Adeptus Health’s official committee of unsecured creditors and Dignity Health filed with the U.S. Bankruptcy Court separate objections to the Company’s financing motion.
The committee asserts, “Despite equally hard-fought negotiations, the Committee has not been able to change Deerfield’s desire to control the direction of these cases and restrict the exercise of the Debtors’ and the Committee’s respective fiduciary duties to maximize value. Specifically, the DIP requires that the Debtors’ and the Committees’ professionals strictly adhere to the Budget – and, to the extent any professional fees exceed the Budget, waive their entitlement to assert any administrative claims at the outset of these cases.”
In addition, “Deerfield is attempting, through its position as a DIP Lender, to compromise the independent decision making process of both the Debtors and the Committee. This type of control of a chapter 11 case by a DIP Lender cannot be tolerated….If Deerfield is unwilling to take on these obligations and have the Debtors’ cases funded, in compliance with chapter 11 norms and established practices, in a way that permits the Debtors, the Committee, and their professionals to satisfy their fiduciary duties, they should not receive the benefits of the bankruptcy process. The Committee is committed to maximizing value for all in as efficient a way as possible, but cannot be asked to compromise its independence and fiduciary duties. Simply put, if Deerfield will not pay for the tremendous benefit of chapter 11, then perhaps the cases should be dismissed and Deerfield should attempt to assert its rights as a secured creditor under applicable state law or the Debtors’ cases should be converted to chapter 7.”
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