Adeptus Health’s (AHI) official committee of equity security holders filed with the U.S. Bankruptcy Court an emergency motion to appoint a Chapter 11 trustee, appointing an examiner and terminating the Debtors’ exclusivity period.
The motion explains, “Stated simply, the Equity Committee firmly believes that the appointment of a Chapter 11 trustee to act as an independent fiduciary for AHI’s stakeholders and prevent AHI’s currently conflicted Board of Directors and management from further squandering AHI’s assets for the primary benefit of Deerfield is both necessary and proper and fully supported by the evidence….The Equity Committee is prepared to propose a plan solely with respect to AHI (one of the 140 Debtors in these jointly administered Chapter 11 Cases) that maximizes value for the AHI estate and affords substantial cash recoveries to the innocent trade creditors, while ensuring that these Chapter 11 Cases move forward in a productive manner….The Equity Committee requires an honest broker working on behalf of AHI’s estate for any such plan to have a reasonable opportunity of moving forward. To be clear, the Equity Committee seeks appointment of a trustee only with respect to the Chapter 11 estate of AHI, and not with respect to the 139 other Debtor estates.”
In addition, “Further, the Board/management has completely ceded control of these cases to Deerfield….Appointment of a trustee is now essential as the Debtors appear to have completely lost sight of their fiduciary responsibilities to the Debtors’ estates on a one-off basis. The Debtors have surrendered their impartiality and independence in favor of allowing the outcome and timing of these Chapter 11 Cases to be dictated by Deerfield. Alternatively, an independent examiner should be appointed….An independent examiner would be able to conduct an investigation into Deerfield’s control over the Debtors, including AHI, and mitigate the lack of transparency that has infected these matters to date.” The equity committee is also seeking expedited consideration of this emergency motion.
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