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OnCure Holdings Objection Filed

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The Physicians filed with the Bankruptcy Court an objection to OnCure Holdings’ Plan of Reorganization. The objection says, “The Physicians are plaintiffs in a pending adversary proceeding in which they seek a declaration that the automatic stay does not bar them from terminating agreements to which they are parties with certain non-debtor Physician Groups. The agreements – known as Member Physician Agreements (‘MPAs’) – permit the Physicians and Physician Groups to terminate by mutual consent. At no point in the proceedings during which the Court approved the Debtors’ current disclosure statement did the Debtors advise the Court – neither in writing or as part of the hearing – that they consider termination of the MPAs reorganization-threatening. The Court approved the disclosure statement without knowing the Debtors’ concerns….The Debtors allege that the Physicians’ exercise of their independent contractual rights to terminate would have a substantial impact on the Debtor’s revenue. Moreover, the Debtors suggest that termination would permit the physicians to compete with the ultimate purchaser of the Debtors’ assets thereby deterring a proposed purchaser of the Debtors from finalizing its purchase. The reorganization concerns the Debtors express as a reason to dismiss the adversary proceeding are found nowhere in the disclosure statement that was approved by the Court and was distributed to describe and to solicit votes in support of their proposed Amended Plan of Reorganization. Indeed, the risks to reorganization and Amended Plan consummation appear in no document delivered to those entitled to vote on whether to approve the Amended Plan; those persons remain in the dark about the Physicians’ and Physician Groups’ clear contractual rights, and the Debtor’s concerns about the risks posed by termination. If the reorganization risks associated with the adversary proceedings are as the Debtors say, they are not only required to be disclosed, but the adversary proceedings should be resolved before Amended Plan Confirmation.”

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