Tehum Liability Releases Draw Justice Department Objection

Prison health-care company Tehum Care Services Inc.'s bankruptcy plan would impermissibly grant liability releases without getting consent from its creditors, the Justice Department’s bankruptcy watchdog said in an objection.

Tehum’s proposed plan would release from liability a number of nonbankrupt entities, including its professionals. Creditors, including hundreds of prisoners suing the company for medical malpractice, would be deemed to consent to those liability releases if they don’t return paperwork indicating otherwise. The “opt-out” releases have been a frequent target of the US Trustee since it convinced the US Supreme Court to throw out nonconsensual releases in Purdue Pharma’s bankruptcy plan. ...