In re LMCHH PCP LLC

In re LMCHH PCP LLC, et al.,¹ Debtors.

Case No. 17-10353 Section "B"

UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF LOUISIANA

October 2, 2017

Chapter 11

Jointly Administered with Case No. 17-10354

FINDINGS OF FACT AND CONCLUSIONS OF LAW REGARDING THE CONFIRMATION OF THE PLAN PROPONENTS' AMENDED JOINT PLAN OF LIQUIDATION

This matter came before the Court on the confirmation of the Amended Joint Plan of Liquidation, dated August 1, 2017 [P-470]² (the "Amended Joint Plan"),³ proposed by LMCHH PCP LLC, a Delaware limited liability company, and Louisiana Medical Center and Heart Hospital, LLC, a North Carolina limited liability company (together, the "Debtors") and the Official Committee of Unsecured Creditors (the "Creditors Committee" and with the Debtors, the "Plan Proponents"), a copy of which is attached as Exhibit A to the Confirmation Order (the "Confirmation Order") that is separately filed and incorporates these Findings of Fact and Conclusions of Law Regarding the Confirmation of the Joint Plan Proponents' Amended Joint Plan of Liquidation. The Court has considered the evidence presented and arguments made at the confirmation hearing (the "Confirmation Hearing") held on September 25, 2017. As setforth in the Memo to Record [P-557] on September 26, 2017, after considering the arguments of counsel, the testimony of the witnesses and the tabulation of Ballots filed herein, the Court finds that the Amended Joint Plan of Liquidation as of August 1, 2017, as immaterially modified per P-527, complies with Section 1129 of the Bankruptcy Code and will confirm same as set forth in the Confirmation Order. In addition to the oral findings and reasons for this Court's ruling as stated in open court at the conclusion of the Confirmation Hearing, the Court hereby makes the following additional and supplemental findings of fact and conclusions of law:

FINDINGS OF FACT AND CONCLUSIONS OF LAW

A. Exclusive Jurisdiction; Venue; Core Proceeding (28 U.S.C. §§ 157(b)(2) and 1334(a)). On the Petition Date, the Debtors commenced the above captioned cases (the "Bankruptcy Cases") by filing a voluntary petition for relief under Chapter 11 of the Bankruptcy Code. The Debtors are qualified and were qualified to be debtors under Section 109 of the Bankruptcy Code. Venue is proper before this Court pursuant to 28 U.S.C. §§ 1408 and 1409, and this Court has jurisdiction over these Bankruptcy Cases pursuant to 28 U.S.C. §§ 157 and 1334. Confirmation of the Amended Joint Plan is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(L), and this Court has exclusive jurisdiction to determine whether the Amended Joint Plan complies with the applicable provisions of the Bankruptcy Code and should be confirmed. The Court has the power to authorize and direct each of the actions contemplated by the Amended Joint Plan.

B. On June 29, 2017, the Plan Proponents filed their Joint Plan of Liquidation [P-416] and accompanying Disclosure Statement [P-417].

C. On August 1, 2017, the Plan Proponents filed an Amended Joint Plan of Liquidation [P-470] (as may be modified, amended or supplemented, the "Amended Joint Plan") and accompanying Disclosure Statement Describing Amended Joint Plan of Liquidation by LMCHH PCP LLC, Louisiana Medical Center and Heart Hospital, LLC, and the Official Committee of Unsecured Creditors, as of August 1, 2017 [P-468] (as may be modified, amended or supplemented, the "Disclosure Statement"). Capitalized terms which are not identified herein have the meanings used in the Amended Joint Plan or the Disclosure Statement.

D. Two objections were filed to the Disclosure Statement, by the Kusnick/Delaney Plaintiffs [P-461] and Gifted Nurses [P-460].

E. At the Hearing on the Disclosure Statement, the Kusnick/Delaney Plaintiffs stated on the record that, based on the Plan Proponents' agreement to include a letter from counsel to the Kusnick/Delaney Plaintiffs in the Disclosure Statement, they withdrew their Objection to the Disclosure Statement. (Confirmation Hearing Exhibit 17, p. 7.)

F. After hearing the argument of counsel, the Bankruptcy Court overruled the objection to the Disclosure Statement filed by Gifted Nurses and approved the Disclosure Statement. (Confirmation Hearing Exhibit 17, p. 16.)

G. On August 4, 2017, the Court issued an Order Approving the Disclosure Statement [P-485] (the "Solicitation Procedures Order"), holding, among other things, that "The Disclosure Statement is approved as containing adequate information within the meaning of Section 1125 of the Bankruptcy Code." No party in interest appealed or otherwise sought reconsideration of the Solicitation Procedures Order.

H. Appropriateness of the Solicitation Procedures. The procedures set forth in the Solicitation Procedures Order were fair and appropriate under the circumstances, providedadequate notice to all parties in interest and otherwise complied with Section 1125 and 1126 of the Bankruptcy Code. The procedures set forth in the Solicitation Procedures Order fairly presented the Employee Settlement to Employees and conspicuously provided sufficient notice and disclosures with respect to the Employee Settlement, the releases provided for therein, and the requirements and procedures for Employees to opt out of the Employee Settlement. The procedures set forth in the Solicitation Procedures Order comply with the requirements of the Bankruptcy Code and otherwise applicable law. The procedures set forth in the Solicitation Procedures Order (and implemented by the Plan Proponents) do not differ, in any material respects, from the procedures that the Court would have implemented in the context of a Rule 23 of the Federal Rules of Civil Procedure (the "Civil Rules") class action settlement.

I. The evidence presented at the Confirmation Hearing, including the Kusnick/Delaney Plaintiffs' cross-examination of Craig E. Johnson of the Garden City Group Garden City Group LLC ("GCG"),⁴ , showed that the Ballots sent were clear on their face that the Ballots (a) needed to be signed to be valid, and (b) that both items 1 and 3 on the Ballot were to be completed. The Ballots submitted in evidence by the Kusnick/Delaney Plaintiffs (Confirmation Hearing Exhibits 33, 38, 39, 40, and 41) were questioned either because they were unsigned, or because they rejected the Amended Joint Plan but did not opt out of the Employee Settlement. Each of those Ballots were from clients of the Outten & Golden firm that also represented the Kusnick/Delaney Plaintiffs. See the Bankruptcy Rule 2019 Statement filed by Outten & Golden, Confirmation Hearing Exhibit 2. It is also reasonable that a person would, asdid Misty Morley (Confirmation Hearing Exhibit 38) and Dr. Breaux (Confirmation Hearing Exhibit 39), vote to reject the Amended Joint Plan but still want to receive the amounts set forth on their Ballots, as part of the Employee Settlement, should the plan be confirmed. Further, as persons claimed to be clients of Outten & Golden, these persons purportedly had access to counsel to assist them in filling out the Ballots, and could readily have been brought to the Confirmation Hearing to testify. There was no evidence presented that the clear, plain, and conspicuous language in the Ballots, which the Court approved in the Solicitations Procedures Order, was deficient in any way. The almost 400 valid Ballots demonstrate that the Solicitation Procedures were not difficult to follow.

J. As evidenced by the Affidavit of Service of Emily Young (the "Mailing Affidavit") [P-499], on August 11, 2017, GCG served the Solicitation Packages (as defined in the Solicitations Procedures Order), the Non-Voting Parties Notices (as defined in the Solicitations Procedures Order), and other materials in accordance with the requirements of the Solicitations Procedures Order, including, but not limited to, the separate letters from Fishman Haygood LLP and Bruno & Bruno, LLP and Outten & Golden LLP [P-499, at page 2; and P-507]. The Court finds that the foregoing notice is sufficient and satisfies the requirements of the Bankruptcy Code, the Bankruptcy Rules, and principles of due process.

K. Findings Regarding the Debtors. Each action, agreement and transaction contemplated by the Amended Joint Plan and the Confirmation Order, and all related actions, agreements and transactions necessary to implement, effectuate and confirm the Amended Joint Plan are authorized and lawful.

The Debtors, acting by and through their officers or managers, are duly authorized and empowered to take any and all such actions as any of these may determine are necessary or appropriate to implement, effectuate and consummate any and all documents or transactions contemplated by the Amended Joint Plan or the Confirmation Order. The Debtors have duly authorized, or are empowered to duly authorize, each of the acts, documents, agreements and transactions contemplated in the Amended Joint Plan and Confirmation Order (the "Plan Documents") to implement, effect and consummate the Amended Joint Plan.

L. Burden of Proof. The Plan Proponents have met the burden of satisfying and proving the elements of Sections 1125 and 1129(a) and (b) of the Bankruptcy Code by a preponderance of the evidence, as further found and determined herein.

M. Bar Dates. On May 17, 2017, the Court entered an order (the "Bar Date Order") [P-368] establishing July 10, 2017, as the general deadline to file proofs of claim for prepetition claims against the Debtors (the "General Bar Date") and August 10, 2017, as the bar date for governmental units (the "Governmental Unit Bar Date"). On June 23, 2017, the Court entered an order (the "Administrative Bar Date Order") [P-415] establishing July 28, 2017 as the deadline to file administrative claims arising from January 30, 2017 to and including June 30, 2017 (the "Administrative Claim Bar Date") and also establishing July 28, 2017 as the deadline to file any Postpetition Medical Malpractice Claims that arises from incidents that...