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Formation Capital Calls Off Deal to Buy Haven Healthcare Chain
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A deal to sell the troubled Haven Healthcare nursing home chain has fallen through, just weeks after it was announced.

Middletown based Haven Healthcare, which owns fifteen homes in Connecticut and ten others around New England filed for bankruptcy last year after a scandal involving financial mismanagement and poor patient care standards. Earlier this month, state officials announced that the chain would be sold completely to Formation Capital, the owner of Genesis Healthcare, which runs other homes in Connecticut. But now Formation has pulled out of the $85 million deal, without an explanation. Attorney General Richard Blumenthal says he’s disappointed, but there is a contingency plan.

"We have a plan that we prepared for exactly this possibility. And it will provide for the current secured creditors to take over these homes, manage them through experienced credible operators, stabilize finances, and most important provide quality care and protect patients and residents."

The present management would be removed, and the homes taken over by three companies that financed Haven: CapitalSource, Nationwide and Omega Healthcare Investors. Each would then decide whether to sell on the facilities they inherit or continue to manage them. It’s hoped this secondary plan will keep the Haven homes out of state receivership.