Adeptus Health filed with the U.S. Bankruptcy Court a Joint Plan of Reorganization and related Disclosure Statement.
According to the Adeptus Health disclosure statement, “Pursuant to the Plan, the Debtors will establish a Litigation Trust to investigate and pursue Causes of Action transferred to the Litigation Trust and to distribute the proceeds of any recovery thereupon. The Deerfield Parties will provide initial funding of $750,000 to the Litigation Trust (the ‘Litigation Trust Initial Funding’) and shall have the option to provide additional funding in its sole and absolute discretion. The Deerfield Parties will be repaid the Litigation Trust Initial Funding in full plus interest thereon at 10% per annum from any proceeds of the Litigation Trust. The Liquidating Trust Trustee shall investigate and purse Causes of Action. Holders of Lease Rejection Claims, Medical Malpractice Claims, and General Unsecured Claims will be paid from the proceeds of the Litigation Trust after the Deerfield Trust Repayment Distributions are paid, as described above. Additionally, the Debtors have in place insurance policies with $50 million dollars in total limits that cover certain actions against directors and officers (the “D&O Policies”). The D&O Policies are “claims made” policies and include $40 million in ABC coverage and $10 million in Side A DIC coverage….The Plan contemplates paying Administrative Expense Claims, Fee Claims, and Priority Tax Claims in full. The Guarantors under the Prepetition Credit Facility and certain other Debtors (the ”Other Material Entities’) and the Non-Obligor Debtors are obligors under the DIP Facility. Holders of DIP Facility Claims will receive New Equity Interests in the Designated Debtors, which include the Other Material Entities, in satisfaction of the DIP Facility Claims. Other Secured Claims will be Unimpaired under the Plan. Holders of the Deerfield Secured Claims will receive New Equity Interests in certain of the Debtors on account of the Deerfield Secured Claims. Deerfield will then recapitalize the Reorganized Debtors as their new owners.”
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