Bad timing for this problem to come up given the weaker real estate market. Sale of banking assets improved liquidity of developer family. Having worked in Healthcare finance, regulations are more complex than the IRS rules and as subject to interpretation. Much bigger operators have run into similar problems. Attempt to sell healthcare operations always triggers buyer's due diligence reviews. Due diligence process tries to dig up any potential problems so buyer will not need to deal with them. Normal on healthcare acquisition to question all medicare/medicaid reimbursement filings and look for anything that could be interpreted as subject to challenge. The Morse family got in way over their heads getting into healthcare. The fact that they tried to sell the operation pretty much proves that they were not aware of the issues. It would most likely never have been detected without the due diligence process. Biggest concern right now is a very large bill suddenly due at a time when cashflow from new development is weak.
Existing village operations should be safe as they are organized into resident owned homes and common areas owned by Districts. These entities are legally independent and are not involved in the Healthcare dispute. Potential impact on new development areas where developer cash problems could slow down lot sales/construction and buildout of promised common areas, although new common areas partly shielded by Development District structure. Unlikely to be able to do any new Development District Bonds until everything sorted out since bondholders hate uncertainty.
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