The U.S. Trustee assigned to the Adeptus Health case filed with the U.S. Bankruptcy Court an objection to the Company’s motion to approve Plan modifications, allow the Debtors to file a Third Amended Plan and schedule a confirmation hearing and related deadlines.
The Trustee asserts, “The Third Amended Plan contains a modification materially adverse to the general unsecured creditors of Adeptus Health, including a class skipping gift from Deerfield Management Company, to the constituency of the Official Committee of Equity Security Holders, which may violate the Absolute Priority Rule. For this reason, creditors adversely affected should receive full notice and opportunity to object and vote in accordance with 11 U.S.C. section 1127 and Fed. R. Bankr. P. 3019. A confirmation hearing of September 26, 2017, with an objection and voting deadline of September 20, 2017 is too short.”
In addition, “Moreover, nothing in the Motion to Modify or the Third Amended Plan addresses the relevant case law under Rule 9019 or describes the ‘why’ of the settlement. The ‘how’ of the settlement appears in Section 5.15 and 5.16 of the Third Amended Plan, and includes an opt out of the settlement. Parties, however, may be hard pressed to determine whether to opt out of a settlement that is not fully described.”
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