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Exhibit 99.1
Contact: Lisa Salamon, Media Relations
(610) 444-8433
Investor Relations
(888) 295-8621
MULTICARE FILES VOLUNTARY PETITION FOR BANKRUPTCY PROTECTION
Receives Commitment for up to $50 million in DIP Financing
KENNETT SQUARE, PA--June 22, 2000--The Multicare Companies, Inc. and certain
affiliates today filed voluntary petitions with the U.S. Bankruptcy Court in
Delaware to reorganize its capital structure under Chapter 11 of the U.S.
Bankruptcy Code. The company elected to seek court protection in order to
facilitate efforts to restructure capital obligations in the wake of drastic,
unanticipated cuts in Federal payment systems that reimburse the company for
skilled nursing care and ancillary services.
To ensure that the company has the short-term working capital necessary to
provide care and services to residing customers, Multicare obtained a commitment
for up to $50 million in debtor in possession ("DIP") financing with a lender
group led by Mellon Bank. The company has requested the Court's permission to
access the DIP financing to fund normal business operations and other cash needs
during the Chapter 11 case.
"Deep cuts in Medicare reimbursements, which far exceeded all government
forecasts coupled with chronic underfunding of Medicaid reimbursements, have
severely impacted Multicare's ability to service our current capital structure,"
said chairman and chief executive officer, Michael R. Walker. "Chapter 11
protection ensures that employees can focus their attention on serving our
customers while we restructure our long-term debt."
Due to debt repayment obligations, the company has been in negotiations with its
senior bank lenders and subordinated debt holders since March 21. The company
believes that Court protection afforded by Chapter 11 will enable it to develop
a plan of reorganization with the goal of emerging from the case in a healthier
financial position.
In a separate action, Genesis Health Ventures (NYSE:GHV), 43.6% owner of
Multicare, also filed for Chapter 11 protection in Delaware this morning.
The Multicare Companies, Inc.-a corporation principally owned by Genesis-owns
and manages skilled nursing and assisted living facilities in the eastern and
midwestern U.S. Multicare's 141 owned and managed facilities are operated by
Genesis ElderCare.
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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 the company'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.
