Kindred sues Ventas over rent flap
Nursing home chain Kindred Healthcare Inc. has filed a lawsuit in New York State Supreme Court against its main landlord, Ventas Inc., in an ongoing conflict over proposed rent increases.Ventas has demanded that Kindred produce market appraisals for the 225 facilities it rents to Kindred as part of the rent increase process. The lawsuit seeks an injunction to avoid turning over the documents to Ventas. In May, Ventas, a real estate investment trust, announced it was seeking a 54% increase in rents, or a hike of $111 million.
"Ventas' position is a meritless ploy designed to obtain materials to which Ventas has no entitlement, so as to afford Ventas an unfair advantage in the rent reset process," said Kindred prepared statement. The company said it had hired five separate national appraisal firms to conduct appraisals of the fair market rental for each of the leased properties under its master lease agreements with Ventas.
Ventas vigorously asserts its right to see the appraisals, under contract terms agreed to when Ventas helped bail Kindred out of bankruptcy proceedings five years ago.
"We are baffled by Kindred's actions, Ventas Chairman, President and CEO Debra A. Cafaro said Monday in a statement. "The Master Leases were written to give Ventas full and transparent access to all information regarding facilities. There is no provision in the Master Leases (and Kindred does not refer to one) that would preclude Ventas's right to receive these reports."
The New York court has agreed to hear the motion for preliminary injunction June 29. On Monday, the companies stipulated that Kindred would not pursue its motions for emergency injunctive relief and Ventas would not do anything more toward terminating any part of the master lease or declare default until after the hearing. Both companies are based in Louisville, KY.