NASHVILLE, Tenn. (Legal Newsline) -- Tennessee Attorney General Bob Cooper announced Friday that his office, the court-appointed receiver for two state nonprofits, a health care real estate investment trust and a health care service provider have agreed to resolve a long-standing dispute and subject of litigation.
The resolution of the litigation, together with the receiver's sale of 14 nursing homes and liquidation of the nonprofits' assets, will ultimately result in about $40 million for charitable purposes in Tennessee, Cooper said.
The attorney general had previously asked the Davidson County Chancery Court to place both of the nonprofits in receivership.
The receiver subsequently filed a lawsuit against National Health Investors Inc. and National HealthCare Corporation.
NHI helped to establish SeniorTrust of Florida Inc. and ElderTrust of Florida Inc., two Tennessee 501(c)(3) nonprofit corporations, in 2000.
Between 2001 and 2004, NHI sold a group of skilled nursing facilities in Missouri and Kansas to SeniorTrust and a group of skilled nursing facilities in Massachusetts and New Hampshire to ElderTrust.
The receiver's primary dispute with NHI concerned the financial terms on which NHI had sold and financed the purchase of the facilities to the nonprofits.
In 2007, NHC acquired the lease of a long-term care facility in Chattanooga, known as Standifer Place, from SeniorTrust.
The receiver's primary dispute with NHC concerned the financial terms on which NHC acquired the lease.
The receiver claimed that the terms of the various transactions with NHI and NHC were unfair to the nonprofits, a claim NHI and NHC disputed.
As part of the negotiated resolution, NHI will discount amounts it claims remain due from SeniorTrust and ElderTrust. SeniorTrust and ElderTrust will pay those discounted amounts, and NHI will acquire ElderTrust's skilled nursing facilities in Massachusetts and New Hampshire.
NHC has managed the skilled nursing facilities owned by SeniorTrust and ElderTrust since the facilities were acquired from NHI.
As part of the negotiated resolution, NHC paid additional amounts to resolve the receiver's claims.
As a result of the settlement, NHC also has agreed to lease from NHI the seven skilled nursing facilities in Massachusetts and New Hampshire, which were formerly owned by ElderTrust.
The Attorney General's Office, which oversees the state's nonprofits, expressed satisfaction with the settlement of these disputes, which is subject to approval by the court in which the receiverships are pending.
"We believe this settlement is in the best interest of the public and upholds the appropriate use of Tennessee charities," Cooper said.
"The court will ultimately determine how these funds can be used for charitable purposes, and the Office of the Attorney General will seek and welcome public input in that process."
From Legal Newsline: Reach Jessica Karmasek by email at email@example.com.