Biotech
Wednesday, November 15th, 2023 7:00 pm EDT
Key Points
- Judge Resignation and Conflict of Interest: Former bankruptcy judge David Jones resigned due to a romantic relationship with attorney Liz Freeman, who represented Tehum’s affiliate YesCare in the mediation talks. This led to concerns about a conflict of interest, particularly since Jones failed to disclose that he shared a home with Freeman during the mediation.
- Approval of New Mediator and Reevaluation of Settlement: Tehum Care Services, a prison healthcare company undergoing bankruptcy to address medical malpractice lawsuits, received court approval to replace Judge Jones with retired bankruptcy judge Christopher Sontchi. U.S. Bankruptcy Judge Christopher Lopez, overseeing Tehum’s case, stated that Sontchi should reevaluate the entire mediated settlement of approximately $8.5 million, expressing reservations about the deal’s fairness.
- Impact on Bankruptcy Settlement and Disclosure Issues: The undisclosed relationship between Judge Jones and attorney Freeman raised questions about the integrity of the proposed bankruptcy settlement. Attorneys for Tehum and its creditors committee argued that the relationship had no impact on the settlement, but Judge Lopez emphasized the need for better disclosure. The case is part of several bankruptcies affected by Jones’s sudden resignation, prompting a reevaluation of the deal’s terms and potential conflicts of interest.
Prison healthcare company Tehum Care Services, involved in a bankruptcy case related to medical malpractice lawsuits against its predecessor Corizon Health, has received court approval to proceed with a new mediator. The former bankruptcy judge, David Jones, resigned from the case due to a romantic relationship with an attorney involved in the negotiations, leading to concerns about a conflict of interest.
Tehum Care, which filed for bankruptcy in February, had reached a mediated settlement of approximately $8.5 million to resolve claims from prisoners and former prisoners. However, the deal faced opposition, alleging that Judge Jones failed to disclose his relationship with attorney Liz Freeman, representing Tehum’s affiliate YesCare in the talks.
The newly appointed mediator, retired bankruptcy judge Christopher Sontchi, will reassess the entire settlement, considering concerns raised about the undisclosed relationship. U.S. Bankruptcy Judge Christopher Lopez, overseeing the case, expressed reservations about the initial deal and emphasized the need for better disclosure.
The Tehum case is one of several affected by Judge Jones’s resignation, raising questions about potential conflicts in cases he presided over. Despite arguments from Tehum and its creditors committee that Jones’s relationship had no impact on the proposed settlement, the court is open to reevaluating the deal when mediation talks resume.
Key concerns include the allocation of funds, who benefits from legal protections, and the release of legal claims. Tehum, in recent court documents, disclosed that its bankruptcy loan was provided by an entity affiliated with Isaac Lefkowitz, overseeing Corizon’s division into YesCare and Tehum. The case continues with uncertainties about the impact of the undisclosed relationship on the proposed bankruptcy settlement.
For the full original article, please click here: https://www.reuters.com/business/healthcare-pharmaceuticals/prison-healthcare-company-restarts-mediation-after-bankruptcy-judge-jones-quits-2023-11-15/
