The CEO and chairman of Sabra Health Care REIT, Rick Matros, said Thursday he would have no issue with going through bankruptcy proceedings for tenant Signature Healthcare as a way to “cleanse” its balance sheet.

Matros said Signature’s performance has improved but “still requires some restructuring” among other comments to shareholders during the company’s third-quarter earnings call.

While the two are close to a deal, whether Signature and Sabra can restructure without bankruptcy depends on negotiations between the provider and plaintiffs in medical malpractice claims, Matros noted.

“If they’re reasonable in those negotiations, I think there’s every opportunity to restructure this outside of doing … a bankruptcy,” Matros told attendees on the call. “And if they’re not negotiating in good faith, then I, frankly, have no qualms … about going through a [bankruptcy] that would be relatively quick and painless to cleanse the balance sheet of the liability claims.”

Sabra currently serves as the landlord for 48 Signature facilities. In a statement to McKnight’s, Signature President and CEO Joe Steier said the company is “so proud of our stakeholders who are fighting the industry headwinds to continue to provide great care to the residents we serve.”

“Our management team continues to focus on improving quality, driving stakeholder engagement, and our customer experience. We are grateful to have our REITs and strategic partners supporting our company’s mission and vision during this time,” Steier said. “We are very hopeful for a positive outcome for everyone involved.”

Sabra has dropped its skilled nursing exposure from roughly 73% to 64%, Matros said on the call. The REIT also announced that it will put its remaining 43 Genesis facilities up for sale, with the transactions expected to take place in 2018.