Prison Medical Company Fails to Settle Contested Bankruptcy (2)

Bankrupt prison medical company Tehum Care Services Inc. lost its bid for approval of a $54 million deal to resolve hundreds of personal injury suits.

Tehum, owned by Corizon Health Inc., is attempting to use a controversial legal technique known as the Texas Two-Step to resolve medical malpractice and other tort claims from current and former prisoners.

Judge Christopher Lopez of the US Bankruptcy Court for the Southern District of Texas said during a bench ruling Thursday that he was concerned about the deal’s money distribution to the claimants, many of whom are incarcerated.

Several non-bankrupt affiliates, including YesCare Corp., ...