GREENERY REHABILITATION GROUP ANNOUNCES WITHDRAWAL FROM INVESTMENT IN HEALTHCARE INTERNATIONAL, INC.
NEWTON, Mass., April 23 /PRNewswire/ -- Greenery Rehabilitation Group, Inc. (NYSE: GRG) today announced that it has entered into a series of agreements with Healthvest (AMEX: HVT) which, if and when consummated, will result in GRG withdrawing from management of Healthcare International, Inc. (HIICA) and from sponsorship of plans of reorganization for HIICA and its subsidiaries. HIICA is an operator of psychiatric and rehabilitation hospitals. Most of HIICA's hospitals are leased from or mortgage financed by HVT, a real estate investment trust formed by HIICA in 1986. In 1989, HIICA experienced financial difficulties and defaulted on all of its obligations to HVT. At that time GRG invested about $9.5 million in HIICA and announced plans to work with HIICA to restructure HIICA's obligations. In 1991, out of court negotiations by HIICA failed, and HIICA filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code. In June 1992, after contested litigation in the HIICA bankruptcy, GRG assumed operating control of HIICA and elected two of HIICA's three directors. During the past several months, GRG and HVT have sponsored competing plans to reorganize HIICA. Under the GRG plans, GRG would invest about $22 million (including the approximately $9 million currently invested in HIICA) to acquire the six remaining hospitals now operated by subsidiaries of HIICA, and the balance of HIICA would be liquidated with the proceeds distributed to creditors. Under the HVT plan, HVT would be merged into HIICA, and HVT current shareholders would receive about 96 percent of the combined company, while HIICA subordinated bondholders would receive about 4 percent, and other creditors would be paid various amounts. An agreement between GRG and HVT was announced earlier today during a hearing in HIICA's proceedings in the U.S. Bankruptcy Court for the Western District of Texas in Austin, Texas. Under the terms of the agreement, HVT would acquire GRG's controlling interest in and claims against HIICA in return for consideration valued at least at the GRG investment. The agreement between GRG and HVT is contingent upon various matters, including approval of the Bankruptcy Court supervising HIICA's reorganization and approval by HVT's senior secured creditors, who are owed about $216 million. Additional details of the proposed agreement are expected to be filed in the Bankruptcy Court within the next few days, and hearing for Court approval has been scheduled for May 10, 1993. A spokesman for GRG said that its primary motivation for the settlement was the desire to give one party a clear tract to get a HIICA reorganization completed. The GRG spokesman emphasized that, if the settlement is not approved because of disapproval by HVT's lenders or otherwise, GRG intends to vigorously pursue its efforts to consummate its own version of a HIICA reorganization as rapidly as possible. GRG is headquartered in Newton, Mass. GRG operated 21 rehabilitation and nursing facilities providing nursing care and a variety of sub-acute specialty services. -0- 4/23/93 /CONTACT: Gerard M. Martin, chairman, or George M. Ferencik, president, both of Greenery, 617-244-4744/ (GRG, HVT)
CO: Greenery Rehabilitation Group, Healthvest, Healthcare International ST: Massachusetts IN: HEA SU:
DJ -- NE004 -- 0039 04/23/93 12:10 EDT
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|Date:||Apr 23, 1993|
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