Despite the increasing challenges, financially troubled health care organizations can be repositioned toward long-term sustainability. In many communities, health care organizations are major contributors to the local economy and often the largest employers. Everyone has personal connections to them through the people who work there and the people who receive care, and communities can be highly incentivized to do the work necessary to save their local hospital or nursing home.

Leases involving residential real property are governed by Bankruptcy Code § 365(d)(2), while leases of nonresidential real property are subject to § 365(d)(3) and (3)(4). Section 365(d)(4) provides a debtor-lessee with 210 days in which to assume or reject an unexpired lease of nonresidential real property, plus a potential additional 90 days, which the court can order for cause. Thereafter, there can be no further extension without the lessor’s consent. If the debtor takes no action, such lease will be deemed rejected.

Thank you for saying that. I think there are a bunch of things that play into continuing care retirement communities (CCRCs), and really any health care company. There really are a few things that I think are unique to health care that make for success. One thing is, you really have to plan in advance, because these cases have to go quickly; they don’t get better with age. You need the confidence of people that if they enter that the organization is going to survive. So, you really have to spend time thinking about what can be done and how to get there very quickly. You have to think ahead.