Envision Healthcare’s plan draws objection from U.S. trustee

By Sarah Lizee

Olympia, Wash., Oct. 2 – Envision Healthcare Corp.’s Chapter 11 plan drew a limited objection from Region 7 U.S. trustee Kevin M. Epstein, according to documents filed Monday with the U.S. Bankruptcy Court for the Southern District of Texas.

Epstein said the plan seeks approval of broad exculpation coverage for independent directors and managers and other parties in direct violation of Fifth Circuit law.

The U.S. trustee said that he first sought to resolve his concerns about the plan in early September, but the debtors did not accept requests to narrow the scope of the exculpation provisions.

Epstein said he recently learned that the debtors are now intending to expand the scope of the exculpation provisions in the plan to include a distribution agent, other estate professionals and several other unnamed advisers.

“While a debtor may choose to release its claims against third parties consistent with its business judgment, the bankruptcy code and controlling precedent in this jurisdiction prohibit non-consensual third-party limitations of liability against non-debtors,” the U.S. trustee said in the objection.

“Unless the debtors revise and conform the plans’ exculpation provisions to comply with Fifth Circuit law, confirmation of the EVPS plan and AmSurg plan should be denied.”

The plan confirmation hearing is scheduled for Oct. 10.

Envision is a Nashville-based provider of physician-led services and post-acute care and ambulatory surgery services. The company filed bankruptcy on May 15 under Chapter 11 case number 23-90342.

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