Orion Healthcorp – Parmar Entities Seek Appointment of a Trustee or Examiner, Alleging “Illegal Activities” Have Resulted in $309 million Loss

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November 1, 2018 – Parmjit Singh Parmar and entities he controls (collectively, the “Parmar Entities”) requested that the Court hearing the Orion Healthcorp case appoint a trustee or an examiner [Docket No. 561]. The motion requests the appointment of a “Trustee or an examiner, ‘for cause’, to conduct an investigation of the Debtors, their Board of Director, pre- and post-petition management and Bankruptcy Court-appointed advisors for (A) ‘fraud, dishonesty, incompetence or gross mismanagement of the affairs of the Debtor by current management’ before and after the commencement of this Chapter 11 case, and (B) the acts, conducts, assets, liabilities and financial condition of the Debtor, and the operation of the Debtors’ business during the pendency of this Chapter 11 case, has been submitted for consideration….Parmar and the Parmar Entities, who are shareholders and creditors of CHT, have suffered immense losses and damages of approximately $309 million, by the pattern of illegal activity by CHT’s Board of Directors, CHT, Chinh Chu, CC Capital and CHT Holdco that began pre-petition in or around January 2016 and continues to date….The fraudulent sales of CHT’s assets, which resulted in the Chapter 11  estate of CHT realizing $29.1 million, less than 10% of the actual value of those assets ($533 million), to the detriment of CHT’s creditors, including Parmar and the Parmar Entities, and the former public shareholders….There is no way that Chinh Chu would have agreed to a ‘go-private’ purchase price requiring his investors to pony-up $88 million and his bank, BofA, to loan his acquisition entities, CC Capital, and CHT, $140 million, if CHT’s value was one-tenth of those 2 combined contributions….The winners: Chinh Chu, who ends up as the owner of CHT’s assets with a $440 million savings, and BofA who is repaid in full for both its DIP financing and pre-petition ‘go-private’ transaction loan, with the interest accrued, $3 million in fees for the loan and $38 million in fees/commissions from the Fidelity & Guaranty Life Insurance deal. The losers are everyone else! Especially the public shareholders on the London AIM and Parmar and the Parmar Entities.”

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