A controversial decision could be a "nightmare" for the government, a legal expert says.

Amidst negotiations over its future, HCR ManorCare announced Monday that President and CEO Paul Ormond would step down after more than three decades at the company. Steve Cavanaugh, executive vice president and COO for the company, has been appointed to take his place.

“It is a tremendous honor and privilege to be selected to serve as President and CEO of this great company,” Cavanaugh said in a statement provided to McKnight’s Long-Term Care News. “Paul has been one of the best leaders in all of healthcare for many years and a tremendous mentor and role model for me throughout my career. It is truly humbling and inspiring to have the opportunity to succeed him in the Chief Executive Officer role.”

Quality Care Properties, ManorCare’s landlord, also announced Monday that had agreed to allow more time for “workout discussions” related to its receivership complaint.

QCP initiated the receivership process in August, after the skilled nursing operator failed to pay rents it owed to the REIT. ManorCare and QCP set Oct. 18 as the deadline for the former to respond to the receivership complaint, subject to court approval. ManorCare owes QCP more than $385 million in rent and other obligations.

ManorCare said in a statement that “under Steve’s leadership, HCR ManorCare will continue to work with QCP to find a consensual solution to the challenges facing the two companies.”