ventas, attempt to
play on local sentiment rather than address the issues necessary to reach a
consensual plan of reorganization."
In addition, the Company announced that the Court approved a tax
stipulation agreement between the Company and Ventas (the "Tax Agreement"). In
connection with the spin-off of the Company in 1998, Ventas and the Company
entered into a tax allocation agreement under which Ventas agreed that the
Company would be entitled to any tax refunds associated with its former
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healthcare operations. In early February, a federal tax refund in excess of $26
million was received by Ventas. The Company has asserted that it is entitled to
the refund under several grounds, including the terms of the existing tax
allocation agreement. Accordingly, the Company demanded that Ventas enter into
the Tax Agreement which provides that refunds of federal, state and local taxes
received by either company on or after September 13, 1999 be held by the
recipient of such refunds in segregated interest bearing accounts. The Tax
Agreement requires notification before either party can withdraw funds from the
segregated accounts.
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 debtor-in-possession financing; 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.
