A Texas bankruptcy judge this week gave his final blessing to struggling Orianna Health Systems’ reorganization plans after months of back-and-forth wrangling in court.
Under the agreement, creditors will receive the lion’s share of the $225 million sale price for the Nashville-based skilled nursing and hospice care provider. Orianna, which operates 42 SNFs and hospice facilities in seven states, filed for Chapter 11 bankruptcy protection in March 2018.
The process was supposed to be simple and quick, but the original deal with major creditors fell apart, Orianna attorney Thomas Califano told Bloomberg Law Thursday. He called it the “the toughest, most litigious case in my 30-year career.”
Unsecured creditors will receive about $7.4 million for more than $60 million in debt claims, the report noted. It’s unclear what percentage of creditors’ claims will be recovered because malpractice and tort dues still need to be examined.
No residents in the 42 facilities have been displaced during the process. Under the settlement, landlord Omega Healthcare Investors has agreed to contribute the $7.4 million for unsecured creditors. Attorneys for Orianna will waive $300,000 of their approximately $9 million in fees, Califano told Bloomberg.
In a November earnings call, Omega CEO Taylor Pickett called the bankruptcy process “a beast” and expressed optimism that they would soon be closing the book on dealings with the troubled tenant. At that time, Omega had transitioned 22 former Oriana properties to new operators, was selling another, and hoping to unload 19 more by the end of 2019’s first quarter.