Investments in Loans

9 Months Ended

Sep. 30, 2011

Investments in Loans [Abstract]

Investments in Loans

Note 4 — Investments in Loans

     As of September 30, 2011 and December 31, 2010, we maintained our loan investment of approximately $6.3 million and $8.6 million, respectively. The face value of the loan investment at September 30, 2011 and December 31, 2010 was $10.7 million and $12.9 million, respectively. Prior to September 30, 2010, we carried our loan investments at LOCOM. Our intent is to hold our remaining loan investment to maturity, and therefore we have reflected this loan at its adjusted cost basis, subject to impairment, on the September 30, 2011 and December 31, 2010 balance sheets. The principal amortization portion of payments received is applied to the carrying value of the loan.

     Our loan investments have historically included senior loans and participations secured primarily by real estate and other collateral in the form of pledges of ownership interests, direct liens or other security interests and have been in various geographic markets in the United States. Our remaining loan investment at September 30, 2011 and December 31, 2010, in which we are a one-third participant in a term loan credit facility, is a variable rate loan that was originally scheduled to mature on February 1, 2011. Negotiations to restructure the loan have been ongoing since its initial maturity date and as part of these discussions, the term loan credit facility and related revolving loan credit facility have been extended several times, most recently until October 28, 2011. During the course of negotiations for a potential restructuring of the credit facilities, certain borrowers under the credit facilities and certain related party entities filed a lawsuit in which the direct lenders and certain related parties (not including the Company) in the credit facilities were named. While Care is not named in the lawsuit, the Company may have certain indemnification obligations to one of the named syndicated lenders (See Note 12 to the Condensed Consolidated Financial Statements). As part of an earlier extension of the credit facilities, the borrowers agreed to continue to make timely payments of scheduled principal and interest, and agreed that default interest due on the credit facilities would contractually accrue and not be payable currently. Accordingly amounts attributable to default interest shall not be recognized until received. In addition, in February 2011, the lender consortium agreed to liquidate an existing capital expense reserve account. The Company’s share of this reserve was approximately $1.0 million, which we received in February 2011 and treated as a partial principal paydown. In addition, two (2) properties securing the credit facilities were sold in September and October of 2011. We received two (2) payments of approximately $0.5 million in each month, respectively, from the proceeds of the sales, which were treated as partial principal paydowns.

     The lender consortium and the borrowers continue to have negotiations surrounding a potential restructuring of the credit facilities. There can be no assurances regarding the terms or timing or outcome of a potential restructuring of the credit facilities. The Company continues to monitor the status of the credit facilities.

						Blended
			Cost			Base
	Location		Basis			Interest			Maturity
Collateral Type	City	State	(millions)			Rate (1)			Date (2)
September 30, 2011
Senior Nursing Facilities/ Senior Apartments/Assisted Living Facilities	Various	Louisiana	$	6.3			L+4.00	%		10/28/11
Investments in Loans			$	6.3
December 31, 2010
Senior Nursing Facilities/ Senior Apartments/Assisted Living Facilities	Various	Texas/Louisiana	$	9.0			L+4.06	%		2/21/11
Unrealized Loss on Investments				(0.4	)
Investments in Loans			$	8.6

(1)

Does not include default interest rate.

(2)

The original maturity date was February 1, 2011, which was initially extended to February 21, 2011 and has been subsequently extended to October 28, 2011. The lender consortium and the borrowers continue to have negotiations surrounding a potential restructuring of the credit facilities. There can be no assurances regarding the terms or timing or outcome of a restructuring of the credit facilities.