Adeptus looks to include settlement in plan; shareholders muddy waters

By Caroline Salls

Pittsburgh, Sept. 6 – Adeptus Health Inc. asked the U.S. Bankruptcy Court for the Northern District of Texas to either confirm a Chapter 11 plan that is to be modified by a settlement agreement or, if the equity committee appointed for its case is not ordered to comply with the settlement, confirm the plan as is, according to a motion filed Tuesday.

As previously reported, Adeptus recently reached a settlement with senior secured lender Deerfield Management Co., LP and the official committee of unsecured creditors and official equity committee for Adeptus’ bankruptcy case that sets the terms of a consensual plan.

Under the settlement, recovery allocated to Adeptus’s general unsecured creditors would not be used to satisfy specified claims against the estate.

Instead, three categories of claims would instead be satisfied as part of the Adeptus Health estate in connection with the recovery allocated to that debtor’s stakeholders, including the common stockholders represented by the equity committee.

However, the company said the equity committee “has recently attempted to re-trade the terms of the settlement agreement.”

Specifically, even though this settlement allocated significant funds to the estate of Adeptus Health on account of its asserted interests in causes of action, the equity committee “balked after considering that the funds would be subject to absolute priority and would pay other PubCo creditors before equityholders,” the motion said.

“To the extent that the equity committee continues to attempt to re-trade the terms of the settlement agreement, such actions are merely the latest chapter in the equity committee’s attempts to hijack the bankruptcy process in order to force the other parties to capitulate and accept its unreasonable demands,” Adeptus said.

Adeptus said the parties entered into a valid settlement agreement, and that agreement should be enforced by the court.

Based in Lewisville, Texas, Adeptus maintains a network of freestanding emergency rooms and partnerships with health care providers. The company filed for bankruptcy on April 19 under Chapter 11 case number 17-31432.

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