El Paso Children’s Hospital lawsuit abatement motion denied by court

By Caroline Salls

Pittsburgh, June 12 – The Office of the Texas Attorney General’s motion to abate three lawsuits filed in El Paso Children’s Hospital Corp.’s Chapter 11 case was denied Thursday by the U.S. Bankruptcy Court for the Northern District of Texas.

In Thursday’s order, judge H. Christopher Mott said he understood the attorney general’s underlying purpose for the motion, but it should be denied for reasons raised by the hospital.

As previously reported, the attorney general’s office said it was seeking abatement of an adversary complaint and application for injunction filed against El Paso County Hospital District, which does business as University Medical Center of El Paso (UMC), an adversary complaint filed against El Paso First Health Plans, Inc. and an adversary complaint filed against Navigant Healthcare Cymetrix Corp.

The attorney general’s office said the lawsuits should be abated pending mediation “in an attempt to resolve the myriad issues raised by the debtor without the need for litigation and to preserve the limited assets of the debtor.”

In its response to the abatement motion, the hospital said the majority of the relief requested in the motion has already been negotiated between the parties relevant to two of the adversary proceedings.

Specifically, El Paso Children’s and UMC have agreed to participate in a mediation, and correspondingly, have stipulated to extend each of their deadlines to move, answer or otherwise respond to the complaints.

As to the remaining adversary complaint against Navigant Healthcare Cymetrix, which solely seeks to avoid the preferential garnishment of nearly $1 million, the hospital said abatement is improper, because the upcoming mediation will not resolve it, and the Navigant adversary proceeding represents an opportunity for the hospital to retrieve funds that can be put to use in its efforts in this bankruptcy case.

Mott also said the motion was procedurally defective, as it was filed in the main bankruptcy case, not in the adversary proceedings that are the subject of the request for abatement, and was filed by a non-party to those adversary proceedings.

Based in El Paso, Texas, El Paso Children’s Hospital provides pediatric patient care, research and education services. The hospital filed for bankruptcy on May 19 under the Chapter 11 case number 15-30784.

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