SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 5, 2001
THE MULTICARE COMPANIES, INC.
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(Exact name of Registrant as specified in its charter)
Delaware 34-22090
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(State or other jurisdiction of (Commission File Number)
incorporation or
organization)
101 East State Street
Kennett Square, Pennsylvania 19348
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(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: 610-444-6350
Item 1-4. Not applicable
Item 5. Other Events.
Genesis Health Ventures, Inc. and The Multicare Companies, Inc. filed a joint
plan of reorganization ("the Plan") in the U.S. Bankruptcy Court for the
District of Delaware on June 5, 2001, calling for the merger of the two
companies under the Genesis banner.
The Plan provides that Multicare will become a wholly-owned subsidiary of
Genesis. Genesis currently owns 43.6 % of Multicare and manages its skilled
nursing and assisted living facilities under the Genesis Eldercare brand name.
The confirmation and consummation of the Plan are subject to certain conditions
including the receipt of the requisite acceptances from various creditor classes
to confirm the Plan and the Court's determination that the Plan satisfies the
statutory requirements for confirmation under the bankruptcy code. There can be
no assurance that the Plan as submitted will be confirmed or consummated. The
Plan was endorsed by the steering committees of both companies' senior bank
lenders and the Genesis official committee of unsecured creditors.
The Plan, as filed, provides for the issuance of new notes, new preferred stock
and approximately 96% of the new common stock to the Genesis and Multicare
senior secured creditors and approximately 4% of the new common stock to the
Genesis unsecured creditors. Genesis unsecured creditors will also receive
warrants to purchase approximately 5.8% of the new common stock. Multicare
vendors will also receive a small percentage of the new common stock. Existing
holders of Genesis preferred stock and Genesis and Multicare common stock would
receive no distribution under the Plan. Genesis plans to register the new common
stock for trading on a public exchange at a future date.
The following charts, "Treatment of Genesis Creditors and Shareholders" and
"Treatment of Multicare Creditors and Shareholders", are from the Disclosure
Statement for Debtors' Joint Plan of Reorganization. The charts do not purport
to be complete and are qualified in their entirety by reference to all of the
provisions of the Plan, including all exhibits and documents described therein,
as filed with the Bankruptcy Court and as may otherwise be amended or
supplemented.
1
Treatment of Genesis Creditors and Shareholders:
Class Description Treatment Entitled to
Vote
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- -- Debtor in Possession Credit Payment of all amounts No
Agreement Claims outstanding, and cash
collateralization or replacement of
outstanding letters of credit by
letters of credit issued under the
exit facility.
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- -- Other Administrative Expense Paid in full. No
Claims
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- -- Priority Tax Claims Paid in full or with interest No
over a period not to exceed six
(6) years from the date of
assessment of the tax.
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G1 Genesis Other Secured Claims See separate description below. See below
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G2 Genesis Senior Lender Claims $195,979,000 in cash* Yes
$99,923,000 in New Senior Notes
$31,000,000 in New Convertible
Preferred Stock
74.58% of the New Common Stock.
* cash payments through June 30,
2001
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G3 Genesis Priority Non-Tax Claims Paid in full. No
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G4 Genesis General Unsecured Claims Uninsured claims: Yes
0.67% of the New Common Stock
17.25% of the New Warrants.
Insured claims:
Paid in ordinary course of
business from insurance proceeds
to the extent of such insurance;
any portion of such claims which
are not covered by insurance
will be treated in same manner
as uninsured claims.
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G5 Genesis Senior Subordinated Note 3.22% of the New Common Stock Yes
Claims 82.75% of the New Warrants.
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G6 Genesis Intercompany Claims Unimpaired. No
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G7 Genesis Punitive Damage Claims No distribution (except to the No
extent covered by insurance).
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G8 Genesis Series G Preferred Stock No distribution. No
Interests
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G9 Genesis Series H Preferred Stock No distribution. No
Interests
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2
Class Description Treatment Entitled to
Vote
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G10 Genesis Series I Preferred Stock No distribution. No
Interests
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G11 Genesis Common Stock Interests No distribution. No
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Treatment of Genesis Other Secured Claims Subclasses:
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Description Entitled
Class Collateral (lender or guarantor) Treatment to Vote
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G1-1 Broad Street Office Building $1,600,000 mortgage reinstated No
148 West State Street, Kennett
Square, Pa. (Pa. IDA)
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G1-2 Broad Street Office Building $985,039 mortgage reinstated No
148 West State Street, Kennett
Square, Pa. (Pa. IDA)
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G1-3 Pleasant View Center (HUD) $8,864,446 mortgage reinstated No
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G1-4 Country Village Center (HUD) $1,810,259 mortgage reinstated No
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G1-5 Abington Manor (Lackawanna County $3,475,000 mortgage reinstated No
IDA)
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G1-6 Silver Lake Center (Del. EDA Bonds) $2,155,000 mortgage reinstated No
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G1-7 River Street Center (Luzerne $2,430,000 mortgage reinstated No
County IDA)
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G1-8 Kresson View Center (NJEDA $5,535,000 mortgage reinstated No
Refunding Bonds)
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G1-9 Mifflin Court (ElderTrust) $2,474,000 mortgage reinstated (as No
previously reduced and approved by
the Bankruptcy Court)
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G1-10 Oaks Center (ElderTrust) $3,500,086 mortgage reinstated (as No
previously reduced and approved by
the Bankruptcy Court)
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G1-11 Coquina Assisted Living $1,400,000 mortgage reinstated (as No
(ElderTrust) previously reduced and approved by
the Bankruptcy Court)
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G1-12 Homestead Center $19,325,829 mortgage reinstated No
Kimberly Hall South Center
Kimberly Hall North Center
Seaford Center
Milford Center
Windsor Center
(U.S. Bank, N.A., as trustee for
the "Bradford Bonds")
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G1-13 Brakeley Park Center (HUD) New secured note maturing on Yes
January 1, 2033, in $7,985,079
principal amount with annual
interest at 8.5% and level monthly
payments of principal and interest
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3
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Description Entitled
Class Collateral (lender or guarantor) Treatment to Vote
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G1-14 North Cape Center (HUD) New secured note maturing on March Yes
1, 2036, in $5,573,020 principal
amount with annual interest at
8.0% and level monthly payments of
principal and interest
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G1-15 Oak Hill Center (HUD) Return the collateral Yes
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G1-16 Rittenhouse Pine Center (Meditrust) New secured 10 year note in Yes
$5,000,000 principal amount with
annual interest at 8% and level
monthly payments of principal and
interest based on a 25-year
amortization schedule (unsecured
deficiency of $1,690,441)
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G1-17 Atlantis Center New secured 5-1/2 year note in Yes
Bowmans Center $45,000,000 principal amount with
Fairway Center annual interest at LIBOR plus 3.5%
Oakwood Center and no amortization before
Riverwood Center maturity (secured deficiency of
Tierra Center $33,236,000)
Willimsburg Center
Windham Center
Woodmont Center
(synthetic lease lenders)
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In addition to subclasses G1-1 through G1-17, there are other subclasses of
miscellaneous secured claims of approximately $3,536,000 against the Genesis
Debtors, each of which will be treated as a separate class. This class also
includes certain contingent claims of Bank of America, N.A. in connection with a
guaranty by Genesis of the obligations of the Age Institute. Under the Plan of
Reorganization, either these claims will be reinstated or the Reorganized
Debtors will return the property securing such claim. These claims are not
impaired and the holders are not entitled to vote to accept or reject the Plan
of Reorganization.
4
Treatment of Multicare Creditors and Shareholders:
Class Description Treatment Entitled to
Vote
- ----- --------------------------------- ---------------------------------- --------------
- -- Debtor in Possession Credit Payment of all amounts No
Agreement Claims outstanding, and cash
collateralization or replacement of
outstanding letters of credit by
letters of credit issued under the
exit facility.
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- -- Other Administrative Expense Claims Paid in full. No
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- -- Priority Tax Claims Paid in full or with interest No
over a period not to exceed six
(6) years from the date of
assessment of the tax.
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M1 Multicare Other Secured Claims See separate descriptions below. See below
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M2 Multicare Senior Lender Claims $25,000,000 in cash Yes
$146,146,000 in New Senior Notes
$11,600,000 in New Conv Preferred
Stock 21.35% of the New Common
Stock.
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M3 Multicare Priority Non-Tax Claims Paid in full. No
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M4 Multicare General Unsecured Uninsured: Yes
Claims 0.18% of the New Common Stock.
Insured: Paid in ordinary course of
business from insurance proceeds to
the extent of such insurance; any
portion of such claims which are
not covered by insurance will be
treated in same manner as uninsured
claims.
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M5 Multicare Senior Subordinated No distribution. No
Note Claims
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M6 Multicare Intercompany Claims Unimpaired. No
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M7 Multicare Punitive Damage Claims No distribution (except to the No
extent covered by insurance).
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M8 Multicare Common Stock Interests No distribution. No
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5
Treatment of Multicare Other Secured Claims Subclasses:
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Class Description Entitled
Collateral (lender or guarantor) Treatment to Vote
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M1-1 Rosewood Center (Tyler County, WV) $825,000 mortgage reinstated No
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M1-2 Sisterville Center (Tyler County, WV) $1,960,000 mortgage reinstated No
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M1-3 Raleigh Center (WV Hospital $1,840,000 mortgage bonds reinstated No
Authority)
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M1-4 Westford Center (HUD) $6,637,992 mortgage reinstated No
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M1-5 Willows Center $11,900,815 mortgage reinstated No
Cedar Ridge Center
Dawn View Center
(MediTrust)
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M1-6 Teays Valley (West Virginia Hospital $3,665,000 mortgage reinstated No
Authority)
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M1-7 Point Pleasant (Mason County WV) Return of collateral Yes
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In addition to subclasses M1-1 through M1-7, there are other subclasses of
miscellaneous secured claims of approximately $71,000 against the Multicare
Debtors, each of which will be treated as a separate class. Under the Plan of
Reorganization, either these claims will be reinstated or the Reorganized
Debtors will return the property securing such claim. These claims are not
impaired, and the holders are not entitled to vote to accept or reject the Plan
of Reorganization.
Statements made in this, and in our other public filings and releases, which are
not historical facts contain "forward-looking" statements (as defined in the
Private Securities Litigation Reform Act of 1995) that involve risks and
uncertainties and are subject to change at any time. These forward-looking
statements may include, but are not limited to statements containing words such
as "anticipate," "believe," "plan," "estimate," "expect," "intend," "may" and
similar expressions. Factors that could cause actual results to differ
materially include, but are not limited to, the following: our bankruptcy cases
and our ability to continue as a going concern; risks associated with operating
a business in Chapter 11; the delays or the inability to complete and/or
consummate our plan of reorganization; our ability to comply with the provisions
of our debtor-in-possession financing; our substantial indebtedness and
significant debt service obligations; our default under our senior credit
agreement and our senior subordinated and other notes; adverse actions which may
be taken by creditors; adverse developments with respect to our liquidity or
results of operations; the effect of planned dispositions of assets; our ability
to consummate or complete development projects or to profitably operate or
successfully integrate enterprises into our other operations; our ability or
inability to secure the capital and the related cost of the capital necessary to
fund future growth; our ability to attract customers given our current financial
position; our ability to attract and retain key executives and other personnel;
the impact of health care reform, including the Medicare Prospective Payment
6
System ("PPS"), the Balanced Budget Refinement Act ("BBRA") and the Benefit
Improvement and Protection Act of 2000 ("BIPA") and the adoption of cost
containment measures by the federal and state governments; the impact of
government regulation, including our ability to operate in a heavily regulated
environment and to satisfy regulatory authorities; the occurrence of changes in
the mix of payment sources utilized by customers to pay for services; the
adoption of cost containment measures by other third party payors; competition
in our industry; and changes in general economic conditions.
The forward-looking statements involve known and unknown risks, uncertainties
and other factors that are, in some cases, beyond our control. We caution
investors that any forward-looking statements made by us are not guarantees of
future performance. We disclaim 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.
7
Item 7. Financial Statements and Exhibits.
(a) Financial Statements
None.
(b) Pro Forma Financial Information
None.
(c) Exhibits
2.1 (1) Disclosure Statement for Debtors' Joint Plan of
Reorganization.
2.2 (1) Debtors' Joint Plan of Reorganization under Chapter
11 of the Bankruptcy Code.
99.1 Press release dated June 5, 2001.
(1) Incorporated by reference to Genesis Health Ventures,
Inc.'s Current Report on Form 8-K dated June 5, 2001.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE MULTICARE COMPANIES, INC.
By:
/s/ George V. Hager, Jr.
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George V. Hager, Jr.
Executive Vice President and
Chief Financial Officer
Date: June 19, 2001