Following its sister court in Colorado[1] the United States Bankruptcy Court for the District of Arizona recently held that the debtor’s operation of a business that it illegal under federal law mandates dismissal of an involuntary bankruptcy petition filed against the debtor. In re Medpoint Management, LLC, 528 B.R.
A recent court ruling is a good reminder to health care providers that bankruptcy may not (as is sometimes suggested) be a safe harbor for providers in danger of being forced out of business by the loss of their Medicare and Medicaid provider agreements.
Introduction
Law360, New York (July 17, 2015, 11:24 AM ET) -- On June 26, 2015, the U.S. District Court for the Middle District of Florida issued an opinion on consolidated appeals arising from the Bayou Shores SNF LLC bankruptcy case with potentially broad implications for health care bankruptcy cases. At the heart of the dispute before the district court was whether the bankruptcy court had jurisdiction to enjoin the termination of, and subsequently authorize the assumption of, certain Medicare and Medicaid provider agreements.
By no means do we think that we might reliably predict the outcome of such a politically charged case as King v. Burwell, No. 14-114, the latest challenge to the Affordable Care Act.
The Federal Priority Act (FPA) is a little-known statute that dates back centuries, and has increasingly been used by the federal government to recover significant sums from all types of insolvent businesses and individuals.
The approval by Colorado voters of medical marijuana in 2000, and recreational marijuana in 2012, has created a burgeoning legal marijuana industry in our state. Not only have marijuana growing operations and dispensaries flourished, but they have provided new leasing opportunities for landlords.
Editor’s note: Success in the restructuring and insolvency arena requires more than an understanding of the law—it requires the ability to address issues specific to a debtor’s industry and business. Below, two Reed Smith partners with extensive experience representing health care institutions and creditors discuss issues unique to hospitals facing financial distress.
The United States District Court for the Middle District of Florida, applying Florida law, has held that exclusions for claims involving the receivership of a healthcare benefit plan and claims involving Multiple Employer Welfare Arrangements (MEWA) barred coverage for claims brought by a receiver of a healthcare benefit plan alleging that brokers sold coverage under a benefit plan that was a MEWA. White v. Cont'l Cas. Co., 2008 WL 2073905 (M.D. Fla. May 14, 2008).
On September 15, 2008, Lehman Brothers Holdings Inc. ("Lehman Holdings") filed for Chapter 11 in the United States Bankruptcy Court for the Southern District of New York (Case No. 08-13555). None of Lehman Holdings’ U.S. subsidiaries have filed for bankruptcy at this point. In addition, while Lehman Holdings has certain subsidiaries that are regulated entities (e.g., banks, insurance companies, etc.), none of those entities has yet been placed into any kind of insolvency proceeding by the applicable regulators.