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Orianna Health Systems Settlement Agreement Enforcement Sought

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Orianna Health Systems’ Official Committee of Unsecured Creditors (the “Committee”) filed with the U.S. Bankruptcy Court a motion to (i) enforce a previously filed emergency motion to enforce a settlement and (ii) enter an order finding that the Committee and Omega Healthcare Investors have an enforceable settlement agreement. The motion explains, “This Motion arises out of Omega’s failure to honor a settlement agreement it struck with the Committee, after a Court-authorized mediation, to resolve the Committee’s objection to the Debtors’ joint plan of reorganization (the ‘Plan’), the Committee’s appeal of the Court’s Order approving the Debtors’ Compromise and Settlement with Omega, and the Committee’s potential objection to the proposed transfer of certain of the Debtors’ operations and facilities included in the Debtors’ Transfer Portfolio….In its settlement proposal, Omega offered to provide the general unsecured creditors a minimum guaranteed recovery amount of $8 million in exchange for the Committee’s agreement to support confirmation of the Plan. The Committee formally accepted Omega’s offer on June 30, 2018. As a result, an enforceable settlement contract between Omega and the Committee was formed. Nevertheless, Omega now takes the position that no settlement has been reached…on Monday, July 2, 2018, Omega sought to distance itself from its own Settlement Offer. Omega’s counsel contended that Committee counsel’s June 29 inquiry was in fact a counter-offer, which constituted a rejection of Omega’s settlement offer, and that Omega’s June 27 Settlement Offer could no longer be accepted….Omega’s contention that Committee counsel’s June 29 email is a counter-offer that nullified Omega’s Settlement Offer made after an all day, Court-authorized mediation, is incorrect, and the Court should find that Omega and the Committee have entered into an enforceable settlement agreement.” The Committee also filed with the Court a related motion to continue a hearing on the previously filed emergency motion to enforce settlement.

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