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):
January 12, 2009
NATIONAL HEALTH INVESTORS, INC.
(Exact name of registrant as specified in its charter)
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Maryland
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001-10822
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62-1470956 |
(State or other jurisdiction
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(Commission
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(IRS Employer |
of incorporation)
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File Number)
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Identification No.) |
750-B South Church Street
Murfreesboro, TN 37130
(Address of principal executive offices)
(615) 890-9100
(Registrants telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 8.01. Other Events.
National Health Investors, Inc. (NHI) has received notice that on December 30, 2008, Care
Foundation of America, Inc. (CFA), an NHI borrower, filed for Chapter 11 bankruptcy in the United
States District Court for the Middle District of Tennessee (Case No. 08-12367). On January 2,
2009, CFA filed an adversary proceeding complaint against NHI in the bankruptcy case. NHI had
previously disclosed that CFA had threatened to file such a lawsuit.
As previously disclosed, NHI sold to CFA, a Tennessee not-for-profit corporation, six Florida
nursing homes on January 1, 2000. NHI had purchased the homes from the Chapter 11 bankruptcy
trustee for York Hannover Nursing Centers, Inc., which had previously acquired the homes for $33.6
million. NHI financed 100% of CFAs $32.7 million purchase price with a note originally due July
31, 2001. CFA and NHI have agreed to extend the maturity date of CFAs debt several times over the
years, with the most recent extension making the balance due December 31, 2008. The current
balance of the debt is approximately $23.2 million.
The Florida homes have been leased to a third party that has operated the homes over the nine years
since CFA acquired them. CFA has successfully made its monthly debt payments through 2008 and
recently indicated that it believes the homes are worth substantially more than the $32.7 million
purchase price, and far more than the balance of CFAs debt. CFAs bankruptcy filings indicate
that CFA has almost no debt, other than the loan from NHI, and that its assets are estimated to be
worth between $50 million and $100 million. NHI believes the six Florida homes are CFAs only
assets.
CFAs complaint alleges that NHI exercised total dominion and control over CFAs board of directors
from 1999 until sometime in 2008 and that NHI used that control to cause CFA to buy and finance the
six Florida homes on terms that were not fair to CFA. CFA also alleges that these transactions
constituted excess benefit transactions as defined in Section 4958 of the Internal Revenue Code.
As part of its complaint, CFA seeks a declaratory judgment and asserts claims for breach of
fiduciary duty, fraud, conversion, and unjust enrichment. CFA claims that it has sustained
compensatory and punitive damages in excess of $25 million.
NHI adamantly denies CFAs claims and intends to vigorously defend against CFAs complaint.
NHI contends, among other things, that CFA has never been under the control and dominion of NHI and
that the terms on which CFA acquired and financed the homes were both commercially reasonable and
fair to CFA. NHI has consistently worked with CFA over the years, as shown by the various
extensions of CFAs note, and was seeking to resolve its current dispute with CFA at the time CFA
filed for bankruptcy.
NHI has also been served with a Civil Investigative Demand by the Office of the Tennessee Attorney
General, which has indicated that it is investigating transactions between NHI and three
not-for-profit corporations, including CFA. At this time, NHI does not know whether the Tennessee
Attorney Generals office will commence any legal proceedings or, if so, what relief would be
sought.
An unfavorable outcome in the litigation with CFA or in any IRS proceeding that could arise from
CFAs claims could have a material adverse effect on NHI.
SIGNATURE
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 thereunto duly authorized.
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NATIONAL HEALTH INVESTORS, INC. |
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By:
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/s/ W. Andrew Adams |
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Name:
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W. Andrew Adams |
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Title:
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President and CEO |
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Date: January 12, 2009 |
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