Rakhee V. Patel

On Friday, August 2, 2024, Sidley successfully obtained confirmation of Ebix Inc.’s Chapter 11 plan from the U.S. Bankruptcy Court for the Northern District of Texas. Ebix, which operates an insurance exchange platform as well as providing other financial services focused on the insurance industry, filed for Chapter 11 bankruptcy on December 17, 2023. In connection with the filing, Ebix reached a “stalking horse” agreement to sell its North American Life and Annuity assets to Zinnia Distributor Solutions, which sale ultimately closed on April 1, 2024. The Debtors then ran an extensive marketing process for their remaining assets and/or equity interests in non-Debtor subsidiaries, and the right to sponsor a plan of reorganization for the Debtors. A consortium of Eraaya Lifespaces Limited, Vikas Lifecare Limited, and Vitasta Software India Private Limited (the “Plan Sponsor”) was the successful bidder for the sponsorship of a plan of reorganization for the Debtors, and the Debtors were able to broker a global resolution between the Debtors, the Prepetition Lenders / DIP lenders, the Plan Sponsor, and the Unsecured Creditors Committee in advance of the confirmation hearing to present an uncontested confirmation hearing other than with respect to issues related to releases and exculpation provisions in the plan raised by the Office of the United States Trustee. Following a bench ruling, the Court confirmed the plan, commending the parties for a “marvelous job” done, specifically appreciating the consideration given to addressing the Court’s stated concerns regarding third-party releases (although ultimately requiring the removal of the third-party release opt-out provisions). This complex, cross-border matter involved lawyers and staff from the New York, Chicago, Los Angeles, Century City, Houston, Dallas, Washington, D.C., San Francisco, London, Singapore, and Hong Kong offices. The Sidley team included Tom Califano, Rakhee Patel, Ameneh Bordi, Jeri Leigh Miller, Weiru Fang, Molly Dyas, Luke Mason, Michael Sabino, Ibrahim Babiker, Siddhanth Goyal, Raphael Rabinowitz, Parker Embry, Ashrita Gulati, Jake Landreth, Joshua Lee, Jesse Lopez, Chelsea McManus, Joshua Oeij, Andreas Rauch, Francesca Sadler, and Chris Yu (Restructuring); Nicholas Schwartz, Mark Adler, Julie Ann Rosenberg Lamm, Pietro Fontana, Daniel Lindsey, Bill Turnbull III, Shaobin Zheng, Wilfred Ong, and Horine Ye (Global Finance); S. Scott Parel, Justin Macke, Jessica Pisani, Nick DeAngelis, Staci Alexander, Amanda Patterson, Ryan Lim, Sarah Kang, Ellen Heighten, Henry Dickinson, Rachel Ang, Caulyn Bong, Micaela Hannah, and Amanda Gonzalez (M&A/Private Equity); Suresh Advani, Richard Silverman, Oliver Currall, Mitchell Li, Molly Homann, Tyler Replogle, Alice Qin (Tax); Gregory Jacobs, John Kuster, Jon Muenz, and Katelin Everson (Commercial Litigation and Disputes); James Mendenhall, Carys Golesworthy, Kayla Scott, and Ryan Tan (Global Arbitration, Trade and Advocacy); Kristina Gliklad, Vadim Brusser, Edward Sharon, and Jamie Sadler (Antitrust and Competition); Kostian Ciko, Prabhat Mehta, and Istvan Hajdu (Capital Markets); Mary Niehaus and Gregory Matisoff (Employee Benefits and Executive Compensation); Walter Carlson and Andrew Kunsak (Securities and Shareholder Litigation); David Lashway and John W. Woods Jr. (Privacy and Cybersecurity); E. Kyle Barnett (Technology and Life Sciences Transactions); Stephanie Dobecki (Insurance); Elizabeth McCloy (Real Estate); Carlton Fleming (Emerging Companies and Venture Capital); Scott Heyman (Tax Controversy); Katherine Roberts (Labor, Employment and Immigration); and George Vlahakos (Energy and Infrastructure).~~On Friday, August 2, 2024, Sidley successfully obtained confirmation of Ebix Inc.’s Chapter 11 plan from the U.S. Bankruptcy Court for the Northern District of Texas. Ebix, which operates an insurance exchange platform as well as providing other financial services focused on the insurance industry, filed for Chapter 11 bankruptcy on December 17, 2023. In connection with the filing, Ebix reached a “stalking horse” agreement to sell its North American Life and Annuity assets to Zinnia Distributor Solutions, which sale ultimately closed on April 1, 2024. The Debtors then ran an extensive marketing process for their remaining assets and/or equity interests in non-Debtor subsidiaries, and the right to sponsor a plan of reorganization for the Debtors. A consortium of Eraaya Lifespaces Limited, Vikas Lifecare Limited, and Vitasta Software India Private Limited (the “Plan Sponsor”) was the successful bidder for the sponsorship of a plan of reorganization for the Debtors, and the Debtors were able to broker a global resolution between the Debtors, the Prepetition Lenders / DIP lenders, the Plan Sponsor, and the Unsecured Creditors Committee in advance of the confirmation hearing to present an uncontested confirmation hearing other than with respect to issues related to releases and exculpation provisions in the plan raised by the Office of the United States Trustee. Following a bench ruling, the Court confirmed the plan, commending the parties for a “marvelous job” done, specifically appreciating the consideration given to addressing the Court’s stated concerns regarding third-party releases (although ultimately requiring the removal of the third-party release opt-out provisions). This complex, cross-border matter involved lawyers and staff from the New York, Chicago, Los Angeles, Century City, Houston, Dallas, Washington, D.C., San Francisco, London, Singapore, and Hong Kong offices. The Sidley team included Tom Califano, Rakhee Patel, Ameneh Bordi, Jeri Leigh Miller, Weiru Fang, Molly Dyas, Luke Mason, Michael Sabino, Ibrahim Babiker, Siddhanth Goyal, Raphael Rabinowitz, Parker Embry, Ashrita Gulati, Jake Landreth, Joshua Lee, Jesse Lopez, Chelsea McManus, Joshua Oeij, Andreas Rauch, Francesca Sadler, and Chris Yu (Restructuring); Nicholas Schwartz, Mark Adler, Julie Ann Rosenberg Lamm, Pietro Fontana, Daniel Lindsey, Bill Turnbull III, Shaobin Zheng, Wilfred Ong, and Horine Ye (Global Finance); S. Scott Parel, Justin Macke, Jessica Pisani, Nick DeAngelis, Staci Alexander, Amanda Patterson, Ryan Lim, Sarah Kang, Ellen Heighten, Henry Dickinson, Rachel Ang, Caulyn Bong, Micaela Hannah, and Amanda Gonzalez (M&A/Private Equity); Suresh Advani, Richard Silverman, Oliver Currall, Mitchell Li, Molly Homann, Tyler Replogle, Alice Qin (Tax); Gregory Jacobs, John Kuster, Jon Muenz, and Katelin Everson (Commercial Litigation and Disputes); James Mendenhall, Carys Golesworthy, Kayla Scott, and Ryan Tan (Global Arbitration, Trade and Advocacy); Kristina Gliklad, Vadim Brusser, Edward Sharon, and Jamie Sadler (Antitrust and Competition); Kostian Ciko, Prabhat Mehta, and Istvan Hajdu (Capital Markets); Mary Niehaus and Gregory Matisoff (Employee Benefits and Executive Compensation); Walter Carlson and Andrew Kunsak (Securities and Shareholder Litigation); David Lashway and John W. Woods Jr. (Privacy and Cybersecurity); E. Kyle Barnett (Technology and Life Sciences Transactions); Stephanie Dobecki (Insurance); Elizabeth McCloy (Real Estate); Carlton Fleming (Emerging Companies and Venture Capital); Scott Heyman (Tax Controversy); Katherine Roberts (Labor, Employment and Immigration); and George Vlahakos (Energy and Infrastructure).

Aug 9

5 min

Prospect Medical Holdings Inc. says the pending Chapter 11 proceedings for its hospitals in California and Connecticut should keep two technology companies from demanding more than $1 million in payment for disputed software and IT contracts, according to Prospect's filings with a Texas bankruptcy court on Monday. Prospect said that with sales or auctions pending for multiple facilities involved in the bankruptcy, the court should deny motions from Veradigm and Altera Digital Health Inc. to make the hospital operator pay $1.06 million in postpetition bills, accept or reject its contracts with the creditors, or lift the automatic stay on litigation, so the contractors can sue. "The debtors cannot make final decisions on assumption or rejection until after finalization of the sale transactions when they can, in consultation with the eventual buyers, consider the possible benefits and burdens of each executory contract," Prospect's response to the movants' motion said. "Forcing this decision on the debtors now would prematurely risk the debtors either assuming a contract they ultimately do not need and saddling the estates with incremental costs, or rejecting a contract that an ultimate buyer would want to assume." Prospect also said its business side was still negotiating a potential resolution of the disputed bills, which could resolve the matter without involving the court. California-based Prospect had filed for Chapter 11 in Texas's Northern District in January, expressing an intent to sell off assets, including hospitals in Connecticut, Rhode Island, California and Pennsylvania, and refocus on its home state. On Aug. 28, Veradigm and Altera filed a motion to compel payment of their administrative claim related to electronic health records software, arguing Prospect's hospitals had not been paying all their bills related to their ongoing use of the systems. Prospect's response Monday said the companies were at odds over some of the payments, given issues that Prospect's hospitals had with the systems. About $796,000 was disputed, the response said. "For Altera, the disputes relate to an agreement (the 'Sunrise Surgical Care agreement') never implemented in the California and Connecticut facilities and another agreement (the 'Touchworks Agreement') never implemented in the ECHN facility," the hospitals' response said. "For Veradigm, the disputes relate to the serious malfunction of the patient portal implementation (the 'FollowMyHealth portal agreement'), which deprived the debtors of the benefits of the FollowMyHealth portal agreement. Notwithstanding these disputes, the debtors are engaged in business discussions with Altera and Veradigm and hope to come to a resolution." With a sale of six California hospitals to NOR Healthcare pending, it would be up to NOR to review which contracts would be kept and which would not, Prospect said, so the vendors' demand for an immediate choice was premature. The same applied to three Prospect hospitals in Connecticut, which were earlier in the bankruptcy sale process. "While the Bankruptcy Code permits a counterparty to request the court to compel the debtor to decide whether to assume or reject a contract prior to plan confirmation, the counterparty bears the burden to establish cause for this relief," Prospect said. "...[The vendors'] argument rests on the belief that simply because they have not been immediately paid the full amounts they claim are due for the post-petition period, the factors as a whole weigh in their favor. Conclusory arguments like these are not sufficient to meet their burden." Nor had Veradigm and Altera met the burden necessary for the court to lift the stay for them to file litigation over the contracts, Prospect argued. Payments for nondisputed amounts were being made, and the parties were negotiating over the disputed parts, the company said. But if the stay were lifted and the vendors were allowed to terminate their contracts, the hospitals would be left trying to find a replacement electronic health records system vendor while in the middle of a bankruptcy, the response added. "Movants have likewise not established that the harm that they will experience if the stay is not lifted outweighs the harm to the debtors' estates if the stay is lifted such that 'cause' exists to stay relief," the response said. Counsel for Prospect and the vendors did not immediately respond to requests for comment Tuesday. Prospect Medical Holdings is represented by Thomas R. Califano, Rakhee V. Patel, Maegan Quejada, William E. Curtin, Patrick Venter and Anne G. Wallice of Sidley Austin LLP. Veradigm and Altera are represented by Jeffrey K. Garfinkle of Buchalter. The case is In Re: Prospect Medical Holdings Inc. et al., case number 25-80002, in the U.S. Bankruptcy Court for the Northern District of Texas.

Oct 7

3 min

D Magazine has named ten Sidley lawyers to its annual “Best Lawyers in Dallas” list. Lawyers are nominated by their peers, then reviewed by an anonymous panel of attorneys and D Magazine’s editorial staff. Recognized Sidley lawyers are: Sara Garcia Duran Kelly Dybala Holt Foster Yolanda Garcia Lauren Grau William Howell Tara Lancaster Scott Parel Rakhee Patel Eric Winwood~~D Magazine has named ten Sidley lawyers to its annual “Best Lawyers in Dallas” list. Lawyers are nominated by their peers, then reviewed by an anonymous panel of attorneys and D Magazine’s editorial staff. Recognized Sidley lawyers are: Sara Garcia Duran Kelly Dybala Holt Foster Yolanda Garcia Lauren Grau William Howell Tara Lancaster Scott Parel Rakhee Patel Eric Winwood

Apr 24

1 min

In connection with the 2023 Ebix Chapter 11 filing in the U.S. Bankruptcy Court for the Northern District of Texas, Sidley secured approval of an amended disclosure statement that contemplates a plan of reorganization of the company by a Plan Sponsor pursuant to the terms of a Plan Sponsor Agreement. If the Plan Sponsor cannot satisfy the terms of the Plan Sponsor Agreement, the plan allows for a toggle to a sale of the company’s assets to certain back-up bidders, which sale would also be effectuated pursuant to the plan. Ebix is a publicly traded leading international supplier of on-demand software and e-commerce services to the insurance, financial services, travel, healthcare, and e-learning industries. At a hearing on June 27, 2024, Judge Scott W. Everett approved the company’s disclosure statement, filed by the Sidley team on June 26, 2024, and which reflected auctions for plan sponsorship rights and non-life and annuity assets. The amended plan incorporates a US$145 million reorganization transaction with a Plan Sponsor consortium and a toggle to a back-up asset sale plan to certain identified back-up bidders in the event the Plan Sponsor does not come up with US$ 145 million in funding. Tom Califano and Rakhee Patel (both Restructuring) lead the Sidley team representing Ebix. The team also includes Ameneh Bordi, Jeri Leigh Miller, and Weiru Fang (all Restructuring).~~In connection with the 2023 Ebix Chapter 11 filing in the U.S. Bankruptcy Court for the Northern District of Texas, Sidley secured approval of an amended disclosure statement that contemplates a plan of reorganization of the company by a Plan Sponsor pursuant to the terms of a Plan Sponsor Agreement. If the Plan Sponsor cannot satisfy the terms of the Plan Sponsor Agreement, the plan allows for a toggle to a sale of the company’s assets to certain back-up bidders, which sale would also be effectuated pursuant to the plan. Ebix is a publicly traded leading international supplier of on-demand software and e-commerce services to the insurance, financial services, travel, healthcare, and e-learning industries. At a hearing on June 27, 2024, Judge Scott W. Everett approved the company’s disclosure statement, filed by the Sidley team on June 26, 2024, and which reflected auctions for plan sponsorship rights and non-life and annuity assets. The amended plan incorporates a US$145 million reorganization transaction with a Plan Sponsor consortium and a toggle to a back-up asset sale plan to certain identified back-up bidders in the event the Plan Sponsor does not come up with US$ 145 million in funding. Tom Califano and Rakhee Patel (both Restructuring) lead the Sidley team representing Ebix. The team also includes Ameneh Bordi, Jeri Leigh Miller, and Weiru Fang (all Restructuring).

Jun 28

2 min

D Magazine has named 10 Sidley lawyers to its annual “Best Lawyers in Dallas” list. Lawyers are nominated by their peers, then reviewed by an anonymous panel of lawyers and D Magazine’s editorial staff. Recognized Sidley lawyers are: Sara Garcia Duran Kelly M. Dybala Yolanda C. Garcia Lauren G. Grau William D. Howell Tara M. Lancaster S. Scott Parel Rakhee V. Patel Eric M. Winwood Angela C. Zambrano~~D Magazine has named 10 Sidley lawyers to its annual “Best Lawyers in Dallas” list. Lawyers are nominated by their peers, then reviewed by an anonymous panel of lawyers and D Magazine’s editorial staff. Recognized Sidley lawyers are: Sara Garcia Duran Kelly M. Dybala Yolanda C. Garcia Lauren G. Grau William D. Howell Tara M. Lancaster S. Scott Parel Rakhee V. Patel Eric M. Winwood Angela C. Zambrano

Apr 25

1 min