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The many extracts on this page are from copyright material. They are reproduced here for educational purposes and to stimulate public debate about the provision of health care. I consider this to be "fair use" in the common interest. They should not be reproduced for commercial purposes.


In March 2001 Vencor was renamed Kindred Healthcare

Disclaimer:- The material is selective and not all inclusive. The extracts do not necessarily reflect the perspective of the original. Corporate denials and explanations have not been included. No claim is made that all of the matters referred to are true. The intention is to give the flavour of the material and an idea of the extent of the allegations. Can there be so much smoke without a large fire? This is a matter of public welfare and the interests of the pubic must be placed before those of the corporations.

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Introduction to this web page

My thesis is that corporate individuals live and build their meanings in the world of the marketplace. They respond to the impact of the other worlds by compartmentalising them, denying them and rationalising when denial becomes impossible. This page reveals the marketplace. It is intersected by the other pages but not in a deep or human manner.

To fully understand what is happening you should consider what was happening in the other Vencor worlds at the same time, and also what was happening in the rest of the marketplace. The fraud was alleged to have started at least in 1992 and much of Vencor's financial success was probably built on this.

The problem of deficient care was endemic to the corporate nursing home chains at least since the early 1990's. A review of Hillhaven's conduct before it was purchased by Vencor was titled "Hillhaven Unsafe Haven". I have no information about standards of care by Vencor before it entered the nursing home market, but it seems very likely that it inherited problems from Hillhaven and did nothing about them.

COMMENT:- Vencor bought Hillhaven which was once owned by Tenet/NME. It was spun off in the late 1980's under the same NME directors. Hillhaven, and so Vencor, Horizon and Sun Healthcare were therefore exposed to and acquired much of the disturbing culture developed by Tenet/NME, HCA and other large corporations during the 1970's and 1980's.

That they pursued many of the same financially successful policies is therefore not surprising, nor that this culture has become so widespread. At no stage did Tenet/NME staff fully confront what had happened or link their misconduct to their policies. The health care market simply ignored the lessons. To confront them would have meant confronting fundamental beliefs in the validity of the marketplace model.

The misuse of patients and the extensive fraud should be seen in this historical context. The first two extracts relate to this history.

New 'M Watch them grow, And grow.
New Mexico Business Journal, April. 1996 April, 1996 Vol 20; No 4; pg 15
Arlene Odenwald

And so we have Horizon/CMS Healthcare Corp. and Sun Healthcare Group Inc. friendly rivals and. one might say, spinoffs of another health care company, Hillhaven Corp., of Tacoma, Wash. which -- in a rather daring move -- Horizon attempted to acquire last year. Instead, Hillhaven was acquired by Vencor. Inc., Louisville. Ky., a long-term acute care company, one-fourth the size of Hillhaven. the company where Andrew Turner: 49, Sun's chairman. and Neal Elliott. 55, Horizon's chairman. met.
What is possible. however. are large companies that will dominate different regions of the country. Will the Sun slip over the Horizon, or will the Horizon swallow the Sun? Or will Vencor, the company that acquired Hillhaven, look with heightened interest at Hillhaven's children and try to create one. big--very big--happy family once again?

I have put the full article on the web site

Justice Department Probes Medicare Billing by Vencor
The Wall Street Journal 11/18/98
By Chris Adams and Michael Moss

Vencor, based in Louisville, Ky., began as an operator of long-term acute-care hospitals that specialized in treating patients dependent on ventilators to breathe. The hospitals thrived because of quirks in Medicare and private insurance policies and became enormously profitable. Today, Vencor owns about 60 such hospitals, although a majority of its revenue now comes from nursing homes and contracted services.

COMMENT:- The 1990's were years of vast profits and meteoric expansion by the nursing home chains. Vencor was out in front. It was the darling of Wall Street. I do not have many press reports from this time but have included references to it in the selected abstracts. It was take over or be taken over. Vencor's successful business was under threat from Columbia/HCA and it therefore moved into nursing homes by buying Hillhaven in 1995. Hillhaven (310 homes) was several times its size. This was before I became interested in nursing home chains. Like Columbia/HCA it tried to get into the HMO business and so control profits by being both purchaser and provider.

Some of the articles which follow reflect its continued expansion, its egotistical belief in its success, its unwillingness to confront an emerging threat, and its corporate extravagance. There are hints of trouble brewing but not from Vencor. When its profits started falling in 1998 Vencor did move to protect its shareholders and buffer the vulnerability of its capital assets to bankruptcy by splitting off ownership of its nursing homes into a separate REIT, named Ventas. A number of Vencor shareholders now claim that this was a fraudulent subterfuge to preserve Vencor at their expense.

Vencor extends Transitional bid
Modern Healthcare
1997 May - June

Vencor, a Louisville, Ky.-based long-term-care company, has extended the expiration date of its $639 million cash tender offer for Las Vegas-based Transitional Hospitals Corp. to June 10 from June 4. Vencor said about 11 million of Transitional's 39.9 million shares of common stock have been tendered at $16 per share. The deal would merge the two largest operators of long-term acute-care hospitals and is under federal antitrust probe.

Modern Healthcare June 30, 1997 Page 66 - News

A recent deal struck by Louisville, Ky.-based Vencor marks the first time a long-term-care provider has entered the payer side of the business.

Vencor has partnered with CNA, a Chicago-based insurance company, to launch a new long-term-care insurance product called Vencor Gold this fall.

Vencor, the nation's second-largest long-term-care company, will reinsure 50% of the risk through a wholly owned subsidiary and provide clinical and utilization review services. CNA has agreed to share 50% of the profits and to market and underwrite the product.
Reed said the product is targeted individuals over 50 who are looking for insurance to supplement their Medicare or Medicaid coverage.

Policyholders will receive discounts, which have yet to be detailed, on services provided by 314 skilled-nursing facilities owned by Vencor and more than 1,000 facilities that contract with Vencor's Vencare division for rehabilitation and other therapies. If policyholders go outside Vencor's network, they can still receive benefits but at lower rates.

Reed said Vencor is betting that the private sector will be expected to pick up more and more of the nation's long-term-care costs as the government looks for ways to reduce the rate of growth in the federal Medicare and Medicaid programs.
With its deal, Vencor is merely getting its feet wet in the insurance business compared with the
head-first efforts of other healthcare providers.

Vencor's risks have been minimized, noted Stephen O'Neil, a vice president at Hilliard Lyons in Louisville, by partnering with an established underwriter rather than developing a new infrastructure or acquiring an existing insurance company.-
-Charlotte Snow

Vencor investor reduces its stake
The Courier-Journal (Louisville, KY.) October 18, 1998

Vencor has lost some support from a big backer, but picked up an endorsement from another corner.

Franklin Resources, a mutual-fund company that includes noted investor Michael Price, apparently has cut its stake in Vencor by about a third,-
-According to I/B/E/S International, Vencor was recently rated by one analyst as a strong buy and by two others as a buy; 10 analysts rated the stock a hold.

Modern healthcare Jan. 12, 1998 Page 41 Cover Story

Vencor, Louisville, Ky., acquired 56-bed Thompson Memorial Medical Center, Burbank, for undisclosed terms and renamed it Vencor Hospital-Burbank.

Modern Healthcare Feb. 2, 1998 Page 50 News

A number of joint venture outpatient surgery centers between doctors and hospitals are under way with more expected to come, and long-term-care provider Vencor recently announced it would open a facility in the market.

Size does matter; healthcare industry mergers and acquisitions; Cover Story
Hospitals & Health Networks June 20, 1998 SECTION: No. 12, Vol. 72; Pg. 28;
Blecher, Michele Bitoun

1. Vencor acquired Transitional Hospitals $ 628 million

1. Vencor acquired TheraTx $ 515

J.C. Bradford & Co. analyst upbeat on Vencor stock
Business First-Louisville October 5, 1998

A number of changes at Vencor Inc. prompted one analyst to put out a buy rating on the company's stock. Frank Morgan, an analyst with J.C. Bradford & Co. in Nashville, increased his rating from neutral to buy. "While earnings visibility is admittedly low for Vencor and the industry, we sense a turn in the company's business prospects," according to a Sept. 29 report.
The new payment system gives Vencor a chance to make a profit, if it can keep its costs below the Medicare payment, Lechleiter said. He said the Medicare census has been more than 4,100 a day recently. In addition, Vencor is making strides in its cost-reduction program - -
Vencor's appointment of Edward L. Kuntz as president and chief operating officer is good for the company-
-W. Bruce Lunsford, Vencor's chairman and chief executive officer, gave up the title of president to Kuntz. Vencor began by operating long-term, acute-care facilities and didn't enter the nursing home business until it acquired Hillhaven Corp. in September 1995.
Ventas is a real estate company that owns and manages the facilities where Vencor provides patient care. Morgan also revised his 1999 estimate to a gain of 12 cents a share, up from 10 cents per share. Vencor isn't making any projections about earnings and isn't saying whether or not it agrees with analysts, Lechleiter said.

Vencor Inc. planning to buy One Commonwealth place
Business First-Louisville October 5, 1998

Vencor Inc. is negotiating with Aegon N.V. to buy its One Commonwealth Place office building on Broadway between Fourth and Fifth streets. Vencor plans to consolidate its headquarters operations there at least temporarily. Buying the three-building complex from Aegon, which acquired the property in its purchase of Providian Corp. assets in 1997, does not mean Vencor is giving up on the $ 60 million signature skyscraper planned for River Road and Sixth Street, said Susan Moss, Vencor's vice president of corporate communications. "That is still a dream Vencor has," Moss said. "This just means it is on hold for right now. This is our immediate solution to have everyone in one building."
One Commonwealth Place, which is assessed at $ 36 million for tax purposes. A closing date for the sale has not been set, but Moss said Vencor plans to begin relocating as many as 800 employees, now located in four buildings, to the complex during the second quarter of 1999.
Vencor delayed construction of a swirling glass-encased office tower designed by internationally renown architect Henry Cobb. The postponement is just one of several steps Vencor has taken to reduce operating costs by $ 100 million and to shore up sagging stock values.
The decision to relocate to an existing structure - even though temporary -may mean that Vencor likely will have to give up some of the $ 11 million in incentives provided by the state and city to keep the company from moving its headquarters to Cincinnati in 1996.
The $ 11 million financial commitment was contingent on Vencor spending at least $ 35 million for corporate offices and having a minimum of 900 employees at the headquarters operation before the end of 2000.

Vencor Reports Third Quarter Results; Turnaround Plan On Track
Business Wire October 22, 1998

W. Bruce Lunsford, Chairman and Chief Executive Officer, commented, "This quarter has been one of the most challenging in our history, and I am pleased to report significant progress in our turnaround efforts.-
-Our nursing center average daily Medicare census in September approached 4,000, and our cost reduction programs were implemented successfully in our three operating divisions and our corporate office. The improvements in our operating results demonstrate that we are managing effectively the unprecedented changes in Medicare reimbursement impacting our industry.

Ventas, Inc. Reports Third Quarter Results
Business Wire October 22, 1998

Ventas reported that it has invested $ 14.5 million through October 15, 1998 to acquire healthcare-related properties. The properties purchased include two skilled nursing centers and eight personal care facilities for individuals with acquired/traumatic brain injuries.

Ventas, Inc. is a real estate company whose properties include 219 nursing centers, 46 hospitals and eight personal care facilities in 36 states.

Vencor Inc.'s third-quarter loss is smaller than expected Period was first under flat-rate Medicare rules
Courier-Journal (Louisville, KY.) October 23, 1998

Vencor Inc. announced a third-quarter loss yesterday, but it was smaller than analysts had predicted as the Louisville-based long-term-care company worked to adapt to a new Medicare payment system. It reported a loss of $ 1.1 million, or 2 cents a share, excluding special charges and gains. That was an improvement from a loss of $ 8.7 million, or 13 cents per share, in the preceding quarter. Analysts had expected a loss of 7 cents a share.-
-''You get to a quarter which shows, at least upon first glance, a lot of improvements,'' said Charles Lynch, an analyst at Schroder & Co. who has a ''neutral'' rating on Vencor.-
-The third quarter was marked by an executive shakeup as Vencor struggled to recover from financial losses and damaged credibility in the second quarter, when red ink was revealed just weeks after the company predicted a profit.-
-Ventas Inc., the spinoff created this year, said funds from operations totaled $ 23.7 million, or 35 cents per share, for the period. -------- Ventas shares closed up 62 cents at $ 11.06 yesterday.

Mount Carmel owner faces scrutiny elsewhere From Minnesota to Florida, Vencor is drawing regulators' attention
Milwaukee Journal Sentinel October 25, 1998
COMMENT:- An outcry about deficiencies in care in Vencor homes had started. The reports describing what happened at Mount Carmel are in separate files

Vencor, formed in 1985 and specializing in intensive care hospitals, burst into the nursing home business in 1995. It instantly became the fourth-largest chain in the nation when it bought up the 310-home for-profit Hillhaven chain. Its nursing home revenue topped $1.7 billion last year.

Lunsford drops Ventas CEO job
The Courier-Journal November 19, 1998

Bruce Lunsford, chairman of nursing-home giant Vencor Inc. and its related real-estate company, Ventas Inc., is giving up one of his Ventas positions.

Ventas, which owns the properties in which Vencor operates nursing homes and long-term-care hospitals, was split off from Vencor in May (1998). At the time, Lunsford was chairman and CEO of both companies. -- - - - - Ventas formally becomes a real-estate-investment trust in January and said the company wanted to have Ladt's promotion in place before then.

Modern Healthcare Nov. 2, 1998 Page 6 News
COMMENT:- We still hear the claim that care is not compromised by profit. In the market profit opportunities rather than need determine health care policy and the services available to citizens. Economic theorists obtain social outcomes by pulling economic strings. The USA has been manipulating the system this way (e.g. 1997 Medicare funding changes ) and made a horrible mess of it. When confronted by a profit driven distortion in the distribution of aged care services Australia's federal minister for aged care Mrs. Bronwyn Bishop (Jan 2001) promised to correct the problem the same way. This article describes the phenomenon in home care services in the USA and shows how available care is determined by profit and not the needs of the community.

The 30 home health agencies will accept no new patients as of Nov. 1, and existing patients will be transferred to other providers. "Patient care will not be compromised," said Executive Vice President Anthony Tanner.-
-HealthSouth is not alone in viewing home health as unprofitable. The National Association for Home Care estimates that more than 1,200 home health agencies have closed this year, representing about 12% of total agencies, due largely to lower reimbursements under a transitional Medicare payment system. The system, which took effect in October 1997, reduced reimbursement by an average 14%.

Vencor, a Louisville, Ky.-based long-term-care company, announced in May it was getting out of the home-care business. On Friday, IHS announced that it will sell its home health nursing division.

Modern Healthcare November 09, 1998
COMMENT:- Here is another example of profit rather than need driving care. Some may recall the enormous enthusiasm for post acute care by Sun Healthcare's Andrew Turner and the way it inspired Australia's federal Minister for Health. Remember also the way Mayne Nickless adopted the policy of "One Stop" medicine. While all of these ideas have merit in meeting the needs of patients they are dysfunctional when organised for profit. This article reports their failure. Note that the new funding system prevents cost shifting. This is one of the advantages for corporations but as we know in Australia a big problem for funders.

Hit by lower Medicare reimbursement rates under a transitional payment system implemented in October 1997, Medicare-certified home health agencies are leaving the business in droves. ---- More than 1,200 have closed this year, according to the National Association for Home Care.-
-Vencor, a Louisville, Ky.-based long-term-care company, closed its 21 home-care agencies over the past several months as part of its effort to refocus on core operations, long-term acute-care hospitals and nursing homes. The home-care agencies accounted for only 2% of annual revenues, the company said.-
-''The idea was to be a one-stop shop,'' Dodd said. Theoretically, offering services along the continuum of post-acute-care allows a company to feed patients from one operating unit to another. But many companies, including IHS, apparently were unable to make such cross-referrals profitable, she said

Part of the problem, Dodd said, is that some companies were interested in their home health units less from an operations standpoint than from a financial one.

''The recognized cost-shift that was out there was a windfall for a lot of large organizations,'' she said. Under the new reimbursement system, companies can charge Medicare only minimal overhead costs.-
-NAHC spokesman Ron Kolonovski said he expects more closings.

''You will see a wave of agencies reorganizing and downsizing. The next six months will be a critical period,'' he said.

COMMENT:- By the end of 1998 Vencor is being forced to confront its falling profit flow and belatedly starts to do something about it. It fails to recognise the extent of its problems. It appoints a lot of new staff. The inevitable happens and it crumbles into Chapter 11 bankruptcy.

Several Nursing Home Companies Placed on S&P CreditWatch Negative
PR Newswire November 3, 1998

Standard & Poor's today placed its ratings for several nursing home companies on CreditWatch with negative implications (see list below). The CreditWatch listings affect over $8 billion in rated debt.-
Vencor Operating, Inc.
Corporate credit rating ------- B+

Subordinated debt ----------- B
Bank loan rating ------------ B+

Vencor Announces Receipt of $ 22 Million From Sale of Its Investment in Colorado MEDtech, Inc.
Business Wire November 6, 1998

Vencor, Inc. (NYSE: VC) today announced the receipt of approximately $ 22 million from the sale of its investment in Colorado MEDtech, Inc. (NASDAQ: CMED). Proceeds from the sale were used to reduce outstanding indebtedness.

Thomas T. Ladt Named Chief Executive Officer of Ventas
Business Wire November 17, 1998

The Board of Directors for Ventas, Inc. (NYSE: VTR) today announced that Thomas T. Ladt, President of Ventas, will become Chief Executive Officer effective January 1, 1999. Ladt will replace Bruce Lunsford, who is currently Chairman and Chief Executive Officer of Ventas. Lunsford will remain Chairman of Ventas.

"Tom Ladt is the ideal choice to become CEO since he has served as President of Ventas from its inception," said Lunsford. "This will allow me more time to focus my day-to-day energies on Vencor. "

U.S. attorney investigating Vencor;
The Tampa Tribune November 19, 1998
COMMENT:- By the end of 1998 several Qui Tam whistle blower actions were before the government and it had commenced its fraud investigations. The press reports on these are in another file.

Since May, Vencor's stock has fallen more than 67 percent. Vencor shares closed Wednesday at $ 4.683/4.

Vencor names three division chiefs ; Reorganization now complete
The Courier-Journal (Louisville, KY.) November 25, 1998
COMMENT:- Note Schweinhart is from Columbia/HCA by this time under investigation for a massive fraud

Vencor Inc., the Louisville-based long-term-care company, has completed its reorganization by naming presidents for its three divisions, including a nursing-industry executive from outside.

The company yesterday announced the appointment of Donald D. Finney, CEO at HCMF Corp., as president of its nursing-center division starting Jan. 4. ---------- Frank Battafarano will become president of Vencor's hospital division, and Frank Anastasio will become president of Vencare, the company's ancillary- services division.

Vencare provides respiratory, rehab and other services to other companies.-
------ In September it appointed Edward L. Kuntz, a former chairman and CEO of a competing company - - - - - and Richard A. Schweinhart, a senior vice president of Columbia/HCA Healthcare Corp., as chief financial officer. Vencor's stock closed yesterday at $ 4.56, up 12M cents.

COMMENT:- The way Vencor's "business decision" to discharge unprofitable Medicaid patients went very sour is recorded in another page of extracts. Its about face is recorded in the next article.

Vencor owns more than 200 nursing homes and about 60 hospitals. The company, which has annual revenues of $3 billion, got into the nursing home business in 1995 when it acquired Tacoma-based Hillhaven Corp.

Bed News: The Business Potential Of Nursing Homes Is Elusive, Vencor Finds: Bid for High-Paying Patients Brings Firm Headaches, And It Has to Regroup: Medicaid Is Welcome Now
The Wall Street Journal 12/24/98
By Chris Adams and Michael Moss

When Vencor, an operator of specialized hospitals, announced the acquisition of a big chain of nursing homes three years ago, it billed the move as a master stroke: The company would have an integrated health-care network, providing a broad range of care to America's growing population of elderly people.-
Vencor got its start 13 years ago by creating a health-care niche: It opened hospitals for long-term patients who needed a respirator to breathe. Leading the new business were Mr. Lunsford, a charismatic former Kentucky secretary of commerce with an interest in horse racing, and Michael Barr, who was a respiratory therapist. The hospitals were tightly regimented and enormously profitable. The company went public in 1989 and its stock shot up 500% in just over two years.

Its move into nursing homes was partly defensive. Columbia/HCA Healthcare Corp. and others were setting up hospital networks that threatened the growth of Vencor, which had no more than one facility in most markets. Mr. Lunsford decided the way to grow was to become an integrated long-term-care provider. Vencor swallowed Hillhaven Corp., a company that had about 300 nursing homes and was several times Vencor's size.

Vencor to Seek Appraisal of Its Investment in Behavioral Healthcare Corporation
Business Wire December 30, 1998

Vencor, Inc. (NYSE: VC) today announced that it intends to engage an independent investment adviser to appraise its equity investment in Behavioral Healthcare Corporation ("BHC"), a privately held operator of psychiatric hospitals headquartered in Nashville, Tenn.

In connection with this appraisal, the Company anticipates that it will incur a charge to earnings in the fourth quarter related to the expected write-down of the value of its investment in BHC. The current net book value of the Company's investment in BHC approximates $ 63 million. The Company is continuing to explore alternatives to monetize its investment in BHC as part of its overall strategy to reduce the Company's leverage.

Nursing Homes (
COMMENT:- The ability to use corporate wealth to exert a profound political influence that is not in the interests of citizens is a major concern in the USA and increasingly in Australia. Health care is a major focus of these activities.

Lobbyist Spending: Hospitals/Nursing Homes

Client Total Spending

American Health Care Assn $326,000
American Hospital Assn $9,340,000
Beverly Enterprises $230,000
Columbia/HCA Healthcare Corp $360,000
Federation of American Health Systems $1,060,
Integrated Health Services $50,000
Manor Healthcare Corp $460,000
Vencor Inc $130,000

Lobbying data was compiled using 1998 lobby disclosure reports and amendments filed under the Lobbying Disclosure Act of 1995.

Please credit the Center for Responsive Politics.

My Note:- The federation of American Health Systems is the lobbying group for all the corporate health care chains. They also dominate the American Hospital Association. The corporations all contribute large sums for lobbying to these two groups. The other contributions listed for corporations are in addition. Corporate chains spend large amounts in political donations, lobbying and marketing in order to secure the legislation they want, and block that they don't want.

Health Care Property Investors Inc. Reports Earnings and Record Funds From Operations for Year Ended Dec. 31, 1998
Business Wire January 20, 1999, Wednesday
COMMENT:- Corporations often lease facilities from REIT's as shown for Vencor below. Vencor split itself in two in 1998 forming VENTAS as a REIT which owned all of Vencor's previous facilities and leased them to Vencor. It had the same directors and shareholders. This was a very clever ploy as when Vencor went bankrupt it had few assets left. Its capital assets were protected from the bankruptcy. Note Tenet/NME's involvement in guaranteeing the revenue from Vencor.

Health Care Property Investors Inc. (NYSE:HCP), an equity health care real estate investment trust (REIT), Wednesday announced operating results for the year ended Dec. 31, 1998.-

Revenue(4) Percentage

Grand Total $ 178,196 100.0%

HealthSouth Corporation 12,043 6.8%
Vencor, Inc.(5) 11,970 6.7%
Beverly Enterprises 11,592 6.5%
Emeritus Corporation 11,227 6.3%
Centennial Healthcare 8,887 5.0%
Columbia/HCA Healthcare 8,083 4.Tenet Healthcare 7,744 4.3%

(5) Guaranteed by Tenet. In addition, Tenet guarantees another 3.0% of revenues on leases to Vencor but operated by other providers.

Vencor founder, CEO Bruce Lunsford resigns
The Associated Press January 22, 1999
COMMENT:- Cofounder Barr resigned in 1998 after the Vencor Medicaid scandal. Now Lunsford, the main force behind Vencor's practices falls on his sword - or is pushed. Vencor will eventually be charged with a US $1.3 billion fraud but there is never any suggestion that Lunsford and Barr go to prison - or even pay fines. The shareholders pay. References and extracts relating to the matters listed as contributing to Lunsford's downfall are on other pages dealing with fraud and patient care.

Vencor Inc. announced Friday the resignation of Bruce Lunsford, the company's co-founder, board chairman and chief executive officer. - - - had appointed Edward L. Kuntz to replace Lunsford.

"Bruce's entrepreneurial spirit has been the driving force behind Vencor for these many years," Vencor co-founder and longtime director R. Gene Smith said in a statement late Friday. "His vision and passion have enabled Vencor to become one of the premier long-term health care providers in the country.-
-Lunsford was head of the company since its inception in 1985. The nation's second largest nursing home operator, Vencor's health-care network operates in 46 states with more than 65,000 employees.

  • U.S. Justice Department that --- billing practices were being investigated.
  • .U.S. Department of Health and Human Services --- was investigating Vencor,- -
    - reports the company violated Medicaid rules when it discharged (Medicaid) patients --- fined $ 270,000 by the state of Florida
  • is appealing a fine of at least $ 533,000 by the state of Georgia --- Medicaid transfers and the quality of care.
  • It also has been under investigation by Kentucky, Illinois and Wisconsin.

Lunsford quits as Vencor CEO; Failed to heal troubles of firm he co-founded
The Courier-Journal (Louisville, KY.) January 23, 1999

Bruce Lunsford (aged 51), who cofounded Vencor Inc. with three employees in 1985 and developed it into a Fortune 500 company with more than 65,000 workers, unexpectedly resigned yesterday as its chairman and chief executive officer.-
- - - one of Louisville's bestknown and most successful entrepreneurs, - - - Lunsford will stay on as chairman of Ventas, the real estate company formed last year to own the hospitals and nursing homes Vencor operates.

A former Kentucky commerce secretary, Lunsford started Vencor with one long- term care hospital and left it with 60, plus 292 nursing homes - perhaps the nation's largest provider of full-service, long-term care.-
-Vencor was primarily a hospital company until 1995, when it acquired the Hillhaven nursing home chain, which was four times the size of its new owner. Hillhaven's managers, with their nursing home expertise, did not stay with the merged company.

''Since today nearly 65 percent of our total revenues come from the nursing center side and since probably 95 percent of our problems have occurred from the nursing center side,'' Lunsford said yesterday, ''I think we need strong leadership in that area.''-
-''Given the progress they've made in the last six months, I view the situation as somewhat stable,'' O'Neil said. ''I didn't have any sense that Bruce was going to leave.''

Kuntz, the former chairman and CEO of Living Centers of America, takes over -- - - -
-Plans to build a $ 60 million riverfront headquarters tower, which were postponed to cut costs last year, have now been permanently shelved,-
-The company's June announcement that its earnings would be lower than forecast caused the company's stock to plummet last summer - reaching a low of $ 2.93, a fourth of where it stood in early May, shortly after the firm spun off its real estate into a separate company. The reality was even worse than the company predicted: The modest second quarter profit it forecast turned out to be an operating loss of $ 8.7 million.-
-Lunsford, who still owns between 2 percent and 3 percent of Vencor, said he'll take some time to reflect before deciding what else he will do.

The former commerce secretary under Gov. John Y. Brown said he would not rule out a run for public office, an ambition he has acknowledged in the past. But Lunsford quickly added that he has no plans to run for anything right now.

Business: Major U.S. provider of full-service long-term health care
Operations: Operates 60 long-term care hospitals and 292 nursing homes, and provides care-related services to other nursing
Headquarters: Louisville
Ownership: Publicly held
Founded: 1985
Employment: 65,000 including about 800 at Louisville corporate headquarters
Annual Revenue: About $ 3.1 billion
Stock: VC - NYSE
Yesterday's close: $ 4.44


Business: Real-estate investment trust
Operations: Owns hospitals and nursing homes in which Vencor does business, and leases them to Vencor; owns and manages other health-care properties
Headquarters: Louisville
Ownership: Publicly held
Founded: 1998
Employment: Fewer than 10
Funds From Operations: $ 23.7 million in the third quarter of 1998
Stock: VTR - Yesterday's close: $ 12.63

VENCOR'S TURMOIL; Stock price hurt by new rules, probes
The Courier-Journal (Louisville, KY.) January 23, 1999
COMMENT:- Nursing Home Chains all loudly blamed the changes in Medicare funding for their problems and pretended that their financial mismanagement, large depts, overservicing and fraud had nothing to do with it. I do not intend to include Vencor's claims in this regard after this.

Once high-flying Vencor Inc. has endured eight months of turbulence leading up to yesterday's sudden resignation of chairman and CEO Bruce Lunsford.

Much of the turbulence has stemmed from lower earnings due to changes in the Medicare reimbursement system. But it was exacerbated by government investigations into whether the Fortune 500 company discharged Medicaid patients to make room for private-paying ones.-
-The company said it planned to cut 1,000 jobs nationwide to save $ 100 million a year, and put on hold its plan to build a 23-story corporate headquarters on the Louisville waterfront.

The announcement wasn't well received by analysts and investors, and touched off a long-running slide in Vencor's stock, which eventually reached a low of $ 2.93 - a fourth of what its price had been in early May. The stock closed yesterday at $ 4.44.

- - - - - nation's largest full-service, long-term care company, and its long history of success. In the wake of the June announcement, the company undertook a series of personnel changes at the top, bringing in experienced outsiders to replace longtime Vencor insiders.-
-Coming in was turnaround specialist Stanley Gault, the retired chairman and CEO of Goodyear Tire and Rubber Co., who was also to assume the role of mentor and adviser to Lunsford.


Sept. 4, Reed as chief financial - - replaced by Richard Schweinhart, a senior vice president of Columbia/HCA Healthcare Corp.

Three weeks later, -- Barr also had resigned. --replacement: Edward L. Kuntz, a former chairman and CEO of a competing company, Living Centers of America. Kuntz later replacing Lunsford as chairman and CEO.

Vencor's shocking earnings announcement had come shortly after the company came under fire for Medicaid improprieties.

Vencor Announces Fourth Quarter Expectations
Business Wire January 26, 1999

Vencor Inc. (NYSE:VC) today announced that it expects earnings for the fourth quarter, exclusive of unusual transactions, to be substantially lower than the third quarter of 1998. - - - - , the Company reported a loss of $ 0.02 per share for the third quarter ended September 30, 1998. Operating results for the fourth quarter in each of the Company's three operating divisions are expected to be below management's expectations.-

- - - -Hillhaven, TheraTx and Transitional mergers, are also expected to impact negatively fourth quarter results. Certain shareholder litigation assumed in connection with the TheraTx acquisition has been recently settled - - - -approximatel $ 16 million-

- - write-down of its investment in a nursing center in Wisconsin and the previously announced write-down of its investment in Behavioral Healthcare Corporation.-

- - - - may be required to renegotiate its bank credit facility since the previously discussed operating results and adjustments may result in certain covenant violations. The Company is in discussions with its lead banks and anticipates that it will successfully conclude its negotiations prior to releasing its financial results for 1998.-

- - - we are now positioned to move forward. We are proceeding aggressively to address the challenges presented to our three business lines by a difficult industry environment.

Vencor expects heavy losses 4th quarter was worse than third, but new leader expects turnaround
The Courier-Journal (Louisville, KY.) January 27, 1999
COMMENT:- Although no one says it, in fact many are making positive noises, it is becoming clear that the company will soon go bankrupt.

Vencor Inc.,- - - announced yesterday that it expects heavy losses for the fourth quarter of 1998 - its third straight quarter of losses. - - - - will be ''substantially'' larger than the $ 1.1 million that the company lost in the third quarter. - - - may also force it to renegotiate $ 800 million in credit agreements, because its net worth may fall below the required level.-
- - emphasized yesterday that the company is up-to-date on all its payment obligations.

But one analyst, John Ransom of Raymond James & Associates, said Vencor has ''put itself in the position where they're on the financial precipice.''

In hindsight, Ransom added, ''the last three things ( Vencor) did have all turned out to be misguided.'' He cited the 1997 purchases of Transitional Hospitals Corp. and TheraTx Inc., a rehabilitation company, and last year's spinoff of Vencor's real estate into a separate company. - - - - ''We've put out several comments stating that we don't think there's any equity value in this company,'' Ransom said.-

- - - renegotiate include $ 500 million in outstanding term loans and a $ 300 million revolving line of credit that now has no outstanding balance. The main lenders are J.P. Morgan and Bank of America.

Briefs from Louisville, Owensboro, Cincinnati, Dale, Ind. --
-The Associated Press State January 28, 1999

Riverfront property once planned as the site of a $ 60 million headquarters for Vencor Inc. has been put up for sale-
-Besides putting the properties up for sale, Vencor also is negotiating with the state and city over incentives it was given as part of the effort to attract the headquarters project.

Vencor Obtains Bank Covenant Waiver
Business Wire February 3, 1999

Vencor, Inc. (NYSE:VC) today announced that it has obtained the necessary approval from its bank lending group to secure a covenant waiver related to its $ 800 million credit facility through March 31, 1999.

Lenders let battered Vencor keep borrowing Losses push health-care company below its net-worth requirement
The Courier-Journal (Louisville, KY.) February 5, 1999

Vencor Inc. said yesterday that a bank lending group has temporarily waived a net-worth requirement the company says it can't meet and will allow the nursing home and hospital operator to continue limited borrowing through the end of March.

Vencor, whose earnings have been hurt by lower Medicare reimbursements, announced last week that it would have to renegotiate $ 800 million in credit agreements with lead lenders J.P. Morgan and Bank of America, along with others, because the company expects to fall below a required net worth of $ 850 million when its 1998 fourth-quarter results are posted.

Nursing homes to spend up to $ 20 million to improve image
The Arkansas Democrat-Gazette February 07, 1999
COMMENT:- When Tenet/NME's disgraceful conduct was exposed in Texas in 1991 senior staff flew to Texas to interview public relations firms. They did not go to their hospitals. They saw this as primarily an image problem and did not consider the possibility that they were doing anything wrong. Months later the practices were unchanged. Similarly Vencor did not believe that its Medicaid practices were wrong. It continued to discriminate in its admissions and discharges even after being fined. The aged care chains are now adopting the Tenet/NME solution, going to PR firms.

WASHINGTON -- Nursing homes plan to spend as much as $ 20 million annually to improve an industry image battered by reports of poor-quality care and federal fraud investigations.

The American Health Care Association, representing nursing homes such as Beverly Enterprises Inc. and Vencor Inc., has asked public relations agencies to submit proposals for its campaign, which would begin in the year 2000.

AHCA is considering launching a multimillion dollar image campaign in the year 2000 which will improve the public's image and understanding of the nursing-home component of the long-term care industry," the trade association says in a letter to public relations agencies.

5 Healthcare Firms Ratings Cut By S&P Over Medicare Changes
Dow Jones Newswires March 3, 1999

NEW YORK -- Standard & Poor's said it lowered the ratings for five companies, and their subsidiaries, being impacted by Medicare's adoption of the restrictive Prospective Payment System (PPS) for the reimbursement of nursing homes.

The ratings for Vencor Operating Inc. also remain on CreditWatch with negative implications, S&P added. Ratings for Vencor were lowered on Jan. 26, 1999 after the company's public acknowledgement of "significant operating and financial challenges," S&P said.


To From- Vencor Operating Inc.

Corporate credit rating B
-Subordinated debt CCC

Bank loan rating B

Modern Healthcare March 08, 1999

The current B- corporate credit rating on IHS, Mariner and Sun-as well as Vencor, which was downgraded in January-indicates ''serious financial difficulties,'' Radinsky said. These companies may need to sell parts of their businesses to meet their debt obligations.

Ventas may sell some properties; Vencor landlord needs money to repay big loan
The Courier-Journal (Louisville, KY.) March 18, 1999
COMMENT:- Ventas may want to sell but so does everyone else. There are few buyers.

Ventas Inc. - the real-estate company joined at the financial hip to its only tenant, Vencor Inc. - says it is considering selling some of the hospitals or nursing homes that Vencor operates to repay a $ 275 million loan.-
-It has been speculated that Vencor may seek some relief from the $ 221- million-a-year rent agreements as a way out of its own credit crunch.-
-Investment firm Franklin Mutual Advisors Inc. - which held more than 9 million shares, or 13.3 percent of Ventas' common stock, and 6 million shares, or 9 percent of Vencor's common stock at the end of the year - confirmed Tuesday it had been getting rid of the stocks.

''We have substantially reduced those positions since year end,'' Franklin chief executive Peter Langerman said through a spokesperson.

Shares of Ventas rose 9 percent yesterday to close at $ 5.44. Vencor was unchanged at $ 1.06.

Vencor to sell site planned for tower Architectural drawings also to be up for bid
The Courier-Journal (Louisville, KY.) March 19, 1999

Vencor Inc. is bowing to financial reality and selling its dream. The gleaming tower Vencor once envisioned as a dramatic marker on plans and all.

Gene Smith resigns from Vencor board
Business First-Louisville March 22, 1999

Company co-founder cites potential for conflict with Ventas board post

R. Gene Smith has become the last founding father of Vencor Inc. to step away from the company.

Smith, who continues to own a significant block of stock in the health care company, resigned as vice chairman to erase what he called the perception of a conflict of interest because of his holdings in Ventas Inc. and his position as director of the real estate investment trust.-
-Shares in Vencor have ranged between a low of $ 1 and a high of $12.875 in the past 52 weeks. The stock closed at $ 1.0625 on March 17.

Ventas stock has ranged from $ 4.625 from $ 17.4375 in the past 52 weeks. Its stock closed at $ 5.4375 on March 17.-
-But Smith's departure does mean that none of the founders or original executives remain at Vencor.

Bruce Lunsford, Smith and Michael Barr started the company in 1985; Barr was removed from the board last spring, and he resigned as Vencor's chief operating officer in September. As chairman and chief executive officer, Lunsford spearheaded the transition of Vencor from a single long-term hospital to a Fortune 500 company with 292 nursing homes and 60 long-term hospitals. He resigned in January.

Vencor is auctioning old KingFish site to top bidder
Business First-Louisville March 22, 1999

Downtown site was once proposed location for $ 60 million headquarters.
Beleaguered Vencor Inc. will use a national auction company to sell the downtown sites once proposed for its $ 60 million headquarters

Bank Letter March 22, 1999

Vencor Inc.'s bank debt plummeted into the mid 50s from the low 70s last week as traders sold more than $ 30 million of the credit following a meeting between the company and its bank group. Traders said the company tried to get a permanent amendment to its bank agreement and an extension on the waiver it negotiated in early February, which is due to expire on March 31. "It was pretty ugly," said one trader, noting bids for Vencor stood at 83-85 in late January (BL, 2/1). "They have serious problems. The whole healthcare sector is breaking down and Vencor is one of the leaders [in the decline]," he said.-
-Analysts said the banks stood firm in the face of Vencor's pleas for mercy during the meeting. "The willingness of the banks to support and help the company work through what will be several tough quarters operationally was pretty low," one analyst said.-
-Analysts added Vencor's problem was also its lack of saleable assets. "They sold all their assets to [Ventas,] - -

Bank Letter March 29, 1999

Vencor Inc.'s bank debt continued to slide in trading last week as dealers flipped the paper in two $ 5 million trades at 55 and 52 in the Street. - - - - -. "The bonds are trading as if their next payment [in May] is going to be blocked by the bank group. They're going to restructure, almost certainly," one analyst said.

Vencor Addresses Capital Structure Issues - - Bank Credit Waiver Extended -- Company Discusses Rent Concessions with Ventas -- 1998 Form 10-K Filing Delayed
Business Wire March 31, 1999 - -

Vencor, Inc. (NYSE:VC) announced today that its senior bank lenders have granted a further waiver, through May 28, 1999, of breaches by Vencor of certain financial covenants under its bank credit facility.

Ventas, Inc. Filing of Annual Report On Form 10-K For Fiscal Year Ended December 31, 1998
Business Wire March 31, 1999
COMMENT:- Publicly listed companies are required to disclose information to the US Securities and Exchange Commission including annual reports. Failure to disclose is criminal but corporations choose their own words.

Ventas, Inc. (NYSE:VTR) announced today that it has filed its Annual Report on Form 10-K including the Company's audited financial statements for the year ended December 31, 1998 with the Securities and Exchange Commission.

Vencor has announced that it will incur a significant loss for 1998. This could have a material adverse effect on Vencor's financial condition and adversely affect its ability to make contractual and timely rental payments to the Company. - - - - -The Company's auditors have concluded that these matters raise substantial doubt about the Company's ability to continue as a going concern.-
-Vencor has requested interim rent concessions under its leases with the Company, and the Company has rejected that request.

More signs of problems for Vencor
The Associated Press State & Local Wire April 1, 1999

An independent auditor's report on Vencor Inc. will contain a statement calling into question the long-term health care company's ability to continue in business, Vencor said.

Vencor revealed Wednesday that its difficulties go deeper than previously indicated. - - - - it might have to restate its financial reports for last year's second and third quarters. The company also decided not to pay rent due Thursday to Ventas, the company that owns most facilities operated by Vencor.

Perhaps most ominous, Vencor said its independent auditor, Ernst & Young LLP, has told the company that its report on Vencor for 1998 will contain a "going concern" statement calling into question the nursing-home and hospital operator's ability to continue in business.

Vencor reveals deeper financial woes Auditor's report questions firm's ability to continue
The Courier-Journal (Louisville, KY.) April 1, 1999

Ernst and Young's ''going concern'' statement is due to the absence of a permanent agreement between Vencor and its major lenders. The banks, which had cut Vencor off from its revolving line of credit because the company had violated several parts of the agreement, have extended a temporary waiver through May 28. The original waiver expired yesterday.-
-Before the Vencor statement, analyst John Ransom of Raymond James and Associates said, ''I think either a restructuring or a bankruptcy is this company's future for the next 18 months. Their current level of operating cash flow cannot support their current level of interest, rent and capital expenditures.''

11th Circuit Reopens Medigap Dispute Between Vencor and Blue Cross - - CASE: Medigap: Vencor Hospitals v. Blue Cross Blue Shield of RI
Health Law Litigation Reporter April 1999
COMMENT:- Note the way Vencor charges when care is not covered by Medicare or Medicaid.

The Eleventh Circuit has vacated summary judgment in favor of Blue Cross Blue Shield of Rhode Island (BCBS), remanding the case for further consideration of whether Vencor Hospitals is entitled to charge BCBS higher daily rates than allowed under Medicare for policyholders of private Medicare supplemental insurance, commonly known as "Medigap." Vencor Inc. is currently in the middle of a heated battle with insurance companies over Medigap charges, having recently received an adverse ruling by a DC District Court. Vencor Hospitals d.b.a. Vencor Hospital v. Blue Cross Blue Shield of Rhode Island , No. 96-5105 (11th Cir., March 8, 1999).

Medigap insurance is designed to provide coverage for inpatient hospital care after Medicare Part A coverage has been exhausted. Vencor has typically charged private insurers as much as four times more than the per diem rate it receives under Medicare. This suit arises from BCBS's refusal to pay more than the Medicare rate for two of its policyholders - - - -Vencor sued BCBS to recover over $700,000 of charges remaining after BCBS paid an amount representing 90% of the Medicare rate.

BCBS won summary judgment after a district court determined that the policy unambiguously limits payment to 90% of what Medicare would have paid. Vencor appealed the decision, arguing that the term "health care expenses" refers to Medicare-approved treatments and not to the amounts of these expenses.

Shares of Vencor, Ventas Companies' future appears in doubt
The Courier-Journal (Louisville, KY.) April 2, 1999

Rattled investors sent stock for Vencor and Ventas plummeting yesterday as they sold off shares in reaction to reports that the Louisville-based companies' continued existence is in doubt.

Vencor stock fell 28 percent to close at 94 cents a share in trading on the New York Stock Exchange, while Ventas, which was split off from Vencor last year, tumbled 23 percent to $ 4.92.-
- -- - sharp disagreements between the two companies, - - - - - - Vencor also said it would not pay $ 18.46 million in rent that was due yesterday to Ventas, - - - the independent auditors of both companies expressed doubt about their ability to continue in business.- - - analyst Frank Morgan said that ''- - - - clear indications of how dire the financial situation is at the company.'' Analysts have speculated Vencor may be headed for bankruptcy.

Ventas and Vencor Reach Agreement On Certain Matters
Company Press Release Tuesday April 13, 1999

LOUISVILLE, Ky.--(BUSINESS WIRE) Ventas, Inc. (NYSE: VTR - news) announced today that it has entered into an agreement with Vencor, Inc. (NYSE: VC - news), its principal tenant, which provides that if Vencor pays the full amount of April 1999 rent on the following schedule, the Company will not exercise its remedies under its lease agreements with Vencor.

Vencor reaches agreement with landlord to work out finances
The Associated Press State & Local Wire April 14, 1999

Vencor Inc. will have until the end of the month to pay $ 18.5 million in rent that was due April 1 under an agreement with the company that owns the nursing-home and hospital properties where Vencor operates. - - - allow Vencor to pay the money in four installments by the end of the month.-
-Tuesday's rent agreement called for Vencor to pay Ventas installments of $ 8 million Tuesday, $ 4.3 million next Tuesday, $ 4.3 million April 27 and $ 1.9 million April 30. - - - - But Vencor could find itself in the same predicament May 1, when another $ 18 million is due.

Vencor given a rent reprieve Firm gets 3 weeks to fix its finances
The Courier-Journal (Louisville, KY.) April 14, 1999

Vencor Reports 1998 Results
Business Wire April 15, 1999

Vencor Must pay $ 90 million in Medicare overpayment; shows $600 million loss
The Associated Press State & Local Wire April 15, 1999
COMMENT:- There is much more about Vencor's fraudulent charging on another page.

Vencor Inc. said Thursday it has until April 23 to repay about $ 90 million of Medicare overpayments or risk having reimbursements suspended.

The Louisville-based long-term health care company also issued its long-delayed 1998 fourth-quarter financial statement, showing a net loss of $ 605.9 million, or $ 8.68 per share. For the same period in 1997, the company reported net income of $ 27.2 million on revenues of $ 812.3 million.-
-Vencor stock was unchanged in trading Thursday, closing at 81.2 cents per share.

Vencor loses $ 651.5 million in 1998
The Associated Press State & Local Wire April 16, 1999

Vencor Inc. has released its long-delayed 1998 earnings report, showing a loss of $ 651.5 million, much of it due to reducing the value of its hospital and nursing home business to reflect a new Medicare payment system. - - - - The Fortune 500 company said its losses for 1998 were $ 9.53 per share. It recorded $ 506 million in pretax losses in the fourth quarter alone.-
-The banks have given Vencor two extensions, with the latest set to expire May 28. But Vencor's earnings report says if the company pays more than $ 10 million to the financing administration, its credit will be frozen.-
-The report portrays a stark reversal in the fortunes of the company that entrepreneur Bruce Lunsford founded with one hospital in the mid-1980s.

It went from making operating income of $ 224.5 million in 1997 to posting an operating loss of $ 572.9 million last year.

Vencor reports $ 651.5 million loss for 1998 Once-thriving Louisville firm is awash in debt
The Courier-Journal (Louisville, KY.) April 16, 1999

Vencor stock continues slide; investors predict bankruptcy
The Associated Press State & Local Wire April 18, 1999

The Louisville long-term-care company's stock lost 15 percent Friday to close at 69 cents on the New York Stock Exchange. And Ventas, which owns the hospitals and nursing homes that Vencor operates, closed down 13 percent at $ 3.62. - - - - " Vencor, I think, bankrupts shortly - within the next 45 days," said consultant Peter Young of Strategic Healthcare Initiatives.

Vencor Says 4Q Losses Huge, Medicare Repayment Due
Medical Industry Today April 19, 1999

Bank Letter April 19, 1999

Original lender Deutsche Bank sold a $ 7 million holding in Ventas Realty last week at 83 prior to the release of the company's earnings, due last Friday after Bank Letter went to press.-
-The trader added, "Ventas could survive . . . if they're still able to service their debt." He noted that Ventas would always be able to find a tenant to rent its hospitals.

Vencor Announces Appointment of Owen E. Dorsey as Chief Administrative Officer
Business Wire April 20, 1999
COMMENT:- The qualities required of someone to change the culture of Vencor , presumably from one which throws out sick elderly when they can't pay as well as others to an acceptable and humane institution are interesting - or is that not the reason Dorsey was appointed? Could it be a record for creating a culture producing a " strategic, high-growth environment"

Mr. Dorsey will assume overall responsibility for human resources, corporate and public communications, government relations and all administrative support functions for the Company. - - - - Mr. Dorsey has broad, multi-site experience in stable, growing and turnaround environments and has held senior executive positions with Saks Holding, Inc., the parent company of Saks Fifth Avenue, the Ritz-Carlton Hotel Company and Holiday Inns Worldwide. Mr. Dorsey has demonstrated success in leading organizations through cultural transformations. While at Saks, Mr. Dorsey served on the Executive Management Committee during the company's highly successful initial public offering.

Throughout his tenure at Ritz-Carlton, Mr. Dorsey played a key role in developing a strategic, high-growth environment and established a benchmark for consistent product delivery. In 1992, that benchmark earned Ritz-Carlton the prestigious Malcolm Baldridge National Quality Award. Most recently, Mr. Dorsey served as an external consultant, and later as Senior Vice President, of Service Merchandise, Inc., where he reported directly to the CEO and was a member of the Executive Management Team.

Edward L. Kuntz -- said - -" - make him uniquely qualified to step into this role and get the job done."

Vencor, Ventas CEO received more than $1 million in salary
The Associated Press State & Local Wire April 21, 1999
COMMENT:- One of the major gripes about all of these market corporations is that while downsizing, deskilling and underpaying their staff they reward the executives who do this massively. The nurses are particularly angry. Motivation and commitment by staff is seriously compromised. The problems in care are compounded.

The former chairman and CEO of long-term care company Vencor Inc. and its spinoff company, Ventas Inc., received more than $ 1 million in salary and bonuses in 1998, a year that ended with both companies in financial trouble.

Bruce Lunsford was paid $ 825,000 in severance when he was ousted along with several other executives at the end of the year, according to proxy statements distributed to shareholders before upcoming annual meetings.

And as the company's stock plunged from a high of $ 12 in May to $ 5.50 by late November, Lunsford and other executives were given a break on how much they would have to pay to exercise millions of dollars worth of stock options to reflect the lowered stock value.

Vencor, Ventas paid Lunsford $ 1.05 million in '98
The Courier-Journal (Louisville, KY.) April 21, 1999

Vencor and Medicare Agree to Extended Payment Terms for Reimbursement Overpayments
Business Wire April 21, 1999

April 21, 1999-- Vencor, Inc. (NYSE:VC) today announced that it has reached an agreement with the Health Care Financing Administration ("HCFA") to extend the repayment of approximately $ 90 million of Medicare reimbursement overpayments. The Company will now be obligated to repay the overpayment over 60 monthly installments.

Vencor gets time to repay Medicare; Firm has 5 years to pay $ 90 million in overpayments
The Courier-Journal (Louisville, KY.) April 22, 1999

Federal regulators said yesterday they will allow financially troubled Vencor Inc. to repay $ 90 million in Medicare overpayments over the next five years. - - - - That relieves one of the pressures threatening to plunge the Louisville health-care company into bankruptcy but raises questions about another potential problem. Vencor has been told by its banks that its revolving line of credit will be cut off if it makes more than $ 10 million in Medicare repayments. Vencor is in default on a $ 1 billion credit arrangement and wants the banks to restructure its debt.

Lawmakers consider nursing home reform; Industry losses, resident spur action
The Dallas Morning News April 26, 1999

Financial losses at the nation's largest nursing home chains have increased the urgency of proposed state legislation that would protect residents in the event that a home fails, supporters say.

Just this month, at least two major chains have reported losing hundreds of millions of dollars on their operations. Sun Healthcare Group Inc. of Albuquerque, N.M., said it lost $ 761.7 million in the fourth quarter of 1998. Vencor Inc. of Louisville, Ky., pegged its losses at $ 605.9 million in the same period.

Vencor misses interest payment on longterm note
The Associated Press State & Local Wire May 3, 1999

Vencor Inc., facing a series of deadlines that could determine its future, missed one Monday when the long-term healthcare company didn't make interest payments on financial notes. - - - decided not to make an approximately $ 14.8 million interest payment due Monday on $ 300 million of notes.

A short-term agreement expires Wednesday with Ventas Inc.,- - -

Vencor Misses Debt Payment, Raising Question of Its Survival
The New York Times May 4, 1999
COMMENT:- Note that the companies in trouble were those which took advantage of Medicare's item of service in order to milk the system. The Medicare changes turned off the gravy train and most of these companies were subsequently prosecuted for fraud.

Analysts said the crux of the problems at Vencor, - - - was the refusal of a co-founder, W. Bruce Lunsford, to reduce the rents the company pays. Mr. Lunsford, who resigned as Vencor's chief executive in January, still holds that post at Ventas, which holds the leases on most Vencor facilities.-
-Changes in Medicare payments virtually crippled the formerly lucrative business of providing contract therapists and other specialized workers to many small nursing homes. Under the new system, which took effect last summer, Medicare typically pays a flat amount for each nursing home patient instead of paying an added fee for each service the patient receives.

Vencor and Ventas Extend Standstill Agreement
BusinessWire Thursday May 6 8:11am

LOUISVILLE, Ky.-- -Vencor, Inc. (NYSE: VC) today announced that it has entered into an agreement with Ventas, Inc. (NYSE: VTR) to extend the current standstill agreement until 5:00 p.m. on May 7, 1999.

Ventas extends deadline for Vencor payment by a day
The Associated Press State & Local Wire May 6, 1999

Vencor's rent deadline extended Negotiations with creditors are ongoing
The Courier-Journal (Louisville, KY.) May 7, 1999

Vencor mum on whether it paid rent on time Answer may shape long-term-care company's future
The Courier-Journal (Louisville, KY.) May 8, 1999

There was a profound silence from Vencor Inc. yesterday as the 5 p.m. deadline for the company to make an already late $ 18.5 million rent payment came and went.

Vencor and Ventas Extend Standstill and Tolling Agreements
Company Press Release Monday May 10, 9:14 am Eastern Time

LOUISVILLE, Ky.--(BUSINESS WIRE) --Vencor, Inc. (NYSE: VC - news) today announced that it did not pay the approximately $19 million in rent to Ventas, Inc. (NYSE: VTR - news) - - - -Although Ventas served Vencor with notices of non-payment under the Master Leases, the parties have since entered into further amendments of their prior Standstill and Tolling Agreements extending the time - - - - until June 6, 1999

Ventas says Vencor misses May rent payment
(Reuters) Monday May 10, 1999

Vencor Fails to Pay May Rent; Parties Continue Discussions
Business Wire May 10, 1999

A wise plan for nursing homes;
The Tampa Tribune May 10, 1999

The Louisville, Ky., company came under intense scrutiny last year after Tribune reporter Lindsay Peterson began writing about its attempts to evict 54 Medicaid residents from one of its Tampa homes. The company runs about 20 other homes statewide and several acute-care hospitals. - - - state regulators are preparing a plan to ensure that care in nursing homes is not affected if the companies go out of business.

Sun and Vencor Limp, but Will They Fall? Sources Were Split on Long-term Care Cos' Ability to Come up with the Cash
Mergers and Acquisitions Report May 10, 1999

Whether troubled long-term care companies Sun Healthcare Group, Inc. and Vencor Inc. make their coupon payments before their respective 30-day grace periods run out was the subject of debate among analysts last week.

"I don't think either company will make the payments," said a distressed analyst. Both have tremendous cash flow problems and are too highly leveraged to continue operating without restructuring even if they do make the coupons, he said.

Vencor rent deadline moved again Ventas appears eager to avoid bankruptcy fight
The Courier-Journal (Louisville, KY.) May 11, 1999

Vencor Adjourns Annual Stockholders Meeting
Business Wire May 12, 1999

Struggling Vencor to face shareholders Year of problems hangs over today's annual meeting
The Courier-Journal (Louisville, KY.) May 12, 1999,

When Vencor shareholders approved management's plan to split the company in two at last year's annual meeting, most probably did not guess that they were drawing battle lines with the very survival of the newly separated firms at stake.-
A year later, as Vencor shareholders prepare for this morning's annual meeting at the Seelbach Hilton Hotel, the company is behind on the rent to Ventas, has stopped paying the interest on $ 300 million in company notes and is in violation of the terms of another $ 800 million in credit.

Vencor's dream of opening a gleaming tower headquarters on the riverfront as 2000 rings in has been abandoned, and the land and building plans are being sold.

Company officials have blamed Vencor's precipitous drop in fortune on a Medicare reimbursement system that took effect in July. When the company reported last month that it lost $ 651 million in 1998, it said that was largely because its earning power was sharply reduced by the Medicare changes.

But at the annual meeting on April 27 last year, Lunsford didn't seem to foresee the effects that he would later describe as draconian. In fact, he told shareholders that ''the changes long term in the Medicare system will be beneficial.''

Health Line May 13, 1999

At a stockholders' meeting in Louisville yesterday that one shareholder characterized as gloomy, Vencor Inc. Chair Edward Kuntz said the company will survive the "disastrous last year."

Louisville, Ky.-Based Health-Care Provider Holds Annual Meeting

LOUISVILLE, Ky.-- Vencor Chairman Edward L. Kuntz tried yesterday to reassure stockholders at a packed annual meeting that the company will survive the disastrous last year.

Despite the crowd, not enough shares were represented yesterday to vote on board candidates, and the meeting became a question-and-answer session.

In reply to questions, Kuntz placed much of the blame for the long-term-care company's difficulties on changes in Medicare reimbursement. He also said that dividing the company last year was a mistake.- - - - not all embraced Kuntz's reassurance that the company will stay afloat.-
-While Kuntz emphasized that patients remain the primary focus of the company, many at the meeting were more interested in the condition of their finances.-
-Kuntz, who would make no public comment on the matter, said Vencor is working with Ventas and the lenders to find a way out of nearly $ 1 billion in debt.

Ventas spinoff 'was not the right decision' Vencor meeting lacks quorum; shareholders get few answers
The Courier-Journal May 13, 1999

If Vencor Inc. shareholders were wondering what more could go wrong, they got a quick answer at the company's annual meeting yesterday when they were told no official business could be conducted because there wasn't a quorum present.-
-But that didn't satisfy shareholders like Drew Smith, who complained afterward that "there were a lot of questions asked (but) few answers given." Other shareholders also were disappointed. James Trimpe, who is also a vice president of the investment firm Wheat First Union, noted that Kuntz was asked if there would be any money left for common shareholders after a possible restructuring or bankruptcy filing by Vencor -- "and the answer was no."
"It appeared to me that he was very reluctant to make any statement that would indicate that this company is going to survive," Adams said. "I'm under the impression that without a change in the government payment system this company is gone."

Vencor Announces First Quarter Results
Company Press Release Friday May 14, 7:46 am Eastern Time

Vencor's losses continue during first quarter
The Associated Press State & Local Wire May 14, 1999

Vencor's losses continue during first quarter
The Associated Press State & Local Wire May 14, 1999

Debt-ridden Vencor Inc.'s losses mounted during the first quarter, but the long-term health care company did see a gain in slumping revenues as it wrangles with problems threatening to sink it.-
-Such improvement offers some glimmer of hope that Vencor can put together a restructuring plan to deal with its crushing debtload, said Charles Lynch, an analyst with Schroder & Co. Inc.

Ventas Reports First Quarter 1999 Results; Ventas Will Not Pay Dividend in May
Business Wire May 14, 1999

Vencor stockholders seek answers from executives
The Associated Press State & Local Wire May 17, 1999

Modern Healthcare May 17, 1999

Two national long-term-care chains skipped interest payments due early this month, prompting increased speculation about their fiscal health.

Moody's Investors Service and Standard & Poor's downgraded credit ratings on Louisville, Ky.-based Vencor and Albuquerque-based Sun Healthcare Group last week to reflect a heightened likelihood of default, analysts from those companies said.-
-Vencor's troubles may have their roots in an aggressive acquisition strategy, which it supported through massive borrowing. Among its 1997 acquisitions were the $616 million purchase of Transitional Hospitals Corp., a Las Vegas-based chain of about 20 long-term, acute-care hospitals, and the $359 million purchase of TheraTx, an Atlanta-based contract therapy services provider.-
-Reacting to information that ''one, possibly two, large nursing home chains may be facing bankruptcy in the near future,'' Sen. Chuck Grassley (R-Iowa) two weeks ago introduced a bill he said would help smooth the transition for patients if their nursing homes declare bankruptcy.

CEO: Ventas will meet Vencor 'more than halfway'
The Associated Press State & Local Wire May 18, 1999

Ventas Inc.'s president and chief executive officer told stockholders Tuesday the company will make concessions to keep its principal tenant, financially beleaguered Vencor Inc., afloat.

With Louisville-based Vencor Inc. as Ventas' main source of revenue, Debra A. Cafaro said it was in the best interests of stockholders to keep Vencor operating.-
-Ventas' properties include 45 hospitals, 219 nursing centers and eight personal care facilities operated in 36 states. Tuesday's annual meeting was its first as a separate company.

Quotes from Shareholders:- "We're grasping at straws," he said. - - -- also weren't encouraged - - - blamed Vencor founder and former CEO Bruce Lunsford - - - "The sad part is we bought this for our grandchildren's educational fund,"

Ventas Shareholders Elect Directors
Business Wire May 18, 1999

May 18, 1999--At the annual meeting today of Ventas, Inc. (NYSE: VTR), shareholders reelected the following six directors to serve one-year terms: Walter F. Beran, Debra A. Cafaro, Douglas Crocker II, Ronald G. Geary, W. Bruce Lunsford and R. Gene Smith.

Vencor gets quorum on second try Annual meeting sheds little light on future path
The Courier-Journal (Louisville, KY.) May 18, 1999

On a second try yesterday, Vencor Inc. succeeded in holding its annual meeting, but it had no better luck at appeasing disgruntled stockholders. There were some ''very unsatisfactory answers,'' stockholder Richard Oexmann said after the meeting.

Health Line May 18, 1999

Vencor Inc. CEO Edward Kuntz told shareholders at a meeting yesterday that in light of the company's financial difficulties, he is considering re-merging with Ventas,

Ventas pledges help for Vencor; Reunification won't happen, CEO asserts
The Courier-Journal (Louisville, KY.) May 19, 1999

Shareholders of Ventas Inc. were told yesterday that their company, which owns most of the nursing homes and hospitals operated by Vencor Inc., is working to help its struggling tenant, but has no intention of reuniting with Vencor as one company.

WASHINGTON AT WORK; Insider Bemoans What He Wished For
The New York Times May 20, 1999
COMMENT:- When large corporate groups have a problem they use their wealth to influence the political process - even when they are bankrupt

As Republican national chairman, Haley Barbour designed his party's campaign to cut the growth of Medicare. Now he has taken on a new assignment. As a lobbyist for a dozen large nursing home companies, he pleads with Congress for relief from the law he helped write.-
-Mr. Barbour has not yet filed the required forms with Congress to disclose the amount spent lobbying for nursing homes on Capitol Hill. Asked how much he was being paid, he said, "Not enough," and laughed.

The nursing home industry has long been a potent force in Washington and many state capitals. - - - -The industry's political action committee made campaign contributions of more than $900,000 in 1997-98, according to data filed with the Federal Election Commission and tabulated by Public Disclosure Inc., a nonpartisan research group.

Health Line May 20, 1999

But last month, he (Barbour ) was retained by several nursing home companies -- including Sun Healthcare Group, Vencor Inc., the Mariner Post-Acute Network, Beverly Enterprises, HCR Manor Care Genesis Health Ventures and Extendicare Inc. - to push for greater reimbursements from the federal government.

Loan Market Week June 7, 1999

Administrative agent and co-arranger Bank of America has resigned from the steering committee for Vencor Inc.'s troubled $ 850 million credit and is looking for another bank to take over as administrative agent. Members of the bank group were shocked by "the massive vote of no confidence."

Vencor reaches agreement to make May rent payments to Ventas
The Associated Press State & Local Wire June 8, 1999

Debt-ridden Vencor Inc. served notice to shareholders that their stock will likely have little value if the company is able to restructure its debt and rent obligation.

Trading in the nursing home company's stock was suspended Monday on the New York Stock Exchange amid indications that an announcement is imminent on a possible restructuring of its $ 1 billion in debt. - - - - stock closed Friday at 63 cents per share.-
-"It's fair to say that, while the mechanics of a reorganization are not known, the creditors will effectively control Vencor as part of making concessions on debt and lease obligations," said Frank G. Morgan of J.C. Bradford in Nashville, Tenn.

In another development Monday, Vencor Inc. agreed to make nearly $ 19 million in rent payments due from May to its landlord, Ventas Inc.

Vencor restructuring seems near If company issues stock to creditors, price will plunge
The Courier-Journal (Louisville, KY.) June 8, 1999

Kentucky-Based Long-Term-Care Provider Negotiates Restructuring Pact

Troubled long-term-care provider Vencor is negotiating a restructuring agreement that will turn ownership of much of the Louisville-based company over to its creditors and leave stockholders out in the cold.

"Any such agreement is likely to result in existing Vencor stock having little if any value," said Edward L. Kuntz, the chairman and CEO, in a news release yesterday. - - - "The needs of the Vencor shareholders are certainly not on the table," Peters said. "There are a lot of people losing a lot of money way ahead of the shareholders."

Those people include the banks, the bondholders and, most of all, Ventas Inc., the real estate company spun off from Vencor last year to become its landlord.

Health Line June 9, 1999

Strapped Vencor switches to over-the-counter trading
The Courier-Journal (Louisville, KY.) June 11, 1999

Vencor Inc. stock, which no longer trades on the New York Stock Exchange, is trading over the counter under the symbol VCRI.

The stock opened at 25 cents a share yesterday and closed at the same price,- - - The Louisville-based nursing-home company's stock had long traded on the New York Stock Exchange, but the company's recent financial troubles brought an end to that.

The exchange announced Tuesday that it was dropping Vencor because the company no longer meets certain minimum financial standards

Nursing homes hit hard by cuts in Medicare pay
Business Dateline; Atlanta Business Chronicle July 9, 1999
COMMENT:- The governments Medicare changes in 1997 were designed to eliminate overservicing and fraud. They were probably excessive and underestimated the extent to which most health care providers depended on a proportion of Medicare residents to subsidise the underfunded Medicaid system of payment. As a consequence all groups felt the strain.

Those groups, whose prime goal was profits and who had actively discouraged Medicaid patients built empires and secured massive loans by exploiting Medicare's largesse. They were mortally wounded. Their financial instability is well illustrated by Vencor and Sun healthcare. Those not for profit groups which had copied the conduct of the chains in order to compete probably suffered more than their peers. These groups considered the Medicare cuts to be the cause of the problem - and not their commercial instability, focus on profit, and mismanagement.

To maximise profit the corporate chains had already (by 1994) cut staff and costs to the extent that the care provided was considerably worse than in the not for profit sector (Consumer Reports study 1994). Any further trimming was bound to result in a public backlash.

Last July, Fred Watson foretold the fate of some nursing homes in the state. The president of the Georgia Nursing Home Association predicted that changes in the way Medicare reimburses nursing homes would force some homes to scrape the bottom of the barrel to stay open.-
-Yet, a year later, he is not surprised that one big publicly traded operator of nursing homes based in Atlanta is going bankrupt, and another has drastically cut its staff and is trying to find a new CEO - - - - Feeling the most pain are companies that depend heavily on Medicare, the federal health insurance program for acutely ill elderly, and must show shareholder value, Watson said.-
- - - Publicly traded, longterm-care providers in Georgia oversee about 150 facilities, or 40 percent of the state's nursing homes. About 56 hospitalbased nursing homes also were affected by the Medicare cutbacks, he said. - - - So, although the percentage of Medicare patients is small, nursing homes depend heavily on them for revenue, he said.

Loan Market Week July 12, 1999

A two-point drop in Sun Healthcare bank debt surprised traders last week when GE Capital flipped a $ 25-30 million piece of the paper at 40-43 on July 2.- - - part of a $ 50 million health care bundle, which included Vencor Inc. and Ventas Realty bank debt.

Vencor prepared to auction its downtown sites
Business Dateline; Business First-Louisville July 19, 1999

Ventas Will Not Pay Dividend in Third Quarter
Business Wire, July 21, 1999

Vencor scraps plans, selling Westwood property
Business Courier Serving Cincinnati - Northern Kentucky July 23, 1999

Vencor Inc., the troubled Louisville health care company, is selling the Westwood property it planned to convert to a long-term-care hospital.

Troubled Vencor pursues upgrades at local hospital
Washington Business Journal July 23, 1999

Despite dire straits at the corporate level, Northern Virginia Community Hospital (NVCH) has forged ahead with renovations and new programs.

Modern Healthcare July 26, 1999

Before the PPS, companies such as Mariner, Sun and Vencor borrowed heavily to pay for acquisitions and other expansions. They also had historically high per-day Medicare revenues because they actively sought patients who were more difficult to treat and who could generate higher reimbursement, and they contracted to provide plenty of therapy to outside nursing homes. As long as Medicare revenues stayed high and contract therapy remained profitable, those companies could make good on their steep loan repayments.

Nursing home chains warn of possibility of bankruptcy Sun Healthcare, Vencor say residents would face no danger
The Dallas Morning News July 29, 1999, Thursday

Site for Vencor tower will go on auction block
The Associated Press State & Local Wire July 30, 1999, Friday,

Vencor Announces Extension of Bank Waiver
Business Wire August 2, 1999, Monday

Aug. 2, 1999-- Vencor, Inc. today announced that its senior bank lenders have granted a further waiver, through August 27, 1999, of breaches by Vencor of certain financial covenants under its bank credit agreement ("Credit Agreement").

Loan Market Week August 2, 1999

Deutsche Bank last week picked up a $ 30 million chunk of Ventas Realty at 87 in an auction as the company's lengthy negotiations with Vencor Inc. sapped enthusiasm for the credit.

Vencor Announces Further Interim Agreements With Ventas
Business Wire August 5, 1999, Thursday

Vencor, Ventas agree on payments
The Courier-Journal (Louisville, KY.) August 6, 1999, Friday

Vencor reports operating losses for most recent quarter
The Associated Press State & Local Wire August 13, 1999, Friday, AM cycle

Revenues fell and debt grew at Vencor Inc. during the first half of 1999, a downward spiral that continued with a $ 15.2 million second-quarter operating loss reported Friday.

The quarterly loss, amounting to 22 cents per share, was up sharply from a $ 4.7 million loss reported during the same quarter a year ago by the long-term health care company.

Vencor records loss of $ 40.8 million Medicare cuts, reorganization, write-offs cited
The Courier-Journal (Louisville, KY.) August 14, 1999, Saturday

The losses continued to mount for financially crippled nursing-home giant Vencor Inc. in this year's second quarter. The company announced yesterday that it lost $ 40.8 million, or 58 cents a share, for the three-month period that ended June 30.

Ventas reports says Chapter 11 expected from Vencor
The Associated Press State & Local Wire August 17, 1999, Tuesday,

The company that owns most of Vencor Inc.'s nursing homes and hospitals says it expects the beleaguered company to file Chapter 11 bankruptcy.

Ventas: Chapter 11 is likely for Vencor Without creditor deal, a bankruptcy could hurt Ventas
The Courier-Journal (Louisville, KY.) August 17, 1999, Tuesday

Ventas building up cash reserves
Business First-Louisville August 20, 1999
Rachael Kamuf; Eric Benmour

Ventas Inc. has built up cash reserves to continue meeting its own operating obligations should its major tenant, Vencor Inc., temporarily cease making rental payments in an expected bankruptcy proceeding.

Vencor Announces Extension of Bank Waiver
Business Wire August 27, 1999, Friday

Vencor, Inc. today announced that its senior bank lenders have granted a further waiver, through September 24, 1999

Vencor Announces Further Interim Agreements With Ventas
Business Wire September 7, 1999, Tuesday

VENCOR, INC. FILES FOR CHAPTER 11 PROTECTION; $100 MILLION - - - Debtor in Possession Financing Secured; Normal Operations to Continue in All Facilities
(BUSINESS WIRE)--Sept. 13, 1999

LOUISVILLE, Vencor, Inc. today announced that it and several of its subsidiaries filed a petition for protection under Chapter 11 of the U.S. Bankruptcy Code with the U.S. Bankruptcy Court in Delaware.

In announcing today's Chapter 11 filing, company management emphasized that the filing has been organized to permit normal operations of its nursing centers, hospitals, and ancillary services business.

Nursing Home Co. Vencor Files Ch.11
AP Online September 13, 1999; Monday

Vencor Inc., struggling under a mountain of debt and bad publicity, filed for bankruptcy Monday, the latest in a string of bad news for one of the nation's largest nursing chains.

Vencor, Inc. Files for Chapter 11 Protection; $ 100 Million Debtor in Possession Financing Secured; Normal Operations to Continue in All Facilities
Business Wire September 13, 1999, Monday

Ventas Announcement On Vencor Bankruptcy Filing
Business Wire September 13, 1999, Monday

There can be no assurance as to what effect the Vencor bankruptcy will have on Ventas. We expect Vencor's major creditors to support an expedited restructuring process.

Ventas, Inc. Announces Agreements in Principle Among Major Creditors to Restructure Vencor, Inc.; Contemplated Deal Designed To Improve Tenant's Credit Profile
Business Wire September 14, 1999, Tuesday

Vencor plans no shutdowns; Ailing company to keep its nursing homes open
The Boston Globe September 15, 1999, Wednesday

Vencor Inc., one of the biggest operators of nursing homes in the country with 38 facilities in Massachusetts, has told state officials it plans to keep its homes open despite the fact that the Louisville, Ky., company filed for bankruptcy court protection on Monday.

Vencor Receives Approval of First-day Orders in Connection With Restructuring Under Chapter 11; Vencor and Ventas Reach Agreement Regarding Rent Payments During Restructuring
Business Wire September 15, 1999,

Vencor, Inc. (the "Company") today announced that the United States Bankruptcy Court for the District of Delaware (the "Court") entered first day orders granting authority to the Company and its subsidiaries to pay pre-petition and post-petition employee wages, salaries, benefits and other employee obligations. The Court also approved orders granting authority, among other things, to pay pre-petition claims of certain critical vendors, utilities and patient obligations.

Vencor may pay Plan could give creditors control, - - debts with stock wipe out investors
The Courier-Journal (Louisville, KY.) September 15, 1999,

Creditors of Vencor Inc. reportedly are discussing a plan in which they would forgive much of the financially troubled health-care company's $ 1.4 billion debt in exchange for all of the company's stock.

In return for forgiving debts, banks would own 56 percent of a restructured Vencor, and holders of company notes and Vencor's landlord would own the rest, if parties agreed and a bankruptcy judge approved.-
-'' Vencor shareholders are going to end up with no equity if you add up (what the creditors are getting),'' said John Roberts, analyst at Hilliard- Lyons in Louisville. ''It comes to 100 percent, so that would leave zero for current Vencor shareholders.''

In a bankruptcy, shareholders have very few rights, Roberts said.

Experts Question Need To Restore Cuts In Medicare
National Journal's CongressDaily September 15, 1999 Time

Members of the House Commerce Health and Environment Subcommittee today made it clear that Congress needs to move quickly on legislation to restore some of the Medicare cuts imposed as part of the 1997 Balanced Budget Act, but they faced resistance from expert witnesses-
-Policy analysts tried their best to caution Congress against major changes - noting that - - - -, it may be due as much to decreased fraud and abuse and other factors as to Medicare reductions.

Failed Nursing Home Giant Seen as Health-Care Herald; Vencor Bankruptcy May Set Precedents
The American Banker September 17, 1999, Friday

Lenders to the battered long-term health-care industry will be watching Vencor Inc. closely over the next few months as the Louisville, Ky.-based nursing home operator tries to sort out its debt woes.

Nursing-Home Bailout Debated -- Congressmen Question Proposal To Increase Medicare Payments
Albuquerque Journal September 18, 1999, Saturday
COMMENT:- This article debates the issue of whether Medicare changes or fraud and mismanagement precipitated the problems. The different positions of the various advocates is given in the full article. Note that the not for profits consider the new Medicare payments to be adequate.

WASHINGTON -- Some key members of Congress and an association that represents nonprofit nursing homes are concerned about a bill to help bail out the financially troubled nursing-home industry.

The legislation sponsored by Sen. Orrin Hatch, R-Utah, and backed by New Mexico Sens. Pete Domenici and Jeff Bingaman would cost an estimated $5 billion over five years.

Nursing homes with large numbers of residents who need rehabilitation therapy would benefit the most from the bill, and the large, for-profit chains have focused on attracting such residents in recent years.-
-"Despite industry charges to the contrary, payment rates are likely to provide sufficient, or even generous, compensation for providers," an official with Congress' General Accounting Office told a House committee Wednesday.

The GAO official said some Medicare fixed rates may need to be increased but others may need to be lowered to better reflect care costs.

The nursing-home industry is pushing hard for congressional relief.

The industry has reported hundreds of millions of dollars in losses and has laid off tens of thousands of workers in recent months. One national chain, Vencor of Louisville, Ky., has filed for bankruptcy reorganization and another, Sun Healthcare Group of Albuquerque, has said it is considering such a move.

The industry blames reduced Medicare reimbursements for its troubles.-
-But some government data and studies show Medicare's current rates for beneficiaries in need of rehabilitation therapy are adequate and possibly even too high.-
-The American Association of Homes and Services for the Aging, which represents nonprofit nursing homes, wants the Hatch bill changed to put more of a focus on nontherapy rates.

Northup attacks Medicare curbs Letter to Clinton cites a 'crisis' for care, providers
The Courier-Journal (Louisville, KY.) September 24, 1999, Friday

Changes in the way the federal government reimburses health-care providers has led to ''an impending crisis'' in nursing-home care, and ''major companies are facing financial disaster,'' U.S. Rep. Anne Northup and 180 Congressional colleagues charge in a letter to the Clinton administration.

The letter comes one week after Vencor, a Louisville-based long-term care company, filed for Chapter 11 bankruptcy. The company cites the government's reimbursement changes as a major reason for its difficulty.


Modern Healthcare September 27, 1999

Vencor pinned much of the blame for its bankruptcy filing earlier this month (Sept. 20, p. 6) on Medicare's prospective payment system for skilled-nursing facilities. But it wasn't too long ago that the Louisville, Ky.-based nursing home chain was bullish on the PPS.

In an April 1998 - - - Vencor told shareholders that the system ''will benefit nursing center operations'' through higher payments and the company's ability to reduce costs on its ancillary services. In August 1998, after several weeks of operating under the PPS, the company was still standing by its prediction of profitability, qualifying it only with ''in the long term.'' By November, the company had replaced ''will benefit'' with ''may benefit.''

The Times-Picayune September 29, 1999 Wednesday
COMMENT:- This response to the problem created by Vencor and Sun is interesting. There is no mention of the crimes committed by these corporations - all long before the 1997 changes. The government recognises it can't manage and control a corporatised health system. Instead of changing the system they want to butt out and give the market open slather. This is exactly what Andrew Turner wanted them to do in 1996.

Writing about the marketplace ideology Kuttner indicated that, for true believers, when the market does not work this can only be because it is not marketlike enough. When you can't stop the fox from stealing the chickens you give the chickens to the fox.

With angry senior citizens and health-care workers storming Capitol Hill to complain about Medicare payments, lawmakers are tripping over themselves to restore cuts that they set in motion two years ago.

Although trumpeted in 1997 as a long-overdue attack on waste in a bloated federal program, many in Congress now criticize the severity of the cuts as a misguided, penny-pinching move that is putting sick, low-income elderly people at risk.

That sea change in attitude has prompted dozens of bills designed to restore financing to nursing homes, hospitals, home health-care agencies and other caregivers in a wave of congressional backpedaling that could top $20 billion.-
-"This is a classic example of trying to micromanage a huge program in every minute detail," Sen. John Breaux, D-La., said. "Cuts are made and you come back the next year and try to correct them, and then the next year you cut again and correct them the year after that. That's what happens when Congress micromanages down to the price of an aspirin or visit to the hospital. It doesn't make sense in the modern world."

Breaux has called for radical changes in the $230 billion-a-year health program that would let marketplace competition set prices, with the government only subsidizing the premium

Ailing from government cuts, nursing homes a risky buy
USA TODAY September 30, 1999, Thursday,

Despite bargain prices, buying nursing home stocks right now is akin to extreme sports: Only serious risk takers should consider it, analysts say.

"We're not recommending any shares right now," says John Ransom, an industry analyst with Raymond James.

Vencor Receives Final Court Approval of Its $ 100 Million Debtor-in-Posssesion Financing
Business Wire October 1, 1999, Friday

Vencor shareholders may be offered stock warrants
The Associated Press State & Local Wire October 2, 1999, Saturday,

A deal Vencor Inc. is working out with creditors may benefit shareholders as well.

Shareholders may be offered warrants - a chance to "buy stock at the same price they offer it to creditors" if and when new stock is issued, Vencor lawyer Thomas Moloney said.

Ventas may rise above Vencor's troubles
The Courier-Journal (Louisville, KY.) October 3, 1999, Sunday

While Louisville-based Vencor tries to pull itself out of bankruptcy, several analysts are somewhat optimistic toward Ventas, its landlord.

Vencor goes about business; Bankruptcy filing won't impact local operations, company says
Indianapolis Business Journal October 4, 1999

Vencor proposes retention bonuses
The Courier-Journal (Louisville, KY.) October 16, 1999, Saturday
COMMENT:- Under this system the people who have indulged in fraud and caused the problems are given massive bonuses.

Some key Vencor employees could receive bonuses intended to keep them with the company under a motion filed in bankruptcy court in Delaware last week.

The so-called retention bonuses, which could total more than $ 7 million, would be in addition to salary and other regular compensation.

The retention bonuses would range from 50 percent to 125 percent of annual salaries, with additional amounts tied to performance.

The bonuses are aimed at retaining workers deemed to be critical to Vencor's bankruptcy reorganization process.-
-Vencor has asked the court to keep the names of the executives and workers who would receive the bonuses secret because it believes publishing the information would hurt the reorganization effort and ''the privacy rights of the relevant employees.''-
-In addition to the retention bonuses, the company has proposed in its reorganization plan paying $ 3.7 million in performance bonuses to certain employees based on undisclosed criteria.

The performance bonuses would be paid on the effective date of the reorganization plan.

Vencor can keep bonus list secret Bankruptcy judge delays decision on whether to allow actual payouts
The Courier-Journal (Louisville, KY.) October 22, 1999, Friday MET:METRO

Vencor Inc. can keep secret the names of employees it wants to pay retention bonuses totaling as much as $ 7.3 million, a federal bankruptcy judge in Wilmington ruled yesterday.

Vencor to outline its plans soon Company says it expects to pay its trade vendors
The Courier-Journal (Louisville, KY.) October 23, 1999, Saturday

Vencor Inc. plans to file its proposal for life after bankruptcy sometime next month. That's the word the company's lead bankruptcy lawyer gave to anxious creditors at a meeting convened by U.S. trustee adviser Maria Giannirakis yesterday.

Ventas announces debt-restructuring plan
The Associated Press State & Local Wire November 1, 1999, Monday,

Ventas Inc., landlord of a large nursing home operator forced into bankruptcy court, has solidified its own financial situation by reaching agreement with lenders to restructure nearly $1 billion in debt.

Ventas Reaches Agreement With Its Lenders On Long-term Debt Restructuring
Business Wire November 1, 1999, Monday

Ventas restructures $ 1 billion debt Company avoids default on loan of $ 275 million
The Courier-Journal (Louisville, KY.) November 2, 1999, Tuesday

Healthcare REIT Restructures $1B Of Bank Debt
Bank Loan Report November 08, 1999

Real estate investment trust Ventas Inc., which owns hospitals and nursing homes across the country, announced on Nov. 1 that 95% of its lenders have agreed to restructure it's $975 million of outstanding bank debt, including a $275 million bridge loan.

Vencor's retention-bonus plan OK'd
The Courier-Journal (Louisville, KY.) November 9, 1999, Tuesday

A bankruptcy judge in Delaware has given final approval to a plan to pay selected Vencor employees retention bonuses totaling up to $ 7.3 million.

Long-term health care company reports third-quarter losses
The Associated Press State & Local Wire November 12, 1999, Friday,

Bankrupt Vencor Inc. reported diminished revenue and increased losses from operations for the third quarter of 1999.

Vencor Announces Third Quarter Results
Business Wire November 12, 1999, Friday

Ventas Reports Third Quarter 1999 Results
Business Wire November 15, 1999, Monday

Medicaid, Medicare In for Raise Congress, Clinton Agree on Increase
Albuquerque Journal November 19, 1999, Friday

Entrepreneur reached too far, too fast -- Local hero's star faded along with Vencor's
The Courier-Journal (Louisville, KY.) November 21, 1999, Sunday
COMMENT:- Lunsford, the chairman of a company which did the most appalling things and defrauded Medicare of hundreds of millions gets a sympathetic write up. He is still wealthy and will be back in business. No one talks about prison.

And Lunsford, 52, the brash, super-confident, always-in-thenews former CEO who liked to quote Dizzy Dean - ''If you've done it, it ain't braggin' '' - has since dropped out of the limelight, been vilified by some disgruntled investors and seen his Vencor holdings decline in value from more than $ 70 million to just pennies a share.-
-But while government cost-cutting figures in most explanations of Vencor's downfall, some critics say Lunsford's very strength - his supreme self- confidence - also contributed to the slide as he continued to grow the company in the jaws of change.

''Bruce is a classic entrepreneur, a gambler at heart'' who ''thought he was getting so big he couldn't lose,'' said Ransom, the analyst. ''They made some leveraged bets that turned out to be bad bets.''-
-Lunsford also is a defendant in a growing number of lawsuits filed by angry shareholders who accuse him and other Vencor officers of selling off millions of dollars of stock in the months before going public with the bad news about how the dramatic federal cuts in Medicare reimbursement would hurt the company.

United States General Accounting Office GAO Report to the Chairman and Ranking Minority Member Committee on Finance, U.S. Senate and the Chairman, Special Committee on Aging, U.S. Senate December 1999
COMMENT:- There was an outcry by corporations and the politicians they supported claiming that corporate financial and quality of care problems were due to the changed Medicare funding rather than overservicing, fraud and mismanagement. The GAO an independent government body carried out an investigation.

The problems in care were of course present long before the new system of funding. They occurred when corporations were enormously wealthy and so very credible.

Since the mid-1980s, Medicare spending for skilled nursing facility (SNF) services has risen dramatically. Between 1986 and 1998, spending increased, on average, 30 percent annually, climbing from $578 million to $13.6 billion.

Results in Brief

Medicare beneficiaries' ability to obtain needed care does not appear to have decreased since the implementation of the SNF PPS, although some patients may stay longer in the hospital before being admitted to a nursing home or may receive care from other post-acute-care providers. The PPS does appear, however, to have affected the willingness or ability of some nursing homes to accept certain types of Medicare patients. Hospital discharge planners reported that facilities are reluctant to admit patients requiring certain high-cost services, including some expensive drug treatments and infusion therapy, indicating that the payments for some types of SNF patients may be too low.

Although the new payment system results in major changes in financial incentives, it is likely that aggregate SNF payments to providers are adequate, given that inflated costs were used to establish the per diem payment rates.

READERS' FORUM Vencor lab closing
The Courier-Journal (Louisville, KY.) December 2, 1999, Thursday

The corporate airheads of Vencor have come up with yet another plan to save the company. (Translation: save my bonus!) The reference laboratory that operates here in Louisville for Vencor hospitals all over the country will be closed by Jan. 1.

Vencor Expects Fourth Quarter Charge
Business Wire December 3, 1999, Friday

Vencor, Inc. (the "Company") (OTC/BB: VCRI) today announced that fourth quarter operating results are expected to be impacted negatively by a charge related to reserves for uncollectible accounts receivable.

Uncle Sam can help ease sting of losses What can you do when your heavenly stock becomes a fallen angel and is reduced to mere pennies?
The Courier-Journal (Louisville, KY.) December 12, 1999, Sunday

Unless you can use your shares as wallpaper or as an innovative screen saver, you can accept your fate and take the consolation prize - a tax loss.

This year's local candidates for year-end tax selling include Vencor, the once-prosperous Louisville health-care company that filed for bankruptcy in September, - - -In general, worthless stock can be written off as a capital loss, - - - - With Vencor, ''if you can use the tax deduction, sell it,'' said Allen Corbin, first vice president, investments, in the Louisville office of Prudential Securities. ''If there's no tax benefit, you might as well hold to see what happens when it restructures.''

Nursing Home Operators Could Get Booster Shot
Bank Loan Report December 13, 1999

For the ailing long-term health care sector, relief may be on the way - sort of.

A recently approved adjustment to the Medicare interim payment system will give nursing home operators approximately $400 million in additional reimbursements for a limited time.

Change and Crisis in Nursing Homes
The New York Times December 13, 1999, Monday,

As the American population ages, more and more of its oldest and frailest members spend their last years in nursing homes. In Florida, a laboratory of old age, it is estimated that one-fifth of the deaths in the state each year occur in nursing homes. But the American nursing home industry today is itself in uncertain health, and some of its biggest operators may be in terminal financial shape.

Homes for the aged in the 19th century were often founded by churches and towns as small, not-for-profit institutions. The trend in the last decades, however, has been toward ownership by large, publicly traded, for-profit chains.

Wary of how the profit motive can compete with the cost of giving good care, New York State blocks publicly traded companies from operating nursing homes in the state. But Wall Street helps finance them in other states, and two of the biggest of those national chains, Vencor and Sun Healthcare, have filed for Chapter 11 protection in the last three months. Two others, Mariner and Integrated Health Services, are trading at pennies a share.

Portrait of an industry in turmoil ; Survey paints picture of doom and gloom for many post-acute-care companies
Modern Healthcare December 20, 1999, Monday
COMMENT:- This long article traces out what has been happening and that it was a slow and steady process. Note that in general not for profits did not go chasing the easy money and all the profit from Medicare . Instead they were community and care oriented supplying care where it was needed rather than when it made a profit.

Nineteen ninety-nine in retrospect proved to be one of the most devastating years for the entire post-acute-care industry," says Andrew Gitkin, a New York-based healthcare analyst for PaineWebber.-
-This year an unprecedented number of large nursing home chains have sought protection in bankruptcy court. - - - - Some 2,500 home health agencies, many of them hospital-based, have closed their doors since the interim payment system began. But the changes of 1999, however dramatic, didn't come suddenly.-
-For the 10 private for-profit skilled-nursing companies responding with complete financial information, average per company profit fell 66% to $1.8 million from $5.3 million. Not-for-profits, by contrast, made gains, with an average 10% growth in net income, to $8 million from $7.3 million.-
-But many not-for-profits, including American Baptist, traditionally take patients with fewer medical needs who are less likely to have Medicare-covered stays, so even a steep drop in Medicare payments wouldn't necessarily appear in the bottom line.

Report: Medicare Cuts Not Only Culprit -- GAO Analyzes Sun Group Losses
Albuquerque Journal December 25, 1999, Saturday

The cut in Medicare reimbursements is only one of many factors that led to the financial troubles at Sun Healthcare Group Inc. and Vencor Inc., according to a U.S. congressional report released Thursday.

WALL STREET JOURNAL December 27, 1999, Monday

General Accounting Office finds recent changes in Medicare payments are not wholly to blame for bankruptcy filings by Vencor Inc and Sun Healthcare Group Inc, but that those changes make it harder for some patients to get into sthe facilities they prefer (M)

American Health Line January 3, 2000

Two-thirds of hospital discharge planners are encountering more difficulty in placing high-cost Medicare patients in nursing homes since changes in federal reimbursements took effect last year, according to a recently finished report by the General Accounting Office (GAO).

First round of bonuses distributed at Vencor Retention incentives reach five, six figures
The Courier-Journal (Louisville, KY.) January 5, 2000, Wednesday

Vencor Inc. paid Chief Executive Officer Edward Kuntz a bonus of $ 312,500 in November - - - The bonus payment, which was in addition to Kuntz's regular monthly salary of $57,692, was the first of three installments under an incentive plan intended to keep him and other key employees from leaving Vencor until the company's reorganization is complete.

Kuntz and 11 other so-called ''insiders'' split just under $ 1.2 million in the first installment of the retention bonuses,

Vencor asks bankruptcy judge for delay in reorganization plan
The Associated Press State & Local Wire January 6, 2000, Thursday, AM cycle

Vencor Inc. is asking for more time in which to reorganize its troubled finances.

The Louisville-based nursing home and long-term care provider filed a motion with a U.S. Bankruptcy Court in Delaware to delay until mid-March its plan to make the company financially viable. The company also asked Judge Mary Walrath to delay approval from creditors until May 12.

Vencor was supposed to have devised a reorganization plan by Jan 11, but Walrath issued an extension. Walrath also set a Jan. 27 hearing date on the request.

If Vencor is granted its request to delay filing a reorganization plan until March 13, the company would gain the exclusive right to propose any restructuring.

Givebacks may complicate bankruptcies
Modern Healthcare January 17, 2000, Monday

Much of the nursing home industry reacted with relief to the passage of the fiscal 2000 budget bill.

But for Vencor and Sun Healthcare Group, two national nursing home chains that are several months into bankruptcy proceedings, the extra money may only cause more headaches.

The Medicare givebacks are worth $2.7 billion to the nursing home industry during the next five years and may ease the sting of cuts legislated in 1997.

When Vencor and Sun filed for Chapter 11 protection last year, they blamed their financial straits on those 1997 Medicare cuts.

Ventas Completes Amended Long-term Senior Credit Facility
Business Wire February 1, 2000, Tuesday

Ventas, Inc. (NYSE:VTR) announced today that it has entered into an amended long-term credit agreement providing for the restructuring of approximately $973 million owed to its senior lenders

How will nursing home bankruptcies affect you?
Drug Topics February 21, 2000
COMMENT:- How interesting that this article which looks at the consequences for pharmacists, health care professionals dedicated to care does not mention patients once!

Forgive nursing home chains if they refer to the 1997 Balanced Budget Act as the Bankruptcy Act. In the year and a half since that legislation's prospective payment system (PPS) took effect on July 1, 1998, at least seven of the larger public and private nursing home corporations have filed for Chapter 11 bankruptcy protection. Most filings have occurred during the past seven months. More are rumored.

While the bankrupted organizations have been quick to blame Medicare reimbursement cuts under the new payment system for their plight, experts point to rapid expansion, soaring liability insurance costs, and risky corporate borrowing levels as contributing causes.

Whatever led to the current situation will likely be remedied through reorganization and refinement legislation. But what about all the interested parties hanging on when corporate ships flounder? Shareholders are in the tank. Employees will be tossed overboard as unprofitable units are divested or downsized. Everyone else gets to stand in line, hoping for maximum pennies on the dollar. So how will consultant pharmacists fare?

Vencor Extends Maturity of Its $100 Million Debtor-in-Posssesion Financing
Business Wire February 25, 2000, Friday

Vencor, Inc. (the "Company") today announced that it has agreed with its lenders to amend (the "Amendment") the Company's $100 million debtor-in-possession financing (the "DIP Financing") to extend its maturity until June 30, 2000. The Amendment also revises certain financial covenants and permits the Company to seek an extension of the period of time to file its plan of reorganization.

Ventas Completes Second Phase Closing of Long Term Credit Facility
Business Wire February 29, 2000, Tuesday

Ventas, Inc. (NYSE:VTR) announced today that as part of its recently completed amended long-term senior credit facility, it has executed and delivered to its lenders mortgages, assignments, and other related documentation granting liens and security interests in substantially all its real property assets and in other related assets by the date required under the loan agreement.

Ventas will omit dividend again pending Vencor plan
The Courier-Journal (Louisville, KY.) March 1, 2000, Wednesday

Ventas Inc. said yesterday that it will once again skip declaring a quarterly dividend to conserve cash while it waits for its main tenant, Vencor Inc., to sort out its finances.

Vencor requests second extension -- Reorganization plan is delayed; progress cited
The Courier-Journal (Louisville, KY.) March 10, 2000, Friday MET/METRO

Vencor Inc. has asked a bankruptcy judge for a second two-month extension on its deadline to reorganize its finances. The 62-day extension granted in January expires Monday.

Legislators may help nursing homes
The Tampa Tribune March 11, 2000, Saturday, FINAL EDITION

TALLAHASSEE - With some nursing homes teetering under the threat of bankruptcy protection, the House leader steps in.

Florida's nursing home industry, beset by lawsuits, bankruptcies and long-standing questions of how to improve care, could become the focus of a special session of the Legislature this summer.

Medicaid crunch hurts nursing homes
The Denver Business Journal March 17, 2000

Most of the ailing nursing homes' corporate owners are expected to pull out of what has been a two-year industry-wide slide by at least late 2000.

Health industry analysts predict Vencor Inc., a company that filed for Chapter 11 reorganization in September 1999 and owner of half a dozen Denver skilled nursing facilities, could be back on solid ground by late summer.

"We're hoping they will come through and be fine, and care and services won't suffer," said Arlene Miles, president of the Colorado Association of Health Care.

Vencor is given more time to file plan for creditors
The Courier-Journal (Louisville, KY.) March 23, 2000, Thursday

Some creditors have begun to lose patience as Vencor Inc. continues to negotiate a plan to restructure its finances so it can emerge from Chapter 11 bankruptcy.

Attorney Joel Zweibel, representing a group of secured lenders who are owed $ 565 million by Vencor, complained in court here yesterday that ''the negotiations are not progressing anywhere near as well'' as anybody expected when the nursing-home and hospital operator filed for bankruptcy protection last September.

Nevada nursing homes have nation's highest bankruptcy rate
The Associated Press State & Local Wire March 30, 2000,

Just two days before Christmas, 95-year-old Lily Coffman had to pack up her belongings and move to a new nursing home because her old one was closing abruptly. It had gone broke.

"It was awful, just awful," Coffman says. "We thought they were joking, you know, and they said, 'No, you've got to be out by the 23rd of December.' I had to get a new place in a hurry."

More than 1,600 homes have filed for bankruptcy since last fall as they struggle with federal funding cuts, a lack of local or state money, increased insurance costs, tougher quality-care standards and, for some, claims of defrauding government health care programs.

Ventas Reports 1999 Results
Business Wire March 30, 2000, Thursday

Vencor announces financial showing for year
The Associated Press State & Local Wire March 31, 2000,

Losses mounted late last year for Vencor Inc., continuing the downward spiral for the bankrupt nursing home and long-term care provider whose 1999 losses approached $700 million.

The company on Friday reported net operating losses of $683.2 million, or $9.72 per share, for the year ending Dec. 31. Operating losses totaled $572.9 million, or $8.39 per share, in 1998 as Vencor plunged deeper into debt.

Vencor's showing remained bleak in the last quarter of 1999, when it suffered a $585.6 million net loss, or $8.32 per share.

Ventas in black
The Courier-Journal (Louisville, KY.) March 31, 2000, Friday Despite charge,

Ventas Inc. says it took a fourth-quarter charge of $ 34.4 million in 1999, mostly to write off rent it didn't receive from Vencor Inc., which runs the nursing homes and hospitals the real-estate company owns. But the Louisville-based company still ended the year in the black.

Vencor Announces Amendment to Its Debtor-In-Posssesion Financing
Business Wire April 13, 2000, Thursday

Medical-device firm picks Louisville Company among five given tax incentives by Kentucky
The Courier-Journal (Louisville, KY.) April 28, 2000, Friday MET/METRO
COMMENT:- ?? rats leaving the sinking ship.

Kentucky officials yesterday approved state tax incentives for five Louisville business projects, including the home office of a medical-devices company operated by a team of former Vencor Inc. executives.

The company, Rehab Designs of America Corp., will relocate to Louisville from Overland Park, Kan., bringing 40 jobs that pay an average salary of more than $60,000.-
-Force was formerly a senior vice president and general counsel for Vencor. W. Earl Reed III, the company's president and chief executive officer, was once Vencor's chief financial officer. Two other Rehab Designs officers, chief compliance officer Thomas M. Schuhmann and chief information officer J. Guy Conces, were also Vencor executives.-
-As a result of that consulting engagement, she said, the venture-capital firms that own the company asked if the consultants would take over the company, Force said.

Ventas Files Proof of Claim in Vencor Bankruptcy Proceeding
Business Wire May 17, 2000, Wednesday

Ventas, Inc. (NYSE:VTR) said today that it has filed its proof of claim of approximately $4 billion in the Vencor, Inc. (OTCBB:VCRI) Chapter 11 bankruptcy proceeding. Filing a proof of claim is a customary requirement to preserve a claimant's rights against a debtor during the bankruptcy process.

Ventas Shareholders Reelect Board of Directors; Ventas Enters Into Tax Stipulation Agreement With Vencor
Business Wire May 24, 2000, Wednesday

Political Donations in California
-Electronic Filings By Date May 2000

California Secretary of State reveals that Vencor made political contributionsexceeding US $8000 to the California Association of Health Facilities Political Action Committee during February and April 2000 despite its bankruptcy.

Vencor could reap higher payments
Modern Healthcare May 29, 2000, Monday

Vencor last week won a federal appeals court ruling that could mean higher payments from private Medigap insurers to long-term-care hospitals.

A three-judge panel of the U.S. Circuit Court of Appeals in Washington said Louisville, Ky. -based Vencor has the right to charge "reasonable and customary" fees for the care of patients whose Medicare Part A benefits have been exhausted.-
-Vencor sued Physicians Mutual in 1998 after the insurer reduced payments to six of the company's long-term-care hospitals by a total of $2 million for care to 10 patients whose Medicare Part A benefits had been exhausted.

The appeals court sent the case back to district court for trial.

Vencor Obtains Extension to File Its Plan of Reorganization
Business Wire May 31, 2000, Wednesday

Vencor gets more time to offer plan Company says Ventas remains lone holdout
The Courier-Journal (Louisville, KY.) June 1, 2000, Thursday

Vencor Inc. told the U.S. Bankruptcy Court here yesterday that it has agreed with all of its creditors on terms for restructuring its debt, with one major exception - Ventas Inc., which owns most of the nursing homes and hospitals run by Vencor.

Vencor Extends Maturity of Its Debtor-In-Possession Financing and Obtains Commitment Letter for Restated Dip Financing
Business Wire June 14, 2000, Wednesday

Vencor, Inc. (the "Company") today announced that it has agreed with its lenders to amend (the "Amendment") the Company's debtor-in-possession financing (the "DIP Financing") to extend the maturity until September 30, 2000. The Amendment also revises certain covenants and permits the Company to file its plan of reorganization through July 18, 2000.

Vencor Receives Court Approval to Extend Maturity of ItsDebtor-In-Possession Financing
Business Wire June 29, 2000, Thursday

Vencor's plan to reorganize expected soon Bankruptcy judge grants extension to wrap up details
The Courier-Journal (Louisville, KY.) July 28, 2000, Friday

More than 10 months after seeking protection from the United States bankruptcy court in Delaware, Vencor Inc. appears on the verge of filing a plan that will allow it to emerge from Chapter 11 bankruptcy. Such a plan could come by Aug. 17.

Troubled health care company Vencor Inc. reaches agreement with federal government
The Associated Press State & Local Wire August 9, 2000,

Vencor Inc. has reached an agreement with the U.S. Department of Health and Human Services in which the troubled health care company will take various steps to assure that its practices comply with federal standards.

The corporate integrity agreement reached Tuesday is a major step toward resolving the bankrupt company's troubles with the federal government which stemmed from Medicare overbillings and allegations of poor care at some of its nursing homes.

Vencor Announces Second Quarter Results
Business Wire August 11, 2000, Friday

Ventas confirms it will pay long-delayed dividend Action required by end of year for REIT status
The Courier-Journal (Louisville, KY.) August 16, 2000, Wednesday

The Stuart News/Port St. Lucie News (Stuart,FL) September 3, 2000

WASHINGTON - One of every four people who live in nursing homes in Florida is being cared for by a company in bankruptcy proceedings.

That's potentially more than 18,500 patients in 145 facilities - 23 percent of the state's total, according to the Florida Health Care Associa-tion, an industry group for nursing homes and assisted-living facilities. Nationwide, the figure is only 10 percent.

Nursing home bankruptcies prompt call for aid; Critics say big chains
Austin American-Statesman September 4, 2000, Monday

WASHINGTON -- The nation's ailing nursing home industry is pressing for a new infusion of federal money as Congress returns to work thisnext week.-
-However, critics fault the big nursing home chains for creating their own crisis by overextending themselves and overcharging the government, even as they kept staffing so low that, according to a federal study, 54 percent of the homes fail to offer adequate care.

Nursing home industry appeals for restored funding
The Associated Press September 5, 2000

Government efforts to trim the growth of Medicare payments are wreaking financial havoc on the nation's nursing homes, industry leaders said Tuesday. - - - - Industry leaders are lobbying the government to increase the Medicare payments homes receive for patient care.-
-"Their investors and bankers gambled on a vision of ever-growing government largesse," Grassley said. "They got hurt because this vision wasn't based on reality."

Out on a limb;
The Tampa Tribune September 17, 2000, Sunday, FINAL EDITION

The "crisis" for some of Florida's largest nursing home chains began with aggressive acquisitions fueled by expectations of quick profits.-
If the industry is disintegrating, why are so many nursing home companies not in bankruptcy?

A string of witnesses who appeared before a U.S. Senate committee helped answer both questions Sept. 5. They didn't all agree, but their comments made it clear the six major companies in Chapter 11 operated in a fundamentally different way from the rest.

Vencor Receives Court Approval to Extend Maturity of Its Debtor-in-Possession Financing
Business Wire September 22, 2000, Friday

Vencor, Inc. Files Plan of Reorganization
Business Wire September 29, 2000, Friday

Vencor, Inc., (the "Company") today announced that it has filed its plan of reorganization (the "Plan") with the United States Bankruptcy Court for the District of Delaware (the "Court"). The Plan represents an important step toward finalizing a consensual arrangement among the Company's senior bank lenders, holders of the Company's $300 million 9 7/8% Guaranteed Senior Subordinated Notes due 2005, the United States Government and the Company's unsecured creditors.

Ventas Addresses Vencor's Preliminary Plan of Reorganization; Ventas Does Not Support Preliminary Plan
Business Wire September 29, 2000, Friday

Ventas, Inc. (NYSE:VTR) (the "Company") said today that it does not support the preliminary plan of reorganization filed by its primary tenant, Vencor, Inc. (OTC/BB:VCRIQ.OB) (" Vencor" ) and that the plan will require changes on substantive issues before Ventas will support it.

Vencor Receives Court Approval to Extend Maturity of Its Debtor-In-Possession Financing
Business Wire October 25, 2000, Wednesday

Despite bankruptcy, industry gives to candidates
The Associated Press State & Local Wire October 29, 2000, Sunday,

Despite its financial troubles, the nursing home industry has money to spend on legislative politics.

Its spending, however, is overshadowed by the money flowing from trial lawyers who criticize the industry.-
-But corporate nursing-home chains have funneled nearly $92,000 into campaigns as well through the Florida Health Care Association's political action committee.

Separately, seven of Florida's largest for-profit care providers have spent nearly $182,000 in the 2000 election cycle. Three of the seven - Integrated Health Services, Mariner and Vencor - have filed for bankruptcy during the same period, claiming lawsuits coupled with limited Medicaid reimbursements are driving them out of business.

A spokesman for the Florida Health Care Association defended the industry's political contributions despite its financial woes.

"People need to realize it's just a cost of doing business and one that isn't reimbursed by Medicaid," Ed Towey said.


Vencor, Inc. Announces First Amended Plan of Reorganization
Business Wire November 6, 2000, Monday

Vencor, Inc. (the "Company") today announced that it has filed its first amended plan of reorganization (the "Plan") with the United States Bankruptcy Court for the District of Delaware (the "Court").

Ventas Reports Third Quarter 2000 Results; Reviews Third Quarter Events and Other Recent Developments
Business Wire November 7, 2000, Tuesday

Vencor Announces Third Quarter Results
Business Wire November 13, 2000, Monday

Ventas Shareholders to Receive Additional Value Under Vencor's Amended Plan of Reorganization; Ventas Working Closely With Lenders to Obtain Waiver to Long-term Credit Agreement
Business Wire December 4, 2000, Monday

Ventas' support buoys Vencor plan Real-estate firm will fare better under revision
The Courier-Journal (Louisville, KY.) December 5, 2000, Tuesday

Vencor Inc. cleared a major hurdle in its emergence from bankruptcy when the longterm-care company's latest financial reorganization plan won the tentative backing of Ventas Inc., which owns most of the Vencor properties.

March 1 could be Vencor rebirth-day Reorganization plan scheduled for confirmation
The Courier-Journal (Louisville, KY.) December 7, 2000, Thursday

March 1 is when Vencor Inc. may at last have its financial reorganization plan confirmed by the U.S. District Bankruptcy Court in Wilmington, allowing the health-care company to emerge from Chapter 11 bankruptcy.

The date was set yesterday by Judge Mary Walrath in a hearing on a disclosure statement spelling out specifics of the plan.

Ventas Receives Waiver On Amended Bank Agreement; Declares 2000 Annual Dividend of $0.29 Per Share; Vencor Reorganization Progresses
Business Wire December 20, 2000, Wednesday

Bad news for post-acute-care
Modern Healthcare January 1, 2001, Monday
Vince Galloro

Providers of post-acute care should not expect 2001 to be a pleasant odyssey.

Even when there's good news, the bad overwhelms it.

Take nursing homes. With five of the 10 biggest national chains in bankruptcy court, it couldn't get much worse. Louisville, Ky.-based Vencor could be the first of the downtrodden to emerge from Chapter 11 later this month.

How the bankruptcy court treats Vencor, and how much of a discount off its crushing debt creditors will give the company in return for its equity will set standards for the other Chapter 11 providers: Genesis Health Ventures, Kennett Square, Pa.; Integrated Health Services, Sparks, Md.; Mariner Post-Acute Network, Atlanta; and Sun Healthcare Group, Albuquerque. If Vencor can become a going concern again, the stage could be set for the others.

So that's the good news. But then there's the bad news, and there's a lot of it.

Nursing home operators will find themselves under increasing pressure from two sources to raise staffing levels. (ie Federal laws and patient law suits)

Vencor Receives Court Approval to Extend Maturity of Its Debtor-in-Possession Financing
Business Wire January 18, 2001, Thursday

Vencor, Inc. (the "Company") today announced that the United States Bankruptcy Court for the District of Delaware (the "Court") approved an amendment (the "Amendment") to the Company's debtor-in-possession financing (the "DIP Financing") to extend its maturity until March 31, 2001. The Amendment also revises and updates certain financial covenants. In addition, the Amendment extends through March 31, 2001, the period of time for the Company to file the appropriate pleadings to request confirmation and consummation of its plan of reorganization.
The Company is currently soliciting approval of the Company's fourth amended plan of reorganization filed with the Court on December 14, 2000 (the "Amended Plan"). The Court has scheduled a confirmation hearing on the Amended Plan for March 1, 2001.

COMMENT:- Vencor is back in business. Shareholders have lost everything. The creditors, the banks now own the company and will want to recoup their losses. Note that there is no mention of the US $1.3 billion fraud action by the department of justice. What happened? It entered into an integrity agreement in Aug 2000 but there is no mention of any requirement to pay back the money it took or any penalty.

Like all companies which have developed a name which smells it has seized the opportunity to change its name. Soon very few will associate it with Vencor.

Vencor reorganization plan approved
Associated Press Newswires03/02/2001

LOUISVILLE, Ky. (AP) - Vencor Inc. was released from 18 months in Chapter 11 bankruptcy when a federal judge in Wilmington, Del., approved its financial reorganization plan, clearing the way for a new start as Kindred Healthcare Inc.
Judge Mary Walrath approved the reorganization that transfers ownership of the long-term care company to its major creditors - banks, bond holders and real-estate company Ventas Inc. The banks will own 65.5 percent of the new stock to be issued by Kindred, and bond holders get 24.5 percent.
However, the reorganization makes worthless souvenirs of the 70 million shares of common stock held by those who previously invested in the company.
The judge, however, denied his (a shareholder's) objections, saying, "It is clear that today the value of the company is not enough to pay its creditors. ... The shareholders are not entitled to any recovery so long as the creditors are not paid in full."

Kuntz, Vencor's CEO, said the trading symbol KIND has been reserved with the Nasdaq stock exchange for the newly named company, though it may not qualify for immediate trading because its shares will be concentrated in the hands of just a few owners.
The company still operates 295 nursing homes in 31 states and 56 hospitals in 23 states, caring for 35,000 patients, with 53,000 workers.
Because of the bankruptcy outcome and recent changes in federal reimbursements for nursing-home care, Kindred will carry far less debt, pay less in rent and get paid more for its services than it did in 1998, when Vencor went spiraling into insolvency.
The banks and bond holders slashed $570 million off Vencor's obligations in exchange for shares in Kindred. And Vencor's landlord Ventas accepted a $52 million per year cut in rent payments, down to $174 million.

The viability of Kindred means a stabilized source of income for Ventas, which gets more than 98 percent of its revenue from that company. Ventas shares have traded at their highest levels in almost two years over the past month, as investors have anticipated Thursday's court action.

Vencor reports better numbers for 4th quarter, Concessions point toward possible profit
The Courier-Journal (Louisville, KY.) March 22, 2001
HAROLD J. ADAMS, The Courier-Journal

COMMENT:- Vencor's strategy of moving its assets to Ventas has paid off. Its debtors (both government and commercial) cannot sell off any assets. Their only chance of getting some money back is to rejuvenate the company. Shareholders lose everything. The senior staff, some of whom were probably responsible for Vencor's misdeeds are richly rewarded for all this. They are given massive bonuses to compensate them for the share options they lost. This is the marketplace. It is no longer a functional part of human society. Is this in the interests of their shareholders, their debtors, or an elite group of founders and senior executives?

Vencor Inc., preparing to emerge from Chapter 11 bankruptcy, reported greatly improved performance in its 2000 earnings report issued this week.

The nursing-home and hospital company said it lost $ 53.6 million on operations - compared with a loss of $ 683.2 million in 1999, the year it went into bankruptcy.

More importantly, if concessions made by creditors in Vencor's financial reorganization had been taken into account, the company would have earned an operating profit in the fourth quarter of 2000, according to Charles Lynch, an analyst with CIBC World Markets.

''To the best of my estimation, if you made those adjustments on a retroactive basis, the fourth quarter would come out with a pretax profit,'' Lynch said.

But he would not project a specific figure.
Under the reorganization, Louisville-based Ventas, the real-estate investment trust that owns most of the properties Vencor operates, will reduce the rent it charges from $ 19.26 million per month to $ 15.13 million. The rent reduction alone adds up to more than the fourth-quarter loss.
Key employees who stayed with Vencor during its 18-month bankruptcy are being handsomely re-warded, according to an annual report filed with the Securities and Exchange Commission.

Edward Kuntz, Vencor's chairman, president and chief executive officer,- - - - -total annual compensation of just over $ 2 million - - -.

Similar increases also went to chief financial officer Richard Schweinhart, health services division president Donald Finney, hospital division president Frank Battafarano, and chief administrative officer Richard Chapman.

Schweinhart, Finney and Chapman each received bonuses of $390,886 on top of salaries of $282,935. Battafarano's bonus was $345,000 in addition to a salary of$ 248,651.

Each executive gave up stock options ranging from 75,000 to 274,879 shares that have become worthless in the past two years.

Vencor seems set to exit bankruptcy
Modern Healthcare March 26, 2001, Monday
Vince Galloro and Mark Taylor

COMMENT:- This article also describes the fraud settlement.

The company, on the cusp of ending 18 months in bankruptcy, reported last week it had slashed losses by more than 90% to $53.6 million, or 78 cents per share, in 2000 from $683.2 million, or $9.72 per share, in 1999. Revenue climbed 8.4% to nearly $2.9 billion.

Investors are showing their approval of Vencor's reorganization plan by bidding up the prices of its bank debt and bonds, said Tom Shinkle, a healthcare analyst at Imperial Capital, a Beverly Hills, Calif.-based brokerage and investment bank. The equity that lenders and bondholders will receive from the reorganization, when compared with the discount on Vencor's debt, implies a stock value of $27.50 per share, Shinkle said.

Vencor's new life holds promise for Ventas Real-estate company's stock rebounds; income expected to stabilize
The Courier-Journal (Louisville, KY.) April 1, 2001
HAROLD J. ADAMS, The Courier-Journal

COMMENT:- Remember that Ventas was a part of Vencor and shared many members of Vencor's board and staff. New Court actions claim that Ventas was actually the ongoing entity and that the new entity Vencor was set up to carry the debt and go under.

Note how the market is supporting Ventas. In spite of Vencor's record for ruthless antisocial behaviour the market is preparing to welcome Vencor back into the fold and will no doubt advise Americans to buy its shares. This is how the system works. It is about money - not people.

When Vencor officially emerges from Chapter 11 bankruptcy, a move that could happen this week, the coming-out party will feature a second guest of honor: Ventas Inc.

As the real-estate company that owns the hospital and nursing-home buildings that Vencor operates, Louisville-based Ventas is dependent on Vencor for nearly all of its revenue. So it had to sweat every detail of the nursing-home operator's 18-month odyssey to financial reorganization.-
But Ventas has not just survive. It has emerged over the past year as one of the nation's top-performing real-estate investment trusts (REITs). The company's stock price has tripled since its low point last year, and its chief executive says Ventas is preparing for expansion.-
Jerry Doctrow, an analyst with Legg Mason Wood Walker Inc., called Ventas ''an attractive investment vehicle through which to play the rebound in the skilled-nursing industry.''-
Vencor, which will change its name to Kindred Healthcare Inc., is the first of those companies to emerge with a new balance sheet that promises renewed financial health, thanks to concessions from its creditors. Those creditors agreed to slash Vencor's debt burden from about $ 950 million to $300 million in exchange for ownership of most of the company.-
Regular dividends are normally a key part of the return for REIT shareholders. But Ventas dividends have been few and far between as the company has hoarded cash during the Vencor bankruptcy. - - - And those distributions amounted to the minimum required to maintain the company's tax-free status as a REIT.-
Those proceeds could be used to add non- Vencor properties to the company. ''It would allow us to diversify if we could buy other portfolios or other companies,'' Cafaro said.-
But she focused on being a buyer. There is a 12- to 24-month window of opportunity to acquire other nursing-home properties at attractive prices, Cafaro said. She expects valuations to remain low during that period, before the recovery that's beginning in the industry shows up in earnings reports and drives prices back up.-
Investors have already signaled their agreement by bidding Ventas shares to new 52-week highs since it became apparent that the Vencor reorganization would be approved. After bottoming out at $ 2.81 per share last year, Ventas has traded well over $ 8 per share lately.-
He said that made the Louisville company the best performer among 13 health- care REITs, which averaged 16.3 percent. -
While the high return for 2000 is a sign of investor confidence, it is also a function of how low Ventas shares sunk when it was the worst performing health-care REIT the year before, with a return of minus 49 percent.

Ventas to File 10-K Following Vencor Effective Date; Ventas Pays $35 Million to Lenders On March 30, 2001; Ventas Reports 2000 FFO of $1.12 Per Share
Business Wire April 2, 2001, Monday

Ventas expects to file its 2000 Form 10-K as soon as possible after the effective date of the Vencor Plan of Reorganization (the "Effective Date"). The Plan provides that the Effective Date must occur by May 1, 2001.-

Ventas also said that, on March 30, 2001, it paid $35 million of principal to its lenders. Ventas has paid down more than $122 million under its Amended Credit Agreement, which now has an outstanding balance of about $852 million.-

Funds from operations ("FFO") for the year ended December 31, 2000 totaled $76.5 million, or $1.12 per diluted share. FFO for the comparable period in 1999 totaled $85.0 million, or $1.25 per diluted share.-
Ventas, Inc. is a real estate company whose properties include 45 hospitals, 216 nursing centers, and eight personal care facilities in 36 states.

Vencor financial standing improves, Fourth quarter saw gain in funds from operations; dividend boost possible
The Courier-Journal (Louisville, KY.) April 4, 2001
HAROLD J. ADAMS, The Courier-Journal

COMMENT:- This article is really about Ventas

Debra Cafaro, Ventas' chief executive officer, said the real-estate investment trust's fourth-quarter boost in funds from operations was due to increased investment earnings and a decrease in fees connected with working through the bankruptcy of Vencor, its primary tenant.

Despite that, Ventas' total funds from operations for the year, $ 76.5 million, were less than the 1999 figure of $ 85 million, or $ 1.25 per share.-
Ventas shares have risen 19 cents since the Monday morning earnings announcement to close yesterday at a new 52-week high of $ 8.69.

Vencor Emerges From Chapter 11; Changes Name to Kindred Healthcare
Business Wire 04/20/2001

COMMENT:- Vencor comes out of bankruptcy. Note the hypocrisy of the new name which reflects the company's "quality, compassion and integrity". It has a dreadful record for its lack of quality in care and is still being cited for poor care. It was so compassionate that it discharged patients when their Medicare funding ran out regardless of their needs. This policy came from the top. As for integrity - well it has just reached a massive settlement which claimed that it defrauded the nation.

This is the sort of dishonesty that is accepted without critical comment or censure by the market. It soon becomes a focus of corporate marketing and then the reality accepted by the community. There is something very sick about this but it is the way the market operates. National Medical Enterprises (NME) did the same when it renamed itself Tenet Healthcare in 1995.

LOUISVILLE, Ky.--(BUSINESS WIRE)--April 20, 2001--Vencor, Inc. (the "Company") today announced that it has emerged from Chapter 11 following the successful implementation of its fourth amended plan of reorganization. The Company also has changed its name to Kindred Healthcare, Inc. "We are pleased that our reorganization is complete and that we have achieved our goal of attaining a sustainable capital structure for the Company. We look forward to continuing to serve the more than 36,000 residents and patients whose care and well-being are entrusted to us," said Edward L. Kuntz, Chairman, Chief Executive Officer and President of the Company. -
As a result of filing the Form 8-A, the Company will maintain its status as a public company subject to the periodic reporting requirements of the Securities Exchange Act of 1934. -
The name Kindred Healthcare was selected to reflect the Company's values - quality, compassion and integrity.

"This name reflects the kinship we feel for the residents and patients we serve, and it conveys a sense of family, strength, unity, nurturing and kindness," Mr. Kuntz said. "To the name we've added the image of a person, thereby giving a human element to our identity and reinforcing our commitment to take care of people who cannot take care of themselves."

Ventas' Tenant Emerges From Bankruptcy; Ventas Declares Quarterly Dividend of $0.22; Issues FFO and Dividend Guidance; Ventas Receives Equity Stake in Kindred Healthcare
Business Wire April 23, 2001, Monday

Ventas, Inc. (NYSE:VTR) ("Ventas" or the "Company") said today that its primary tenant, Vencor, Inc., has emerged from Chapter 11 Bankruptcy - - - .-
Ventas President and CEO Debra A. Cafaro said. "The successful reorganization of our primary tenant sends yet another signal that the long-term healthcare sector recovery is underway. We expect that recovery to accelerate as increased Medicare payments to the nursing home industry take effect this quarter."-
On the Effective Date, Ventas received 9.99 percent of the issued and outstanding common stock in Kindred, representing rent for subsequent periods under the four Amended Master Leases.-

On the Effective Date, Ventas paid $34 million to the DOJ as part of its previously-announced settlement of all Medicare billing disputes, investigations and claims. It will pay an additional $69.6 million to the DOJ in equal quarterly installments over a period of five years, at six percent interest.

Confident Ventas :::: Stable income lets company reinstate
The Courier-Journal April 23, 2001

Ventas Inc., finally confident of steady rental income following the emergence of its primary tenant from bankruptcy last week, yesterday announced the reinstatement of a regular quarterly dividend.-
Cafaro said the company could diversify by acquiring other companies, swapping properties with other companies, or through Kindred making a deal with another operator.

Kindred Healthcare Sells Interest in Behavioral Healthcare Corporation for $40 Million
Business Wire May 2, 2001

Business Watch ----Kindred sells stake in health company.
The Courier-Journal (Louisville, KY.) May 4, 2001

Kindred Healthcare, which used to be known as Vencor, has sold its majority stake in Behavioral Healthcare Corp. for $ 40 million.

That should bring a welcome infusion of cash for the Louisville health-care company, which emerged from Chapter 11 bankruptcy on April 20.

Louisville, Ky.-Based Nursing Home Operator Shows Improved Quarterly Results
Lexington Herald-Leader May 16, 2001
By Karla Dooley

After two years of hard times, Louisville-based nursing home operator Kindred Healthcare Inc. and its landlord, Ventas Inc., appear to be on the road to recovery.

Both companies have released improved first quarter results.-
Kindred is doing better, too. It reported first quarter revenues yesterday of $ 752 million, compared with $ 715 million a year earlier.-
Kindred, formerly known as Vencor, officially emerged from bankruptcy April 20.

Since then, its stock value has escalated during limited over the counter trading. Kindred (KIND.OB: OTC BB) closed yesterday at $ 38.50 a share.-
Kindred operates 295 nursing homes and 56 hospitals, - - - .


Health Care Property Investors Inc. Renews 22 Nursing Center Leases With Kindred Healthcare Inc.
Business Wire May 17, 2001

Health Care Property Investors Inc. (NYSE:HCP) and Kindred Healthcare Inc. (OTCBB:KIND) today announced they have reached an agreement to renew 22 nursing center leases.

Press Release May 25, 2001

COMMENT:- Action taken by shareholders alleging deception and fraud when Vencor split into Ventas and Vencor in 1998. Full report is on the Vencor fraud web page with a report of a similar action by another group of shareholders.

Kindred began life owing millions in taxes, Vencor successor has made payments since reorganization
The Courier-Journal (Louisville, KY.) June 10, 2001
HAROLD J. ADAMS, The Courier-Journal

COMMENT:- In spite of all the encouraging hype in the marketplace Vencor/Kindred still has a lot of money it has to pay back before it allocates profits.

State and local governments are among thousands of creditors of the former Vencor Inc. who have gone unpaid during the 20 months since the nursing-home and hospital company filed for Chapter 11 bankruptcy.

The company has made some payments since it emerged from bankruptcy in April. The amounts are small pieces of the overall claims. -
Vencor emerged from bankruptcy on April 20 as Kindred Healthcare Inc. Its plan of reorganization includes a provision for paying tax claims and some other classes of debts. But it's unclear how much the taxing authorities will collect, and when.-
The Kentucky and Indiana amounts are a fraction of the taxes the company owes in the 46 states where it operated before the bankruptcy. A statement filed with the bankruptcy court by Kindred says the total of ''allowed'' tax claims nationwide is $ 15 million.

The document said taxes would be paid 30 days after the April 20 effective date of the reorganization, or, at Kindred's option, over a six-year period from the date of each tax assessment. More than 50 days after the reorganization, the taxes remain mostly unpaid.-
The claim by Jefferson County includes $ 443,991 in taxes plus $ 229,767 in penalties and interest. The penalties will not be paid because they are wiped out under bankruptcy law, Schardein and Williams said.-
Government officials say Kindred Healthcare Inc. owes $ 112,812 in realestate taxes on its headquarters at Fourth Street and Broadway

Analysts rate Ventas a buy, see rosy future
The Courier-Journal (Louisville, KY.) June 10, 2001

COMMENT:- The market welcomes Vencor's emergence from bankruptcy and the positive implications for Ventas.

What a difference a year makes.

Last year, shares of Louisville-based Ventas Inc. were barely breathing at $ 3, but they've staged a recovery and analysts like the prognosis.

Among four analysts who track Ventas ($ 9.55, VTR), all rate the stock a buy, with price targets of at least $ 10 and a potential 12-month total return (stock appreciation plus dividends) of about 12 percent or more. So far this year, the stock alone was recently up about 70 percent.-
''With the emergence of Kindred from bankruptcy, Ventas has gone from being the health-care REIT with the highest level of exposure to bankrupt operators to the one with the least,'' said analyst John Roberts of Hilliard Lyons.

''As a result, we believe its valuation should reflect this improved circumstance, although we note that it should still not receive the type of multiple commanded by the best in the business because of its lack of diversification.''

Ventas earnings rise, predicted continued upswing
The Associated Press State & Local Wire August 10, 2001

Ventas Inc. reported higher second-quarter earnings Friday and predicted a continued upswing with the emergence of its primary tenant from bankruptcy and a Medicare rate increase.
Ventas received nearly 1.5 million shares of Kindred common stock as part of Kindred's reorganization.

The New Math of Old Age: Why the nursing home industry's cries of poverty don't add up
Health & Medicine September 30, 2002

The story is similar for Kindred Healthcare Inc., another of the big chains, which recently emerged from bankruptcy proceedings, and which also has complained about government payments. With the stock market in a historic bear market, Kindred has blown past Wall Street profit estimates and re-established its financial footing much better than expected. "Our progress has been excellent," CEO Edward L. Kuntz told analysts recently. "We're obviously pleased."
It (the GAO) also cited Vencor Inc., known today as Kindred, which reorganized into two parts, causing rental expenses to quadruple. "There were some serious cowboys in the business in the mid-'90s," Scully says.

Inadequate Medicaid payments squeeze homes' level of care
St. Louis Post-Dispatch October 14, 2002

Kindred Healthcare Inc., formally known as Vencor Inc., operates 290 nursing homes in 32 states. The Justice Department demanded $1.3 billion for what the department termed fraudulent billings. Eventually the parties settled for repayment of $130 million.
Even in the tougher regulatory environment, some operators thrive.

Kindred HealthCare Inc., the nation's third-largest nursing home chain, emerged from bankruptcy in April of last year and immediately showed a profit. In fact, taking into consideration a one-time gain associated with elimination of debt in its bankruptcy, Kindred last year reported a profit of $524 million on revenue of $3.1 billion, or about 17 percent, according to company financial reports.
Regardless of performance, many executives do well.

Last year, for example, Edward Kuntz, Kindred's CEO, was paid $4.9 million in salary and other compensation as well as restricted stock and options valued at $7.9 million, a company filing shows.

Comment:- Note that Tenet is one of Ventas largest shareholders.

Ventas to Commence Joint Offering of 16 Million Shares of Common Stock;
BUSINESS WIRE December 2, 2002

That registration statement covers approximately 8 million shares of Ventas common stock owned by two subsidiaries of Tenet Healthcare Corporation (NYSE:THC) ("Tenet"), one of Ventas's largest shareholders.

Kindred stock slides on loss : Shares dip 7 percent; Ventas deal ignored
May 16, 2003

Kindred Healthcare's stock fell 7 percent yesterday on news of the company's $13 million loss last quarter, and the company's chief executive confirmed it might sell some operations.
The deal to sell 15 nursing homes in Florida and one in Texas was sparked by Kindred's rising lawsuit-related costs there, which have lowered profits.
Kindred will pay Ventas about $60 million for the 16 properties, clearing the way for Kindred to sell the homes to a third party.
He said the deal's real value was in getting Kindred largely out of two states where liability claims have skyrocketed.

Kindred Healthcare to sell Fla. nursing centers for $65M
South Florida Business Journal May 21, 2003

Louisville, Ky.-based Kindred Healthcare (Nasdaq: KIND) said it plans to divest all of its Florida nursing center operations and sell them to Senior Health Management for about $65 million in cash.

Kindred's outlook improves : Stock soars 35% in wake of divestiture
The Courier-Journal August 15, 2003

Investors apparently like the look of Kindred Healthcare now that it has shed its worrisome Florida and Texas nursing homes.

The Louisville company's stock shot up 35 percent in the last two days after it released second-quarter results showing how much healthier the company will be without those homes.

Yesterday Kindred stock closed at $29.74 in heavy trading on the Nasdaq Stock Market.
Kindred sold the 20 Florida and Texas homes because fast-growing lawsuit costs in the two states had caused big losses there.

The divestiture wasn't wrapped up until the end of June, so the second-quarter results still showed the homes' ravages — including $17 million in operating losses plus a $36 million loss from their sale.

But the results also provided signs of how much better Kindred's bottom line may be without the homes, and how some other company operations have improved.
Kindred Healthcare reported a second-quarter loss of $43 million this week, but said the entire loss was caused by the troubled Florida and Texas nursing homes it sold. Discounting them, the company's operations earned $10 million.

Update Comment August 2003 (see above):- The reason why Kindred is doing well can be surmised from the update on care. It is once again accused by the nurses of cutting staff and is facing several court actions relating to quality of care. It was forced out of Florida and Texas where lawsuits were causing it large losses.

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This page created Jan 2001, updated Mar 2001, in Aug 2001 and Aug. 2003 by Michael Wynne