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Elements Behavioral Health Bidding Procedures Objection Filed

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Cigna Behavioral Health of Texas and Cigna Behavioral Health filed with the U.S. Bankruptcy Court an objection to Elements Behavioral Health’s Sale Motion (Docket No. 19). The objection asserts, “Cigna objects to the Sale Motion because, inter alia, (i) Debtors have not provided information relating to adequate assurance of future performance; (ii) the Sale Motion does not propose to satisfy Debtors’ cure obligations consistent with section 365(b)(1) of the Bankruptcy Code; and (iii) the Debtors have failed to provide for adequate notice of their proposed disposition of the Cigna Agreements. Additionally, notwithstanding anything herein to the contrary, Cigna objects to any proposed assignment of the Cigna Agreements without Cigna’s written consent as required by the terms thereof…. As of July 6, 2018, approximately $70,745.65 was due and owing to Cigna under the Cigna TRS Agreement, and approximately $2,409.23 was due and owing to Cigna under the Cigna SBH Agreement…. The disposition of the Cigna Agreements, and the timing of that disposition, may have a significant impact on the Debtors’ patients and healthcare providers. Therefore, adequate notice of that disposition must be provided. Because the Debtors are proposing to sell all of their operations, any failure to assume and assign the Cigna Agreements will have a significant and immediate effect upon, among others, (i) those patients who are currently utilizing the Facilities and believe that the Debtors will continue to be a Cigna in-network provider under their healthcare insurance policies, (ii) people covered under Cigna healthcare insurance policies who may be contemplating treatment at the Facilities, and (iii) patients of private practice physicians in Cigna’s health services network who have privileges only at the Debtors’ Facilities. It is for this reason that the Cigna Agreements require minimum notice of any no-cause termination. Thus, regardless of any exigencies that the Debtors may face, patients and providers must be given fair and adequate advance notice of Debtors’ intent with regard to the Cigna Agreements. For the benefit of the Debtors’ patients and physicians, any Sale Order should require the Debtors to provide irrevocable notice of their proposed disposition of the Cigna Agreements no less than 60 days prior to the Effective Date.”

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