Saturday, July 29, 2017

Line Formed to Influence Toad

Strange Tony,

Kindred Vice President Toad visited our hospice site recently.  He set up in a conference room and invited staff to meet with him in one on one sessions.  The line formed on the sign up sheet with its half hour increments, which our office manager guarded as if it were gold bars from Fort Knox.  Management added a special partition to enable confidential entry and egress for staff.

Years ago Toad would have had no takers.  Back then staff knew better than to give bad leaders any information that could be used, twisted, or distorted to harm fellow employees.  That wisdom is long gone, replaced by an egotistic, self serving sickness which likely will be terminal for our hospice if it persists long enough.

One does not rise by stepping on the heads of co-workers.  Fellow employees sink under the feet of those under the illusion they benefit from divisive and unproductive behavior.  The tragedy is corporate management who listens to one side of any story and decides to act.   In such cases the race is to be the first one heard.  That race unfolded with Toad's open door sessions (which always occurred behind a closed door).

It is such a management basic to hear multiple sides of a story to learn what happened and develop strategies to address the issue.  Kindred, and Gentiva before it, ignore this simple dictum.

Executive Toad will do something with the myriad of misinformation made available to him by those who pretend to be victims in their perpetration.  If he's like the executive line before him Toad will support the lazy and unethical who point fingers elsewhere so they won't be found out.  He might even hit on our attractive staff as did a former HR VP, who professed to being happily married.

It is astounding how much incompetence, silliness and unprofessional behavior they willingly overlook.  Yet, management writes up the smallest transgression from hard working, patient focused staff who purposely protect themselves from untrustworthy management.

Kindred executives do not have eyes to see and ears to hear.  They have partial stories, often distorted beyond recognition.  These fictions stimulate executive adrenaline and vengeance as those coming up short under the micromanagement microscope must be punished.

Will Toad overlook the burning forest of conflict at our hospice site, doing the bidding of those who ignited and continually stoke the fires?  I'll wager he's at the head of the fire hose following instructions from the crew that ran to him first.  It's been the Kindred way to burn the innocent at the bidding of the arsonist. I expect Toad to follow this deeply entrenched pattern.

Anonymous (from Kindredwarts)

Sunday, July 2, 2017

Kindred Dumps Nursing Homes for Huge Loss


Strange Tony,

Kindred announced the sale of their nursing home division late Friday.  Kindred's press release revealed details of the deal:

Kindred Healthcare, Inc. (“Kindred” or the “Company”) (KND) today announced that it has signed a definitive agreement with BM Eagle Holdings, LLC, a joint venture led by affiliates of BlueMountain Capital Management, LLC (“BlueMountain”), under which it will sell the Company’s skilled nursing facility business for $700 million in cash. The sale includes 89 nursing centers with 11,308 licensed beds and seven assisted living facilities with 380 licensed beds, which collectively have approximately 11,500 employees in 18 states. 

Kindred is closing the door on it's initial mission by selling its nursing homes.  Ventas spun off its nursing home operating division into Kindred via an initial public offering in 1998.  Kindred already agreed to pay Ventas $700 million for 36 leased nursing homes.  Ventas press release clarified:

The sale price of $700 million represents a seven percent cash yield on current annual cash rent of $50 million and an eight percent GAAP yield. The difference in yield represents the annual portion of the amortization of $23 million in cash fees Ventas previously received from Kindred. Upon the sale of the SNFs, Ventas is expected to record a gain exceeding $600 million.

Effectively Kindred will take the $700 million from BlueMountain Capital and pass it directly to Ventas.  For BM Eagle Holdings it's buy 36 Ventas nursing homes get the rest for free.

There's a huge disconnect inside this deal.  Ventas owned nursing homes sold at a huge premium and Kindred gave away the physical assets of 25 nursing homes and 3 ALF's.

Kindred's big win comes from "the creation of an approximately $380 million net operating loss carryforward associated with the sale transaction."  That will generate "approximately $140 million of cash tax benefit over time."  The two other wins are simply holding onto stuff the company already owns, working capital and a "retained Las Vegas facility, hospital-based sub-acute units and other retained assets." 

Kindred's stock has been on fire lately.  I wonder what it will do after the market digests the nursing home fire sale that disproportionately enriches Kindred's former owner..

I do worry about the 11,500 Kindred employees going to BM Eagle Holdings.  In the hospice world Kindred pay has been stagnant as benefits deteriorated.  How much worse might these employees fare under private equity ownership?

The deal is expected to close in two stages but should be completed this year.  Kindred CEO Ben Breier will get how big a bonus?  Whatever amount the board awards for this deal should be split 11,500 ways and mailed across 18 states.  Employees should get something for being sold out.  Ben Breier and Stephen Farber should get nothing for turning their back on Kindred's original mission.  Other divisions should know we're disposable as well.  Executives could turn on us at any time.

Anonymous  (from a saleable division in executive enriching Kindred)