KINDRED HEALTHCARE AND VENTAS ENTER STIPULATION TEMPORARILY ENJOINING VENTAS FROM TAKING ANY ACTION ADVERSE TO KINDRED’S INTERESTS RELATED TO PURPORTED MASTER LEASE DEFAULT
Louisville, KY (June 20, 2006) – Kindred Healthcare, Inc. (“Kindred”) (NYSE:KND) today announced that it has entered into a stipulation (the “Stipulation”) with Ventas Realty, Limited Partnership, Inc. (“Ventas”) that prevents Ventas, at least until the court hears Kindred’s motion for a preliminary injunction, from taking any action adverse to Kindred’s interests based upon Ventas’ assertion that it is entitled to receive Kindred’s fair market rental appraisals prepared for the rent reset process. The Stipulation also extends any operative cure periods until the earlier of three business days after the entry of a ruling by the court on Kindred’s motion for injunctive relief or July 20, 2006. Today, the court set a hearing for June 29, 2006 on Kindred’s request for a preliminary injunction continuing to prevent Ventas from misreading the Master Lease Agreements and demanding delivery of Kindred’s appraisals prepared exclusively as Kindred’s work product for the rent reset process.
Paul J. Diaz, President and Chief Executive Officer of Kindred commented, “We are pleased that we have effectively enjoined Ventas from trying to extract our work product prepared for the rent reset process. We believe that the Master Lease Agreements do not require us to turn over these appraisals prepared for this purpose and look forward to making our case to the court at the June 29 hearing.
“As we continue to move forward with the rent reset process, we also look forward to sharing our views and data with the final appraiser under each of the Master Lease Agreements. We continue to believe that our analyses and transaction data, including our appraisals, support our view that both the existing aggregate rents and the 3½% annual rent escalator under the Master Lease Agreements are already well above market. As we have previously stated, we are comfortable with the appraisal procedure set forth in the Master Lease Agreements, including the final appraiser’s discretion to determine what, if any, information should be shared between the parties on this issue.”
As previously announced, Kindred’s complaint asserts that Ventas is deliberately attempting to circumvent the applicable provisions of the Master Lease Agreements, and is usurping the authority of the soon to be appointed final appraiser under each of the Master Lease Agreements, by misinterpreting the Master Lease Agreements so as to provide Ventas with unfettered access to Kindred’s analyses of the fair market rental of the leased properties.
This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements regarding Kindred’s expected future financial position, results of operations, cash flows, financing plans, business strategy, budgets, capital expenditures, competitive positions, growth opportunities, plans and objectives of management and statements containing the words such as “anticipate,” “approximate,” “believe,” “plan,” “estimate,” “expect,” “project,” “could,” “should,” “will,” “intend,” “may” and other similar expressions, are forward-looking statements.
Such forward-looking statements are inherently uncertain, and stockholders
and other potential investors must recognize that actual results may differ
materially from Kindred’s expectations as a result of a variety
of factors, including, without limitation, those discussed below. Such
forward-looking statements are based on management’s current expectations
and include known and unknown risks, uncertainties and other factors,
many of which Kindred is unable to predict or control, that may cause
Kindred’s actual results or performance to differ materially from
any future results or performance expressed or implied by such forward-looking
statements. These statements involve risks, uncertainties and other factors
discussed below and detailed from time to time in Kindred’s filings
with the Securities and Exchange Commission.
In addition to the factors set forth above, other factors that may affect
Kindred’s plans or results include, without limitation, (a) Kindred’s
ability to operate pursuant to the terms of its debt obligations and its
Master Lease Agreements with Ventas; (b) the risks and uncertainties related
to the rent reset process, including the appraisal process, pursuant to
the Master Lease Agreements; (c) the risks and uncertainties in any court
proceeding, including the risk that the court in the action presently
pending will not render a timely or favorable decision; (d) Kindred’s
ability to meet its rental and debt service obligations; (e) adverse developments
with respect to Kindred’s results of operations or liquidity; (f)
Kindred’s ability to attract and retain key executives and other
healthcare personnel; (g) increased operating costs due to shortages in
qualified nurses, therapists and other healthcare personnel; (h) the effects
of healthcare reform and government regulations, interpretation of regulations
and changes in the nature and enforcement of regulations governing the
healthcare industry; (i) changes in the reimbursement rates or methods
of payment from third party payors, including the Medicare and Medicaid
programs, changes arising from the Medicare prospective payment system
for long-term acute care hospitals, including the recently announced final
Medicare payment rules, the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003, and changes in Medicare and Medicaid reimbursement
for Kindred’s nursing centers; (j) national and regional economic
conditions, including their effect on the availability and cost of labor,
materials and other services; (k) Kindred’s ability to control costs,
including labor and employee benefit costs; (l) Kindred’s ability
to successfully pursue its development activities and successfully integrate
new operations, including the realization of anticipated revenues, economies
of scale, cost savings and productivity gains associated with such operations;
(m) the increase in the costs of defending and insuring against alleged
professional liability claims and Kindred’s ability to predict the
estimated costs related to such claims; (n) Kindred’s ability to
successfully reduce (by divestiture of operations or otherwise) its exposure
to professional liability claims; (o) Kindred’s ability to successfully
dispose of unprofitable facilities; and (p) Kindred’s ability to
ensure and maintain an effective system of internal controls over financial
reporting. Many of these factors are beyond Kindred’s control. Kindred
cautions investors that any forward-looking statements made by Kindred
are not guarantees of future performance. Kindred disclaims any obligation
to update any such factors or to announce publicly the results of any
revisions to any of the forward-looking statements to reflect future events
or developments.
Kindred Healthcare, Inc. through its subsidiaries operates hospitals, nursing centers, institutional pharmacies and a contract rehabilitation services business across the United States.
CONTACT:
Richard A. Lechleiter
Executive Vice President and Chief Financial Officer
(502) 596-7734
