Controversial Bankruptcy Trial Pits Troubled Prison Health-Care Provider Against Outraged Federal Officials and Civil Rights Groups

HOUSTON – A controversial legal maneuver in the bankruptcy trial of troubled prison health-care provider Tehum Care Services Inc. is drawing attention from federal officials and civil rights groups. The trial, set to begin Friday in the US Bankruptcy Court for the Southern District of Texas, will test the validity of a settlement proposed by Tehum that would strip prisoners and others of their right to sue parties involved in the takeover and bankruptcy of Corizon Health Inc., the nation’s former largest prison healthcare provider. Tehum, a shell company established to absorb legal liabilities of … Read more

Trucking Giant Pride Group Seeks Bankruptcy Protection as $100 Million Lawsuit Looms

Mississauga, Ontario – Pride Group, one of Canada’s largest trucking carriers, has filed for bankruptcy protection following a lawsuit from lender Mitsubishi HC Capital America. The lawsuit seeks $100 million. Pride Group submitted the creditor protection filing on Thursday, invoking the Companies’ Creditors Arrangement Act (CCAA) in Canada. Under the CCAA, the company receives a stay of proceedings for at least 10 days. In a news release, Pride Group stated that the CCAA proceedings and seeking recognition under Chapter 15 cases would enable them to continue operations, stabilize their business, establish governance controls and monitoring, … Read more

Long-Term Care Operator Petersen Health Care Plans to Sell Facilities Amid Bankruptcy Challenge

Peoria, Illinois – Long-term care operator Petersen Health Care has announced plans to sell off portions of its facilities after filing for Chapter 11 bankruptcy. The company, which currently operates almost 100 senior care facilities in the rural Midwest, is burdened with nearly $300 million in debt, including millions of dollars owed in loans that resulted in eight Petersen-run facilities in Illinois being placed in receivership. To aid in its restructuring efforts, Petersen secured a $45 million bankruptcy loan with the goal of maintaining operations to preserve the value of its facilities and generate additional … Read more

Insurer Standing in Bankruptcy Cases: A Controversial Debate that Could Impact Mass Tort Resolutions

Houston, Texas – Insurers seeking broad standing in mass tort bankruptcy cases face opposition from legal experts. The U.S. Supreme Court is considering whether to endorse insurer standing in the case of Truck Insurance Exchange v. Kaiser Gypsum Company Inc., with some arguing that a broad view of insurer standing would eliminate obstacles to resolving insurer objections. However, experts argue that insurers’ claims are based on two fallacies and that expanding their standing would only lead to unnecessary delays in bankruptcy proceedings. The first fallacy criticized by legal experts is the notion that the goal … Read more