========================================================================== VENCOR BANKRUPTCY NEWS Issue Number 1 -------------------------------------------------------------------------- Copyright 1999 (ISSN XXXX-XXXX) September 13, 1999 -------------------------------------------------------------------------- Bankruptcy Creditors' Service, Inc., Phone 609-392-0900 FAX 609-392-0040 -------------------------------------------------------------------------- VENCOR BANKRUPTCY NEWS is published by Bankruptcy Creditors' Service, Inc., 24 Perdicaris Place, Trenton, New Jersey 08618, on an ad hoc basis (generally every 10 to 20 days) as significant activity occurs in the Debtors' cases. Each issue is prepared by Peter A. Chapman, Editor. Subscription rate is US$45 per issue. Reproduction of VENCOR BANKRUPTCY NEWS by any means is prohibited without the permission of the publisher. ========================================================================== IN THIS ISSUE ------------- [00000] HOW TO ORDER A SUBSCRIPTION TO VENCOR BANKRUPTCY NEWS [00001] BACKGROUND & DESCRIPTION OF VENCOR, INC. [00002] COMPANY'S CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 1999 [00003] COMPANY'S PRESS RELEASE CONCERNING CHAPTER 11 FILING [00004] VENCOR, INC., AND DEBTOR AFFILIATES CHAPTER 11 DATABASE [00005] LIST OF THE DEBTORS' 20 LARGEST UNSECURED CREDITORS [00006] DEBTORS' MOTION FOR JOINT ADMINISTRATION OF CASES [00007] VENTAS RESPONDS TO VENCOR'S CHAPTER 11 FILINGS [00008] WHAT HAPPENS TO VENCOR COMMON STOCK & PUBLIC BONDS? KEY DATE CALENDAR ----------------- 09/13/99 Voluntary Petition Date 09/28/99 Deadline for filing Schedules of Assets and Liabilities 09/28/99 Deadline for filing Statement of Financial Affairs 09/28/99 Deadline for filing List of Leases and Executory Contracts 10/03/99 Deadline to provide Utility Companies with adequate assurance 11/12/99 Deadline to assume or reject leases and executory contracts 12/12/99 Deadline for removal of actions pursuant to F.R.B.P. 9027 01/11/00 Expiration of Debtors' Exclusive Period to propose a Plan 03/11/00 Expiration of Debtors' Exclusive Solicitation Period 09/12/01 Deadline for Debtors' Commencement of Avoidance Actions Organizational Meeting with UST to form Official Committees Bar Date for filing Proofs of Claim First Meeting of Creditors pursuant to 11 U.S.C. Sec. 341(a) Expiration of DIP Financing Facility -------------------------------------------------------------------------- [00000] HOW TO ORDER A SUBSCRIPTION TO VENCOR BANKRUPTCY NEWS -------------------------------------------------------------------------- VENCOR BANKRUPTCY NEWS is distributed to paying subscribers by electronic mail or facsimile transmission. New issues are published on an ad hoc basis as significant activity occurs (generally every 10 to 20 days) in the Debtors' cases. The subscription rate is $45 per issue. Newsletters are delivered via e-mail; invoices, transmitted with each newsletter issue, arrive by fax. Distribution to multiple individuals at the same firm is provided at no additional charge. Prompt payment is always appreciated. Subscriptions may be canceled at any time without further obligation. 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Name: ---------------------------------------------- Firm: ---------------------------------------------- Address: ---------------------------------------------- ---------------------------------------------- Phone: ---------------------------------------------- Fax: ---------------------------------------------- E-Mail: ---------------------------------------------- -------------------------------------------------------------------------- [00001] BACKGROUND & DESCRIPTION OF VENCOR, INC. -------------------------------------------------------------------------- VENCOR, INC. One Vencor Place 680 South Fourth Street Louisville, KY 40202-2412 Phone: 502-596-7300 Fax: 502-596-7499 http://www.vencor.com Vencor, Inc. (f/k/a Vencor Healthcare, Inc.) is one of the largest providers of long-term healthcare services in the United States. At June 30, 1999, the Company operated 293 nursing centers (38,387 licensed beds), 56 long-term acute care hospitals (4,935 licensed beds), and its Vencare ancillary services business which provided respiratory and rehabilitation therapies, medical services and pharmacy management services (under thousands of contracts) to both Company-operated and non-affiliated nursing centers. Vencor currently operates in 46 states. Healthcare services provided through the Vencor network include long-term hospital care, nursing care, contract respiratory therapy services, post-operative care, in-patient and out-patient rehabilitation therapy, specialized care for Alzheimer's disease and pharmacy services. Vencor employs approximately 42,600 full-time and 15,300 part-time and per diem employees. Vencor is a party to 30 collective bargaining agreements covering 3,300 unionized employees. The Company's headquarters staff, located at One Vencor Place, occupies a 287,000 square foot building located in Louisville, Kentucky. THE SPIN-OFF TRANSACTION In January 1998, the Board of Directors of Ventas (formerly known as Vencor, Inc.) authorized its management to proceed with a plan to separate Ventas into two publicly-held corporations: * Vencor, Inc., to operate the hospital, nursing center and ancillary services businesses and * Ventas, Inc., to own substantially all of the real property of Ventas and to lease the real property to a new operating company. In anticipation of the Spin-Off, Vencor was incorporated on March 27, 1998 to be the new operating company. On April 30, 1998, Ventas completed the spin-off of its healthcare operations from its real estate holdings through the distribution of Vencor common stock on a one-for-one basis to Ventas shareholders of record as of April 27, 1998. The Distribution was completed on May 1, 1998. In connection with the Spin-Off, Vencor manages and operates the real property which it leases from Ventas pursuant to four master lease agreements. OPERATING DIVISIONS In November 1998, Vencor organized its operations into three operational divisions coinciding with its primary lines of business: (a) Hospitals, (b) Nursing Centers, and (c) Ancillary Services under the Vencare nameplate. A. Hospital Division Vencor hospitals primarily provide long-term acute care to medically complex, chronically ill patients. For the year ending December 31, 1998, selected hospital operating data reflected: Revenues.......................................... $919,847,000 Operating income.................................. $259,874,000 Hospitals in operation at end of period........... 57 Number of licensed beds at end of period.......... 4,979 Patient days...................................... 947,488 Average daily census.............................. 2,596 Occupancy ........................................ 54% In 1998, Medicare patients account for 68% of Patient Days at Vencor facilities; Medicaid, 13%; and Private Insurance Plans, 19%. Medicare payments accounted for 59% of Vencor's $919.8 million in 1998 Hospital Revenues; Medicaid, 10%; and Private Insurance Plans, 31%. At year-end, Vencor hospitals were located in 45 geographic markets in 23 states, experiencing intense competition for patients covered by high-profit-margin non-government reimbursement sources. B. Nursing Center Division Vencor provides long-term care and subacute medical and rehabilitation services in 291 nursing centers containing 38,362 licensed beds located in 31 states. At December 31, 1998, Vencor owned five nursing centers, leased 273 nursing centers from third parties and managed 13 nursing centers, providing physical, occupational and speech rehabilitation services. The majority of patients in rehabilitation programs stay for eight weeks or less. Patients in rehabilitation programs generally provide higher revenues than other nursing center patients because they require a higher level of ancillary services. In addition, management believes that Vencor is a leading provider of care for patients with Alzheimer's disease. For the year ending December 31, 1998, Selected Nursing Center Operating Data reflected: Revenues..................................... $1,621,662,000 Operating income............................. $ 245,569,000 Number of nursing centers operating.......... 291 Number of licensed beds at end of period..... 38,362 Patient days................................. 11,939,266 Average daily census......................... 32,710 Occupancy.................................... 87% In 1998, Medicare patients account for 13% of Patient Days at Vencor Nursing Home facilities; Medicaid, 65%; and Private Insurance Plans, 22%. Medicare payments accounted for 29% of Vencor's $1.6 billion in 1998 Nursing Home Revenues; Medicaid, 45%; and Private Insurance Plans, 26%. At year-end, Vencor Nurshing Homes were located in 45 geographic markets in 23 states, experiencing intense competition for patients covered by non- government reimbursement sources. C. Ancillary Services Division Through its Vencare ancillary services division, Vencor has expanded the scope of its cardiopulmonary care provided in its hospitals by providing rehabilitation therapy and respiratory care services and supplies to nursing and subacute care centers. In November 1996, Vencor consolidated its pharmacy operations under its ancillary services division. In the third quarter of 1998, Vencor sold or closed its hospice and homecare businesses. In addition, the rehabilitation, respiratory and other healthcare services previously provided by TheraTx have been integrated into the ancillary services division. For the year ended December 31, 1998, revenues from the ancillary services division totaled approximately $582.7 million which represented 18.7% of Vencor's total revenues. MASTER LEASE AGREEMENTS As part of the January, 1998 Spin-Off Transactions, Vencor and Ventas entered into four Master Lease Agreements for substantially all of the real property, buildings and other improvements used by Vencor. Ventas, a REIT, owns the real estate; Vencor manages and operates the properties. The Leased Properties are divided into four groups, and each group of properties is subject to a separate Master Lease Agreement. The Master Lease Agreements have 10 to 15 year Base Terms, provide for up to three 5-year renewal terms, require annual lease payments of approximately $222 million (subject to 2% annual escalations). Use of the properties is restricted to providing healthcare services. The Master Lease Agreements provide that Vencor may not assign, sublease or otherwise transfer any Lease or any portion of a Leased Property as a whole (or in substantial part), including upon a Change of Control event, without Ventas' consent, which may not be unreasonably withheld if the proposed assignee is a creditworthy entity with sufficient financial stability to satisfy its obligations under the Lease, has not less than four years experience in operating health care facilities, has a favorable business and operational reputation and character and agrees to comply with the use restrictions in the Master Lease Agreements. Vencor may sublease up to 20% of each Leased Property for restaurants, gift shops and other stores or services customarily found in hospitals or nursing centers without the consent of Ventas, subject, however, to there being no material alteration in the character of the Leased Property or in the nature of the business conducted on such Leased Property. Additionally, the Master Lease Agreements provide that if Ventas receives a bona fide offer from a third party to purchase any Leased Property during the first three years of the Base Term and Ventas wishes to accept the offer, then, prior to entering into a contract of sale with the third party, Ventas must first offer Vencor the right to purchase the Leased Property on substantially the same terms and conditions as are contained in the third party offer. -------------------------------------------------------------------------- [00002] COMPANY'S CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 1999 -------------------------------------------------------------------------- VENCOR, INC. CONDENSED CONSOLIDATED BALANCE SHEET June 30, 1999 ASSETS Current assets: Cash and cash equivalents.................................... $ 28,537 Accounts and notes receivable less allowance for loss........ 454,556 Inventories.................................................. 32,055 Income taxes................................................. 12,073 Other........................................................ 73,950 ---------- 601,171 Property and equipment, at cost............................... 793,640 Accumulated depreciation...................................... (301,513) ---------- 492,127 Goodwill less accumulated amortization........................ 444,826 Investments in affiliates..................................... 15,466 Assets held for sale.......................................... 23,432 Other......................................................... 73,123 ---------- $1,650,145 ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable............................................. $ 114,876 Salaries, wages and other compensation....................... 144,947 Due to third party payors.................................... 27,080 Other accrued liabilities.................................... 143,879 Long-term debt due within one year........................... 8,888 Long-term debt in default classified as current.............. 789,609 ---------- 1,229,279 Long-term debt................................................ 76,395 Deferred credits and other liabilities........................ 95,263 Series A preferred stock...................................... 1,743 Stockholders' equity: Common stock................................................. 17,598 Capital in excess of par value............................... 664,253 Accumulated deficit.......................................... (434,386) ---------- 247,465 ---------- $1,650,145 ========== -------------------------------------------------------------------------- [00003] COMPANY'S PRESS RELEASE CONCERNING CHAPTER 11 FILING -------------------------------------------------------------------------- Vencor, Inc. Files for Chapter 11 Protection; $100 Million Debtor in Possession Financing Secured; Normal Operations to Continue in All Facilities LOUISVILLE, Kentucky -- September 13, 1999 -- 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.. The company also announced that it has obtained agreements for debtor- in-possession (DIP) financing with a bank group led by Morgan Guaranty Trust Company of New York in the aggregate principal amount of $100 million. The DIP financing and existing cash flows, upon bankruptcy court approval, will be used to fund the company's ongoing operations. Along with the petition, Vencor also has a plan of reorganization in progress that includes terms negotiated with key parties, including Vencor's bank lenders, subordinated debtholders, and Ventas, Inc. (NYSE: VTR), the company's primary landlord. In addition, a settlement is in progress with the Department of Justice, acting on behalf of the Health Care Financing Administration and the Department of Health and Human Services' Office of the Inspector General, concerning the government's outstanding claims against the company, including outstanding routine reimbursement issues. Edward L. Kuntz, chairman, chief executive officer and president of Vencor, stated, "Filing for reorganization was necessary to enable us to create a sustainable capital structure, while we continue to provide high- quality healthcare services to those people who cannot take care of themselves." Kuntz added, "The reorganization also was necessary because of the dramatic changes impacting the long-term care industry, most notably decreased Medicare reimbursement. We believe we are taking the appropriate steps to assure that we emerge from the reorganization process with a sound capital structure that will enhance the vital services that our dedicated employees provide to our patients, residents, and customers." Vencor, Inc. is a long-term healthcare provider operating nursing centers, hospitals, and ancillary contract services in 46 states. -------------------------------------------------------------------------- [00004] VENCOR, INC., AND DEBTOR AFFILIATES CHAPTER 11 DATABASE -------------------------------------------------------------------------- PARENT COMPANY: Vencor, Inc. DEBTOR AFFILIATES FILING SEPARATE CHAPTER 11 PETITIONS: Vencor Operating, Inc., a Delaware corporation Vencor Hospitals East, L.L.C., a Delaware LLC Vencor Hospitals West, L.L.C., a Delaware LLC Vencor Nursing Centers East, L.L.C., a Delaware LLC Vencor Nursing Centers West, L.L.C., a Delaware LLC Vencor Nursing Centers South, L.L.C., a Delaware LLC Vencor Nursing Centers North, L.L.C., a Delaware LLC Vencor Nevada, L.L.C., a Delaware LLC Vencor Holdings, L.L.C., a Delaware LLC Vencor Investment Company, a Delaware corporation Ventech Systems, Inc., a Delaware corporation Vencare, Inc., a Delaware corporation Vencor Hospice, Inc., a Kentucky corporation Vencor Facility Services, Inc., a Delaware corporation Vencor Pediatric Care, Inc., a Delaware corporation Vencor Home Care Services, Inc., a Delaware corporation Medisave Pharmacies, Inc., a Delaware corporation Medisave of Tennessee, Inc., a Delaware corporation American X-Rays, Inc., a Louisiana corporation First Rehab, Inc., a Delaware corporation Advanced Infusion Systems, Inc., a California corporation [Subsidiaries of Non-Debtor TheraTx, Incorporated] Health Care Holdings, Inc., a Delaware corporation Health Care Technology, Inc., a Delaware corporation Helian Health Group, Inc., a Delaware corporation Helian ASC of Northridge, Inc., a California corporation MedEquities, Inc., a California corporation Helian Recovery Corporation, a California corporation Recovery Inns of America, Inc., a Calif. corporation VC - OIA, Inc., an Arizona corporation Palo Alto Surgecenter Corporation, a California corporation VC - TOCH, Inc., an Arizona corporation Horizon Healthcare Services, Inc., a Georgia corporation Tunstall Enterprises, Inc., a Georgia corporation PersonaCare, Inc., a Delaware corporation Lafayette Health Care Center, Inc., a Georgia corporation PersonaCare Living Center of Clearwater, Inc., a Del. corp. PersonaCare of Bradenton, Inc., a Delaware corporation PersonaCare of Clearwater, Inc., a Delaware corporation PersonaCare of Connecticut, Inc., a Connecticut corporation Courtland Gardens Health Center, Inc., a Conn. corp. Homestead Health Center, Inc., a Conn. corp. Stamford Health Facilities, Inc., a Conn. corp. PersonaCare of Georgia, Inc., a Delaware corporation PersonaCare of Huntsville, Inc., a Delaware corporation PersonaCare of Little Rock, Inc., a Delaware corporation PersonaCare of Ohio, Inc., a Delaware corporation PersonaCare of Owensboro, Inc., a Delaware corporation PersonaCare of Pennsylvania, Inc., a Delaware corporation PersonaCare of Pompano East, Inc., a Delaware corporation PersonaCare of Pompano West, Inc., a Delaware corporation PersonaCare of Reading, Inc., a Delaware corporation PersonaCare of San Antonio, Inc., a Delaware corporation PersonaCare of San Pedro, Inc., a Delaware corporation PersonaCare of Shreveport, Inc., a Delaware corporation PersonaCare of St. Petersburg, Inc., a Delaware corporation. PersonaCare of Warner Robbins, Inc., a Delaware corporation PersonaCare of Wisconsin, Inc., a Delaware corporation PersonaCare Properties, Inc., a Georgia corporation Tucker Nursing Center, Inc., a Georgia corporation Respiratory Care Services, Inc., a Delaware corporation TheraTx Health Services, Inc., a Delaware corporation TheraTx Rehabilitation Services, Inc., a Del. corporation TheraTx Healthcare Management, Inc., a Delaware corporation TheraTx Management Services, Inc., a California corporation TheraTx Medical Supplies, Inc., a Delaware corporation TheraTx Staffing, Inc., an Illinois corporation VC - WM, Inc., a Florida corporation Transitional Hospitals Corporation, a Nevada corporation Community Psychiatric Centers of Oklahoma, Inc., an Okla. Corp. CPC of Georgia, Inc., a Georgia corporation Interamericana Health Care Group, a Nevada corporation Transitional Hospitals Corporation, a Delaware corporation JB Thomas Hospital, Inc., a Maine corporation THC - Chicago, Inc., an Illinois corporation THC - North Shore, Inc., an Illinois corporation THC - Hollywood, Inc., a Florida corporation THC - Houston, Inc., a Texas corporation THC - Minneapolis, Inc., a Minnesota corporation THC - Orange County, Inc., a California corporation THC - San Diego, Inc., a California corporation THC - Seattle, Inc., a Washington corporation Transitional Hospitals Corporation of Indiana, Inc., an Indiana corporation Transitional Hospitals Corporation of Louisiana, Inc., a Louisiana corporation Transitional Hospitals Corporation of New Mexico, Inc., a New Mexico corporation Transitional Hospitals Corporation of Nevada, Inc., a Nevada corporation Transitional Hospitals Corporation of Tampa, Inc., a Florida corporation Transitional Hospitals Corporation of Texas, Inc., a Texas corporation Transitional Hospitals Corporation of Wisconsin, Inc., a Wisconsin corporation Transitional Hospitals Corporation of Michigan, Inc., Michigan corporation Community Psychiatric Centers of Arkansas, Inc., an Arkansas corporation Community Psychiatric Centers of California, a California corporation CPC Investment Corp., a California corporation CPC Properties of Illinois, Inc., an Illinois corp. CPC Properties of Missouri, Inc., a Missouri corp. Community Psychiatric Centers of Florida, Inc., a Florida corp. Community Psychiatric Centers of Idaho, Inc., an Idaho corp. Community Psychiatric Centers of Indiana, Inc., an Indiana corp. Community Psychiatric Centers of Kansas, Inc., a Kansas corp. Community Psychiatric Centers of Mississippi, Inc., a Miss. Corp. Community Psychiatric Centers of Missouri, Inc., a Missouri corp. Community Psychiatric Centers of North Carolina, Inc., a North Carolina corporation Community Psychiatric Centers of Utah, Inc., a Utah corporation Community Psychiatric Centers Properties of Texas, Inc., a Texas corporation Community Psychiatric Centers Properties of Utah, Inc., a Utah corporation C.P.C. of Louisiana, Inc., a Louisiana corporation CPC Managed Care Health Services, Inc., a Delaware corporation Community Behavioral Health System, Inc., a Louisiana corp. CPC Properties of Arkansas, Inc., an Arkansas corporation CPC Properties of Indiana, Inc., an Indiana corporation CPC Properties of Kansas, Inc., a Kansas corporation CPC Properties of Louisiana, Inc., a Louisiana corporation CPC Properties of Mississippi, Inc., a Mississippi corporation CPC Properties of North Carolina, Inc., a North Carolina corp. Florida Hospital Properties, a Florida corporation Old Orchard Hospital, Inc., an Illinois corporation Vencor Hospitals Limited Partnership, a Delaware limited partnership Vencor Nursing Centers Limited Partnership, a Delaware limited partnership Vencor Nursing Centers Central Limited Partnership, a Delaware limited partnership Vencor Home Care and Hospice Indiana Partnership, an Indiana general partnership ProData Systems, Inc., an Alabama corporation Stamford Health Associates, L.P., a Connecticut limited partnership Community Psychiatric Centers Properties of Oklahoma, Inc., an Oklahoma corporation Community Psychiatric Centers Properties Incorporated, a California corporation Peachtree - Parkwood Hospital, Inc., a Georgia corporation Vencare Rehab Services, Inc., a Delaware corporation Vencor Nursing Centers Central, L.L.C., a Delaware LLC Vencor Provider Network, Inc., a Delaware corporation Vencor Insurance Holdings, Inc., a Delaware corporation KNOWN NON-DEBTOR AFFILIATES: Vencor Insurance Company, an Indiana corporation Ledgewood Health Care Corporation, a Mass. corporation (50% interest) Cornerstone Insurance Company, a Cayman Islands corporation TheraTx, Incorporated, a Delaware corporation Caribbean Behavioral Health Systems, Inc., a Nev. corp. InteHgro Holdings, Ltd., a Cayman Islands corporation Gorgas International Medical Center, LLC, a Del. LLC Foothill Nursing Company Partnership, a California general partnership (50% interest) Fox Hill Village Partnership, a Massachusetts general partnership (50% interest) Starr Farm Partnership, a Vermont general partnership (50% interest) Hillhaven-MSC Partnership, a California general partnership (50% interest) Pharmaceutical Infusion Therapy, a California general partnership (51% interest) CPS-Sacramento, a California general partnership (60% interest) California Respiratory Care Partnership, a California general partnership (51% interest) Visiting Nurse Advanced Infusion Systems - Anaheim, a California general partnership (50% interest) Visiting Nurse Advanced Infusion Systems - Colton, a California general partnership (51% interest) Visiting Nurse Advanced Infusion Systems - Newbury Park, a California general partnership (51% interest) Northridge Surgery Center, Ltd., a California limited partnership (70% interest) Northridge Surgery Center Development Ltd., a California limited partnership (43% interest) Recovery Inn of Menlo Park, L.P., a California limited partnership (45% interest) Bankruptcy Case Nos.: 99-3199 through 99-3327, inclusive Petition Date: September 13, 1999 Court: United States Bankruptcy Court District of Delaware Marine Midland Plaza Building 824 Market Street Wilmington, Delaware 19801 Judge: Not Yet Assigned Circuit: Third Debtors' Lead Counsel: Thomas J. Moloney, Esq. Cleary, Gottlieb, Steen & Hamilton One Liberty Plaza New York, NY 10006 Telephone 212-225-2000 Fax 212-225-3999 Debtors' Local Counsel: William H. Sudell, Esq. Morris, Nichols, Arsht & Tunnell 1201 North Market Street, 18th Floor Post Office Box 1347 Wilmington, DE 19899-1347 (302) 658-9200 U.S. Trustee: John D. "Jack" McLaughlin, Esq. Office of the United States Trustee Curtis Center, 9th Floor West 901 Walnut Street Philadelphia, PA 19106 (215) 597-4411 Reported Financial Condition as of December 31, 1998: Total Consolidated Assets: $1,717,890,000 Total Consolidated Liabilities $1,402,902,000 -------------------------------------------------------------------------- [00005] LIST OF THE DEBTORS' 20 LARGEST UNSECURED CREDITORS -------------------------------------------------------------------------- Creditor Nature of Claim Amount -------- --------------- ------ The Chase Manhattan Bank Senior Subordinated Notes $300,000,000 Health Care Financing Administration Provider Payment Claim 82,320,059 Services SYSCO Trade Undetermined Gulf South Medical Trade Undetermined Owens & Minor, Inc. Trade Undetermined Mediq, Inc. Trade Undetermined Ross Products Trade Undetermined Bergen Brunswig Trade Undetermined American Pharmaceuticals Trade Undetermined Healthcare Services Group Trade Undetermined Baxter Healthcare Corp. Trade Undetermined Network Services Company Trade Undetermined Boise Cascade Trade Undetermined Puritan Bennett Trade Undetermined EcoLab Trade Undetermined MDI Medical Distribution Trade Undetermined Alaris Medical Systems, Inc. Trade Undetermined Americorp Financial Trade Undetermined GE Capital Fleet Services Trade Undetermined Lanier Professional Services Trade Undetermined -------------------------------------------------------------------------- [00006] DEBTORS' MOTION FOR JOINT ADMINISTRATION OF CASES -------------------------------------------------------------------------- The Debtors have requested, pursuant to Rule 1015(b)(4) of the Federal Rules of Bankruptcy Procedure, that the Court order their chapter 11 cases be jointly administered in order to reduce costs and facilitate a more efficient administrative process, unencumbered by the procedural problems otherwise attendant to the administration of multiple chapter 11 cases. The Court granted the Debtors' Motion, ordering that these cases be administered jointly under Case No. 99-3199 and making it clear that this is for procedural purposes only, neither contemplating nor impairing the right of any party-in-interest to seek a substantive consolidation of the Debtors' estates. -------------------------------------------------------------------------- [00007] VENTAS RESPONDS TO VENCOR'S CHAPTER 11 FILINGS -------------------------------------------------------------------------- LOUISVILLE, Kentucky -- September 13, 1999 -- Ventas, Inc. (NYSE: VTR), the Louisville-based real estate company, today announced that its principal tenant, Vencor, Inc. (OTC: VCRI) filed a petition under Chapter 11 of the U.S. Bankruptcy Code in Wilmington, Delaware. Ventas received approximately 99 percent of its revenues in the year ended December 31, 1998 from Vencor. 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. However, the bankruptcy filing of Vencor and the ultimate resolution of Vencor's obligations could significantly impact Ventas's revenues and its ability to service its indebtedness, including its ability to pay down, refinance, restructure and/or extend a $275 million Bridge Loan due on October 30, 1999, and to make distributions to its stockholders. Ventas intends to publicly disclose additional information as developments in the Vencor bankruptcy proceeding warrant. -------------------------------------------------------------------------- [00008] WHAT HAPPENS TO VENCOR COMMON STOCK & PUBLIC BONDS? -------------------------------------------------------------------------- After a public company files for bankruptcy, its debt and equity securities will continue to trade so long as there's a market (i.e., willing buyers and sellers) for those securities. In the bankruptcy process, there is a hornbook principle known as the absolute priority rule. That principle dictates that unless and until all creditors are paid in full, shareholders do not recover anything from a debtor's estate. In over-the-counter trading, stock in VCRI has fallen to a dime per share from a $5 high during the past year. On May 3, 1999, Vencor announced that it had elected not to make the $14.8 million interest payment then due on the 9 7/8% Guaranteed Senior Subordinated Notes due 2005. Now that the Company has entered the chapter 11 process, it is prohibited from paying pre-petition debts (including the May 3 interest payment) except pursuant to the terms of a plan of reorganization or with the express permission of the Bankruptcy Judge. Bondholders, vendors, service providers, etc., whose claims rank equally, must be treated equally under any plan of reorganization. With this in mind, the Company will not make further interest payments on the 9 7/8% Guaranteed Senior Notes due 2005. The so-called absolute priority rule applies among creditors as well. The general rule dictates that unless and until all senior creditors are paid in full, junior creditors will not realize a recovery from a debtor's estate on account of those junior claims. On Friday, DLS Capital Partners, Inc., a Dallas-based distressed bond trader, indicated that the 9 7/8% Guaranteed Senior Notes due 2005 were trading at 28 to 30 cents-on-the-dollar. *** End of Issue No. 1 ***