American Physician Partners committee objects to disclosure statement

By Sarah Lizee

Olympia, Wash., Oct. 26 – American Physician Partners, LLC’s official committee of unsecured creditors objected to the company’s motion seeking conditional approval of its disclosure statement, according to documents filed Wednesday with the U.S. Bankruptcy Court for the District of Delaware.

The committee noted that the cases were filed right after a “starkly unusual event,” when nearly all of the value of the debtors’ operating business was “transitioned out of the enterprise at breakneck speed.”

“Now the debtors seek to push through confirmation of a plan of liquidation, also at a rapid speed, with disclosures that fail to provide sufficient information required for claimants to understand their rights or anticipated recoveries under that plan,” the committee said.

The committee said the debtors need to “slow down,” and, at a minimum, provide claimants with additional disclosures needed to adequately evaluate the proposed plan.

According to the disclosure statement, only two classes of claimants are entitled to vote on the plan: holders of the prepetition lenders secured claims and holders of unsecured claims, which includes the prepetition lenders’ deficiency claim and all other unsecured claims.

“As the holders of the prepetition lenders secured claims and prepetition lenders deficiency claim purportedly will receive the vast majority of all value extracted from the estates, it is imperative that holders of general unsecured claims receive adequate information to understand the likely nonexistent recoveries they would receive under the proposed plan,” the committee said.

The group said that one of the key pieces of information missing from the documents is the scope and impact of the plan’s release provisions.

Also missing is the anticipated value and nature of claims in each class, anticipated pro rata recoveries to claimants and details regarding potential estate assets – particularly deferred compensation trust funds and retained causes of action – that would fund claimant recoveries.

The disclosure statement also lacks background information regarding the debtors’ prepetition actions and operations, the committee added.

A hearing is scheduled for Oct. 31.

American Physician Partners is a scaled emergency department and hospitalist management platform based in Brentwood, Tenn. The company filed bankruptcy on Sept. 18 under Chapter 11 case number 23-11469.

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