Sabra Healthcare is dropping its lawsuit against beleaguered tenant Senior Care Centers, which is currently mired in bankruptcy.
The Irvine, CA, skilled nursing landlord first sued its once-largest tenant in December, worried that SCC might jeopardize a $385 million sale of the properties it occupies. But now, Sabra has reached an agreement to drop those claims in exchange for a settlement payment.
Under the agreement, inked Feb. 15, Senior Care will pay a settlement payment of $5.7 million, a portion of which will cover rent payments. The agreement is still subject to approval by a bankruptcy court judge, and payments will coincide with the sale of Sabra’s 28 properties, which are now expected to fetch $282.5 million.
In the announcement released Sunday in advance of today’s earnings call, Sabra CEO Rick Matros reiterated that he hopes to close the sale of 28 Senior Care Centers — along with bringing in a new tenant for 10 more that it is now retaining — by April 1.
“With the repositioning of our company close to completion, we look forward to growing from a stronger foundation than existed 18 months ago,” he said.
Sabra said that it also expects to incur $69.3 million in impairment and transition costs related to its SCC properties.
Senior Care Centers, which is Texas’ largest nursing home operator, first filed for bankruptcy in December. Last month, Sabra announced that it was scaling back its original fire sale of its SCC properties, shaving 10 off of the list to unload.
