rdd Doc 16 Filed 08/07/17 Entered 08/07/17 14:12:41 Main Document Pg 1 of 16

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1 Pg 1 of 16 Marilyn Macron P.C. Marilyn Cowhey Macron (MM Beach 134th Street, 1st Floor Belle Harbor, NY Tel Fax marilyn@marilynmacron.com Hearing Date: Aug. 14, 2017 Time: 10:00 a.m. Attorneys for Defendant Central Coast Medical Oncology Corp. UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK In re: Chapter 11 21st CENTURY ONCOLOGY HOLDINGS, INC., I et al., Debtors. Case No (RDD (Jointly Administered CALIFORNIA RADIATION THERAPY MANAGEMENT SERVICES, INC., and U.S. CANCER CARE, INC., Adversary Proceeding No Plaintiffs, v. DIGNITY HEALTH ( d/b/a MARIAN REGIONAL MEDICAL CENTER; CENTRAL COAST MEDICAL ONCOLOGY CORP., Defendants. DEFENDANT CENTRAL COAST MEDICAL ONCOLOGY CORP.'S OBJECTION TO DEBTORS' MOTION FOR ENTRY OF AN ORDER EXTENDING THE AUTOMATIC STAY OR, IN THE ALTERNATIVE, GRANTING PRELIMINARY INJUNCTIVE RELIEF HALTING THE PROSECUTION OF THE DIGNITY HEALTH LITIGATION

2 Pg 2 of 16 TO: THE HONORABLE ROBERT D. DRAIN, UNITED STATES BANKRUPTCY mdge: Central Coast Medical Oncology Corp. ("CCMO", by and through its attorneys Marilyn Macron, P.C., opposes the Motion For Entry of An Order Extending The Automatic Stay Or, In The Alternative, Granting Preliminary And Permanent Injunctive Relief Halting The Prosecution Of The Dignity Health Litigation (the "Motion" filed by California Radiation Therapy Management Services, Inc. and U.S. Cancer Care, Inc. (the "Plaintiffs". BACKGROUND A. Through The Santa Maria, California Litigation, CCMO Is Seeking To Halt The Damage To Patient Care Caused By Non-Debtors. 1. The state court litigation at issue in the Motion ( the "Santa Maria litigation" seeks to stop non-debtor defendants from engaging in activities that raise serious concerns about patient care and are causing significant financial damage to CCMO. 2. On February 22, 2017, Dignity Health, doing business as Marian Regional Medical Center ("Dignity", filed its Complaint ("Dignity Complaint" in state court in Santa Maria, California (Case No. 17CV00920 against non-debtors Coastal Radiation Oncology Medical Group, Inc. ("Coastal", Case H. Ketting, M.D. ("Dr. Ketting", and Jeffrey K. Wu, M.D. ("Dr. Wu", 21st Century Oncology of California, Inc., and CCMO. See Plaintiffs' Verified Adversary Complaint to Extend Automatic Stay Or, In the Alternative, For Permanent Injunctive Relief ("Adversary Complaint", pp , Exhibit A (Dignity Complaint. Dignity owns the land on which the Mission Hope Cancer Center ("MHCC" is located. Among other things, Dignity brought suit to stop non-debtor defendants' violations of a ground lease. Id. at 30 (prayer of Dignity Complaint. 2

3 Pg 3 of On May 22, 2017, CCMO filed its Cross-Complaint ("Cross-Complaint" in the Santa Maria litigation against non-debtors 21st Century Oncology of California, Inc., Coastal, Dr. Ketting, and Dr. Wu. See Adversary Complaint, pp , Ex. B (Cross-Complaint. 4. CCMO is a provider of medical oncology and radiation oncology services at MHCC, a top-notch cancer center that integrates cutting-edge technology with a wide array of support services. Cross-Complaint,,r,r 12, 31. With the Cross-Complaint, CCMO seeks to put an end to non-debtors Coastal's, Dr. Ketting's, and Dr. Wu's practice of diverting patients away from MHCC to a facility in Lompoc, California in which the non-debtors have a financial interest, but which offers less advanced equipment than MHCC and no support services. Cross Complaint,,r 22. The Cross-Complaint also seeks to stop non-debtors from: concealing their transfer of patients to Lompoc by failing to update patient medical records; spending time at the Lompoc facility because it takes away from the time treating patients atmhcc; failing to inform patients that they have an interest in the Lompoc facility, in violation of California law; obstructing CCMO's attempt to expand the services offered at MHCC to include stereotactic brain radiation therapy, a cutting edge, but increasingly utilized, procedure. (Instead, non-debtors are referring patients to a facility in Thousand Oaks, California, another facility in which non-debtors have a financial interest; and transferring patient records (CCMO's confidential property to the Lompoc facility without authorization. See Cross-Complaint,,r,r 26-27, 34-35, 57-58, 60. 3

4 Pg 4 of Coastal's, Dr. Ketting's, and Dr. Wu's diversion of patients is also causing CCMO significant financial harm. CCMO estimates its damages to be more than $2,000, in connection with the wrongful conduct alleged in the Cross-Complaint. See, e.g., Cross- Complaint,,r,r 85, 107, Prayer. 6. In the Cross-Complaint, CCMO asks for a declaration that its contract with Coastal be terminated. (This is not a contract with Plaintiffs or any of the related debtors. In the Cross-Complaint, CCMO also asserts causes of action against non-debtors for breach of contract and the implied covenant of good faith and fair dealing, fraud, unfair competition, intentional interference with contractual relations, intentional interference with prospective business relations, and conspiracy. See Cross-Complaint,,r,r 19-20, 26-27, 29-30, 33-36, 57, 60-61,64-65,69,87, 102, Dignity's Complaint and CCMO's Cross-Complaint were filed before any bankruptcy petitions were filed. B. The Bankruptcy Proceedings Commence And 21st Century Oncology Of California Is Dismissed From The Santa Maria Litigation. 8. On May 25, 2017, 21st Century Oncology Holdings, Inc. and various other subsidiaries and affiliates filed for bankruptcy in the United States Bankruptcy Court for the Southern District of New York. But none of the parties to the Santa Maria litigation filed for bankruptcy. 9. On June 30, 2017, Plaintiffs filed the Adversary Complaint and Motion. Plaintiffs are seeking to stay the Santa Maria litigation. Among other documents, the Adversary Complaint attaches a Management Services Agreement, dated February 16, 2006 between debtor 4

5 Pg 5 of 16 U.S. Cancer Care, Inc. (a debtor in this chapter 11 and Coastal. See Adversary Complaint, pp Ex. D (the "Coastal MSA". 10. In the Motion, the Plaintiffs state that a stay is appropriate because 21st Century Oncology of California is "not a party to any of the Leases or MSAs referenced in the Complaints; rather Debtor USCC is the entity involved in the contractual arrangements at issue before the California State Court." Motion,, Similarly, in a filing in the Santa Maria litigation, counsel for 21st Century Oncology of California, Inc. represented that U.S. Cancer Care, Inc. (not 21st Century Oncology of California, Inc. was the proper party to the Santa Maria litigation, which appears to be confirmed by the documents attached to the Adversary Complaint. 12. Accordingly, on August 1 and 2, 2017, CCMO and Dignity filed Requests for Dismissal of 21st Century Oncology of California from the Santa Maria litigation. Declaration of Tim B. Henderson ("Henderson Deel.",,1,11-5. CCMO will soon file an Adversary Complaint in this bankruptcy proceeding to address the numerous problems with certain debtors' actions at MHCC. Namely, CCMO will ask the bankruptcy court to void a contract with debtor USCC on the grounds that it purports to require payments that are illegal under California law, and to fix its claim for contractual breaches, fraud and other tortious actions taken by certain debtors. RESPONSE I. THE COURT SHOULD NOT EXTEND THE AUTOMATIC STAY TO NON DEBTORS. 13. The automatic stay does not protect non-debtors Coastal, Dr. Ketting, and Dr. Wu, and the Court should not extend the stay to those entities. See Teachers Insurance and 5

6 Pg 6 of 16 Annuity Ass'n v. Butler, 803 F.2d 61, 65 (2d Cir ("It is well-established that stays pursuant to 362(a are limited to debtors and do not encompass non-bankrupt co-defendants.". 14. "[E]xtensions of the stay to protect non-debtor parties are the exception, not the rule, and are generally not favored. Thus, the movant must show by 'clear and convincing evidence' that extension of the stay is warranted." In re FPSDA I, LLC, No , 2012 WL , at *8 (Bankr. E.D.N.Y. Dec. 21, 2012, as corrected (Dec. 26, 2012 (citations omitted. Accordingly, "in keeping with the principle that extending the stay to non-debtors is extraordinary relief, the party seeking extension of the stay must put forth real evidence demonstrating an actual impact upon, or threat to, the reorganization efforts if the stay is not extended." Id. (citing Gray v. Hirsch, 230 B.R. 239, (S.D.N.Y A. Hypothetical Indemnity Obligations Between Debtors and Non-Debtors Are Insufficient To Warrant A Stay. 15. Plaintiffs argue the stay should be extended to non-debtors because the continued prosecution of the Santa Maria litigation could "potentially deplete" the Plaintiffs' assets because there is a hypothetical possibility that Plaintiffs (debtors might have to indemnify non-debtors in the Santa Maria litigation under the Coastal MSA. Motion,,r,r 7-9, 15; Adversary Complaint, Ex. D. The Court should reject this argument. 16. A mere possibility that Plaintiffs could have to indemnify non-debtors is insufficient to warrant a stay because it will not have "an immediate adverse economic consequence for the debtor's estate." In re FPSDA I, LLC, at *7, 11 (citing Queenie, Ltd. v. Nygard Int'l, 321 F.3d 282, (2d. Cir.2003 (denying injunction seeking to extend stay where no information provided about the cost or expense oflitigating if the case was not stayed; Jn re SDNY 19 Mad Park, LLC, No (ALG, 2014 WL , at *2 (Bankr. 6

7 Pg 7 of 16 S.D.N.Y. Sept. 11, 2014 ("The fact that a Debtor may have to indemnify a third-party is alone not a sufficient basis to extend the automatic stay to that party... " ( citations omitted. 17. Here, there is no "immediate adverse economic consequence" to the Plaintiffs' estate from the potential indemnity obligations. The Santa Maria litigation is still in the pleading stage, with several preliminary motions having been filed but not yet decided. As such, any judgment in the Santa Maria litigation that could possibly trigger indemnity obligations is far from certain or imminent. 18. Moreover, the indemnity provisions do not apply, and even if they did apply, they are conditional and limited. As a preliminary matter, the indemnification provision in the Coastal MSA applies to claims as a result of breaches of leases related to "Cancer Centers," but MHCC is not included within the definition of "Cancer Center." Ex. D to Adversary Complaint, Section 8.4, Amendment No. 4 (definition of "Cancer Center" does not include MHCC; Amendment No. 2 (same. The Motion also references an indemnification provision in an agreement between 21st Century Oncology of California and California Radiation Therapy Management Services, Inc. See Motion,,i 7; Adversary Complaint, Ex. C. That indemnification provision is irrelevant here because 21st Century Oncology of California has been dismissed from the Santa Maria litigation. Henderson Deel.,,i,i 4-5. Thus, the indemnity provisions do not apply. 19. The Motion also selectively cites portions of the indemnity provisions in the Coastal MSA (Motion,,i 9, but fails to mention the numerous limitations on the indemnity provisions. The Coastal MSA's indemnity provision does not apply if it could reduce insurance coverage and is not triggered until a party follows a written notice requirement and losses exceed 7

8 Pg 8 of 16 $50, Sections 8.4, 8.5 to Ex. D to Adversary Complaint. There has been no showing that any (let alone all of these conditions have been met. 20. Even assuming the indemnity obligations were triggered, the conditions were met, and Plaintiffs were required to indemnify non-debtors, the Plaintiffs fail to offer any evidence explaining or estimating the degree of harm to the reorganization or the estate. See Gucci Am., Inc. v. Duty Free Apparel, Ltd., 328 F. Supp. 2d 439, (S.D.N.Y (no stay extension where litigation did not "threaten serious risk to a reorganization in the form of immediate adverse economic consequences for the debtor's estate". The evidence that has been submitted suggests that any impact would be minimal. Indemnified parties would simply file proofs of claim in Plaintiffs' bankruptcy cases. The Motion notes that Plaintiffs are "the largest network of cancer treatment centers and affiliated physicians in the world" (Motion,,135, and have obtained $75,000, in post-petition financing (Motion,,129. Given the size and resources available to Plaintiffs, there is no evidence that the failure to stay the Santa Maria litigation against the non-debtors would seriously risk the reorganization or pose any immediate adverse consequences. 21. Therefore, the hypothetical indemnity claim is no reason to extend the stay. B. There Is No Identity Of Interests Between Plaintiffs and Non-Debtors Sufficient To Warrant A Stay. 22. The Plaintiffs claim that the case should be stayed because the non-debtor defendants "share an identity of interest with the debtor." This is not persuasive. See Motion,, A stay might be appropriate if "the debtor may be said to be the real party defendant and... a judgment against the third party defendant will in effect be a judgment or 8

9 Pg 9 of 16 finding against the debtor." A.H. Robins Co., Inc. v. Piccinin, 788 F.2d 994, 999 (4th Cir Plaintiffs cite to precedent exemplifying the classic case where a lawsuit against a debtor's officers or directors is brought after commencement of debtor's bankruptcy to avoid the stay. See, e.g., In re Congregation Birchos Yosef, 535 B.R. 629, 633 (Bankr. S.D.N.Y (litigation against non-debtor principals of debtor violated automatic stay where brought after debtor filed for bankruptcy; In re North Star Contracting Corp., 125 B.R. 368, (S.D.N.Y (injunction granted where case against non-debtor was directed at avoiding the automatic stay, non-debtor was president of debtor, and debtor was "required" to indemnify nondebtor; In re Lomas Financial Corp., 117 B.R. 64, (S.D.N.Y (same. This is not such a case. 24. Here, the Complaint and Cross-Complaint pre-date the bankruptcy filing. Thus, the Santa Maria litigation could not have been an attempt to end-run around the bankruptcy stay, because there was no bankruptcy stay when the Santa Maria case began. 25. Additionally, there is no evidence that non-debtors Coastal, Dr. Ketting, and Dr. Wu are crucial to Plaintiffs' reorganization, or even that they hold a position with a Debtor entity. Rather, documents submitted in support of the Motion actually demonstrate that Coastal, Dr. Ketting, and Dr. Wu are separate from Plaintiffs. See Coastal MSA, Section 11.2 (USCC and Coastal are independent contractors, not partners or parties to a joint venture. The Motion's vague statement that the "Debtors partner with the 21 C Physician Groups under the MSA Model" (see Motion,,r,r 1, 7-8, is insufficient to prove an identity of interest in light of the express contractual language disclaiming any such partnership. 26. Therefore, there is no identity of interest sufficient to warrant extending the stay to non-debtors Coastal, Dr. Ketting, and Dr. Wu. 9

10 Pg 10 of 16 C. The Possible Risk Of Adverse Rulings Is Insufficient To Warrant A Stay. 27. Plaintiffs also claim a stay is appropriate because, if the Santa Maria litigation continues, they will be at risk of "any adverse rulings made in their absence" and "disadvantaged" as a result. Motion,,i 24. This argument is also unpersuasive. 28. The Second Circuit is skeptical of the importance of collateral estoppel when considering a stay as to a non-debtor. See Queenie, Ltd. v. Nygard Int'!, 321 F.3d 282, 288 (2d Cir ("We have not located any decision applying the stay to a non-debtor solely because of an apprehended later use against the debtor of offensive collateral estoppel or the precedential effect of an adverse decision. If such apprehension could support application of the stay, there would be vast and unwarranted interference with creditors' enforcement of their rights against non-debtor co-defendants."; In re Capitale Ventures I, LLC, No (ALG, 2014 WL , at *1-2 (Bankr. S.D.N.Y. July 21, 2014 (denying stay as to individual non-debtor because "possibility that a decision in the... litigation will be precedential or preclusive in litigation against the defendants is not enough". 29. Cases cited by Plaintiffs regarding collateral estoppel demonstrate that the issue is part and parcel of the concern regarding distracting key personnel. In re Lomas Financial Corp., 117 B.R. 64 (S.D.N.Y (collateral estoppel relevant because debtor's "high level" personnel (in particular, the non-debtor defendants would have to divert resources to defend against suit against non-debtors; In re Lion Capital Group, 44 B.R. 690, (Bankr. S.D.N.Y (injunction granted in light of "the risk of collateral estoppel, [ and] the consequent drain on the debtor's resources through having to monitor or perhaps participate in other actions," including discovery likely to be directed to bankruptcy trustee. As discussed 10

11 Pg 11 of 16 above, there is no evidence that non-debtors Coastal, Dr. Ketting, or Dr. Wu hold any position whatsoever with any debtor, let alone a key position in the reorganization. 30. Therefore, the stay should not be extended because of the risk of an adverse ruling as to non-debtors. C. CCMO Will File An Adversary Complaint Against USCC. 31. Finally, the Motion requests a stay because it claims the Santa Maria litigation will adjudicate issues involving Debtor USCC' s estate. Motion,,r,r The Court should not grant a stay on this ground, because CCMO will shortly be filing an adversary complaint against certain debtors in this bankruptcy proceeding, including to seek a determination in this bankruptcy court that a contract with Debtor USCC that purports to require CCMO to pay a fee that is illegal under California law is void, and even if not void, the debtors cannot assume this contract because USCC cannot cure the defaults as required under 11 U.S.C. 365(b(l(A ("the trustee [USCC] may not assume such contract or lease unless, at the time of assumption of such contract or lease, the trustee cures, or provides adequate assurance that the trustee will promptly cure, such default... ". 33. Thus, there is no reason to stay the Santa Maria litigation. II. THE COURT SHOULD NOT GRANT INJUNCTIVE RELIEF TO BAR FURTHER PROSECUTION OF THE SANTA MARIA LITIGATION. 34. Plaintiffs also seek to halt the Santa Maria litigation through an injunction under section 105 of the Bankruptcy Code. The Court should not grant an injunction. 35. In order to grant a preliminary injunction under 11 U.S.C. 105, "[t]he first requirement is that there be danger of imminent, irreparable harm to the estate or the debtor's ability to reorganize. Second, there must be a reasonable likelihood of a successful 11

12 Pg 12 of 16 reorganization. Third, the court must balance the relative harm as between the debtor and the creditor who would be restrained. Fourth, the court must consider the public interest; this requires a balancing of the public interest in successful bankruptcy reorganizations with competing societal interests." In re Capitale Ventures I, LLC, No (ALG, 2014 WL , at *2 (Bankr. S.D.N.Y. July 21, Extensions of the stay "are the exception rather than the rnle... " Millard v. Developmental Disabilities Inst., Inc., 266 B.R. 42, 45 (E.D.N.Y Here, the public interest favors CCMO, the balance of harms counsels against a stay, and there is no irreparable harm to Plaintiffs. The Court should not grant an injunction. A. The Public Interest And Balance Of Harms Counsel Against A Stay. 37. A preliminary injunction should be denied because the public interest and balance of harms favor CCMO and counsel against staying the Santa Maria litigation. 38. CCMO will suffer significant harm if the Santa Maria litigation is stayed because that will delay resolution of the following key issues affecting patient care at MHCC. 39. First, in the Santa Maria litigation, CCMO is seeking to stop the improper diversion of its patients to the Lompoc facility, in which non-debtors Coastal, Dr. Ketting, and Dr. Wu have a financial interest. Cross-Complaint,,r,r The Lompoc facility has less advanced equipment and none of the support services offered at MHCC. In order to accomplish this diversion, non-debtors are copying patient records without authorization, failing to include consultation notes on patients diverted away, and devoting insufficient time to patients at MHCC. Declaration of Robert Dichmann, M.D. ("Dichmann Deel.",r,r 1-6; Cross-Complaint,,r,r 27, 29, 31, These actions pose significant patient care problems that will continue indefinitely if a stay is granted. 12

13 Pg 13 of Second, the Santa Maria litigation seeks to update the equipment available at MHCC to include a cutting edge, but increasingly utilized procedure known as stereotactic brain radiation therapy. Contrary to their contractual obligations, non-debtors have failed to assist in the updating of the equipment offered at MHCC. Dichmann Deel.,r,r 1-5, 7; Cross-Complaint,,r,r 57, 58, If the Santa Maria litigation is stayed, CCMO will be unable to update the equipment available at MHCC, forcing cancer patients to travel for this necessary care. 41. A stay of the Santa Maria litigation will leave the status quo - and the problems with patient care that the litigation seeks to remedy - in place indefinitely. Thus, a stay is not in the public interest. 42. Additionally, a stay of the Santa Maria litigation will also cause significant financial harm to Central Coast, which has been damaged in excess of $2 million as a result of actions complained of in the Cross-Complaint. Cross-Complaint,,r,r 85, 107, Prayer. A stay will mean that this harm will continue unabated. 43. In contrast to the concrete harm that will be suffered by CCMO, Plaintiffs offer unsubstantiated speculation. Plaintiffs argue the balance of harms favors them because they will be required to "focus time and resources in connection with the defense of' the Santa Maria litigation. Motion,,r 33. As discussed above, there is not even an estimate of the amount of time, effort, or money that Plaintiffs anticipate will be consumed by the Santa Maria litigation. There is also no evidence regarding the impact that the Santa Maria litigation will have on any of the decision makers involved in the re-organization. Millard v. Developmental Disabilities Inst., Inc., 266 B.R. 42, 44 (E.D.N.Y (citations omitted (stating that "whether continuation of outside litigation would so distract individuals important to the reorganization process as to impede the reorganization effort" is a factor to consider in whether to extend stay. 13

14 Pg 14 of Moreover, the Plaintiffs offer no support for the claim that the time spent by non- debtors Dr. Ketting and Dr. Wu in defending themselves in the Santa Maria litigation is evidence that the balance of harms favors Plaintiffs. To the contrary, in this situation, the extension of the stay to non-debtors "would work a hardship on plaintiffs by giving 'unwarranted immunity' to solvent defendants... " Millard, 266 B.R. at 44 ( citations omitted. stay. 45. Therefore, the public interest and balance of harms weigh against extending the B. There Is No Showing Of Irreparable Harm If The Santa Maria Litigation Is Allowed To Proceed. 46. The requested injunction should also be denied because there is no evidence of a danger of imminent, irreparable harm to the estate or the Plaintiffs' ability to re-organize. 47. Plaintiffs simply claim that the Santa Maria litigation ''threatens to deplete the assets of the Debtors' estates, distract key physicians of the Debtors, directly affect property of the estates, and put the Debtors at a disadvantage in future litigation." Motion,,r 32. The Plaintiffs also claim that Dr. Ketting, and Dr. Wu will have to spend time defending themselves in the Santa Maria litigation "taking their valuable time and efforts away from the Debtors businesses." Motion,,r Again, Plaintiffs' bold pronouncements are unsupported by evidence (or estimates and lack any specificity about the materiality or immediacy of any threat to the re- organization. There is no evidence regarding the amount of assets at risk or the significance of those assets to the re-organization. Given the massive size of the Plaintiffs' business, it is far from certain that the Santa Maria litigation is of material financial concern to the Plaintiffs. The Plaintiffs also fail to explain what role, if any, the non-debtors Coastal, Dr. Ketting, and Dr. Wu 14

15 Pg 15 of 16 play in the re-organization process. Even if they did play a role in the re-organization, many cases against non-debtor officers and directors of debtors, who have responsibilities in the reorganization, are not stayed. See Gray, 230 B.R. at 242 (collecting cases. 49. Given the lack of evidence regarding the materiality of the Santa Maria litigation and the importance of non-debtors defendants to the re-organization, this case differs significantly from other cases cited by Plaintiffs. See A.H. Robins Co., 788 F.2d at 1008 (injunction granted against "thousands" of cases that would "frustrate[], if not permanently thwart[]" reorganization; In re Lomas Financial Corp., 117 B.R. 64, (S.D.N.Y (injunction granted to halt case filed against non-debtor officers of debtor who were "chairman of the task force assigned to developing a reorganization plan" and "involved heavily in the reorganization effort"; In re Calpine Corp.,365 B.R. 401, (S.D.N.Y (irreparable harm found where "key" personnel to restructuring was already doing work of 10 former employees and would be heavily involved in future litigation; Hawaii Structural Jronworkers v. Calpine Corp., 2006 WL , at *4 (S.D.N.Y (injunction granted where "specifically identified individuals... would be heavily involved in both the reorganization process and in responding to" state court action. 50. Therefore, the injunction should be denied because a stay is not "necessary to protect the debtor's reorganization," and the Santa Maria litigation is not "sufficiently likely to have a material effect upon... reorganization efforts."" Gray, 230 B.R. at 243 (citation omitted; see also Millard, 266 B.R. at 45 ( denying injunction where non-debtor defendant had a 15

16 Pg 16 of 16 role in re-organization but would not require "inordinate amount of time" and potential recovery would not "substantially deplete estate" ( citation omitted.' C. It Is Too Early To Tell Whether Plaintiffs Have A Reasonable Likelihood To Reorganize. 51. Given that this case is in the very early stages, it is impossible to surmise the probability that the Plaintiffs will reorganize successfully. Given that, CCMO suggests that this factor is not entitled to significant weight. 52. Therefore, the request for injunctive relief should be denied. WHEREFORE, CCMO respectfully requests that the Court deny the Motion. Dated: August 7, 2017 Belle Harbor, NY Marilyn Macron P.C. Attorneys for Central Coast Medical Oncology Corp. By: Isl Marilyn Cowhey Macronc.. ~ ~, f., ~ G V'/ Ci.- c:..-i. Marilyn Cowhey Macron (MM Beach 134th Street, 1st Floor Belle Harbor, NY Tel Fax To the extent there is a limited exception to the irreparable harm requirement in the Second Circuit where the action to be enjoined threatens the reorganization or would impair the court's jurisdiction, that exception does not apply here. See Motion,,i 30. As shown above, there is no evidence that the Santa Maria litigation threatens the reorganization and the Court's jurisdiction is not at risk because CCMO will pursue claims against certain Debtors in the bankruptcy proceeding, not the Santa Maria litigation. 16

17 rdd Doc 16-1 Filed 08/07/17 Entered 08/07/17 14:12:41 Declatation of Robert Dichmann MD Pg 1 of 3 Marilyn Macron P.C. Marilyn Cowhey Macron (MM Beach 134th Street, 1st Floor Belle Harbor, NY Tel Fax marilyn@marilynmacron.com Attorneys for Defendant Central Coast Medical Oncology Corp. UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK In re: 21 st CENTURY ONCOLOGY HOLDINGS, INC., et al., Debtors. Chapter 11 Case No (RDD (Jointly Administered CALIFORNIA RADIATION THERAPY MANAGEMENT SERVICES, INC., and U.S. CANCER CARE, INC., Plaintiffs, Adversary Proceeding No v. DIGNITY HEALTH (d/b/a MARIAN REGIONAL MEDICAL CENTER; CENTRAL COAST MEDICAL ONCOLOGY CORP., Defendants. DECLARATION OF ROBERT DICHMANN, M.D. IN SUPPORT OF DEFENDANT CENTRAL COAST MEDICAL ONCOLOGY CORP. S OBJECTION TO DEBTORS MOTION FOR ENTRY OF AN ORDER EXTENDING THE AUTOMATIC STAY OR, IN THE ALTERNATIVE, GRANTING PRELIMINARY INJUNCTIVE RELIEF HALTING THE PROSECUTION OF THE DIGNITY HEALTH LITIGATION 1

18 rdd Doc 16-1 Filed 08/07/17 Entered 08/07/17 14:12:41 Declatation of Robert Dichmann MD Pg 2 of 3 I, Robert Dichmann, M.D., declare as follows: 1. I submit this declaration in support of Defendant Central Coast Medical Oncology Corp. s ( CCMO Objection to Debtors Motion For Entry Of An Order Extending The Automatic Stay Or, In The Alternative, Granting Preliminary And Permanent Injunctive Relief Halting The Prosecution Of The Dignity Health Litigation (the Motion. I have personal knowledge of the matters stated in this declaration, and if called upon to testify, could and would testify thereto. 2. I am a medical oncologist who practices at Mission Hope Cancer Center in Santa Maria, California. I am also the President of Defendant CCMO. 3. As a practicing doctor, my foremost concern is taking care of patients. I am submitting this declaration to ask the Court to permit CCMO to continue to pursue its Cross- Complaint against non-debtors Coastal Radiation Oncology Medical Group, Inc. ( Coastal, Case H. Ketting, M.D. ( Dr. Ketting, and Jeffrey K. Wu, M.D. ( Dr. Wu in the state court action Dignity Health v. Coastal Radiation Oncology Medical Group, Inc., et al., Case No. 17CV00920 (the Santa Maria litigation. There are important patient care issues at stake in the Santa Maria litigation, and staying the case would leave these problems in place indefinitely. 4. CCMO filed its Cross-Complaint in the Santa Maria litigation to prevent issues with patient care that are being caused by non-debtors Coastal, Dr. Ketting, and Dr. Wu. 5. In particular, the Cross-Complaint seeks to put an end to non-debtors Coastal, Dr. Ketting, and Dr. Wu s practice of diverting patients away from MHCC to a facility in Lompoc, California (the Lompoc facility. The Lompoc facility has less advanced equipment than the equipment provided at MHCC. The Lompoc facility also offers none of the support services offered at MHCC. 2

19 rdd Doc 16-1 Filed 08/07/17 Entered 08/07/17 14:12:41 Declatation of Robert Dichmann MD Pg 3 of 3 6. Through my usual custom and practice of following the progress of CCMO s patients during the course of their treatments, I have discovered several CCMO patients that have been diverted to the Lompoc facility by Coastal, Dr. Ketting, and Dr. Wu. In doing so, Coastal, Dr. Ketting, and Dr. Wu have transferred patient records without authorization, failed to include consultation notes on patients diverted away, and devoted insufficient time to patients at MHCC. 7. The Santa Maria litigation also seeks to update the equipment available at MHCC to include a cutting edge, but increasingly utilized, procedure known as stereotactic brain radiation therapy. Adding this therapy would be consistent with CCMO s mission of providing the best possible care to patients. I repeatedly asked for this therapy to be added to the services provided at MHCC, but when it was not, CCMO was forced to bring its Cross-Complaint in the Santa Maria litigation to do so. Coastal, and in particular Dr. Ketting, have also failed to ensure that a radiation machine at MHCC receives regular software updates that would permit the addition of SBRT. Pursuant to 28 U.S.C. 1746, I declare under penalty of perjury that the foregoing statements are true and correct. August 7, 2017 Santa Maria, California Robert Dichmann, M.D. 3

20 rdd Doc 16-2 Filed 08/07/17 Entered 08/07/17 14:12:41 Declaration of Tim Henderson Esq. Pg 1 of 2

21 rdd Doc 16-2 Filed 08/07/17 Entered 08/07/17 14:12:41 Declaration of Tim Henderson Esq. Pg 2 of 2

22 rdd Doc 16-3 Filed 08/07/17 Entered 08/07/17 14:12:41 Affidavit of Service Pg 1 of 4 Marilyn Cowhey Macron (Marilyn@marilynmacron.com MARILYN MACRON, P.C. 211 Beach J34th Street, First Floor Belle Harbor, N.Y., Telephone: ( Facsimile: ( Counsel to Central Coast Medical Oncology Corp. UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK ~~~~~~~~~~~~~~~~~~~- In re: 21st CENTURY ONCOLOGY HOLDINGS, INC., et al., Debtors. ~~~~~~~~~~~~~~~~~~~ CALIFORNIA RADIATION THERAPY MANAGEMENT SERVICES, INC.; AND U.S. CANCER CARE, INC., v. ~~~~~~~~~~~~~~~~~~~ Plaintiffs, DIGNITY HEAL TH ( d/b/a MARIAN REGIONAL MEDICAL CENTER and CENTRAL COAST MEDICAL ONCOLOGY CORP. Defendants Chapter 11 l Case No RDD (Jointly Administered Adv. Proc. No RDD AFFIDAVIT OF SERVICE On August 7, 2017, I caused to be served Central Coast Medical Oncology Corp.'s Objection To Debtors' Motion For Entry Of An Order Extending The Automatic Stay, Or In The Alternative, Granting Preliminary Injunctive Relief Halting The Prosecution Of The Dignity Health Litigation And Supporting Declarations electronically upon the service list attached

23 rdd Doc 16-3 Filed 08/07/17 Entered 08/07/17 14:12:41 Affidavit of Service Pg 2 of 4 EXHIBIT A Eric Fisher efisher@binderschwartz.com, docket@binderschwartz.com, tharvey@binderschwartz.com Christopher Marcus Alexandra.schwarzman@kirkland.com; Christopher.kochman@kirkland.com; laura.saal@kirkland.com; bfriedman@kirkland.com; gene.goldmintz@kirkland.com

24 rdd Doc 16-3 Filed 08/07/17 Entered 08/07/17 14:12:41 Affidavit of Service Pg 3 of 4 hereto as Exhibit A and via Regular Mail upon the service lis1a-ttached hereto as Exhibit B: J,(;u~ Dated: August 7, 2017 State of New York County of Queens Peter Schwartz Subscribed and sworn to before me this 7th day of August, 2017 by Peter Schwartz, proved to me based on satisfactory evidence to be the person who appeared before me. Signature: C CJ a., ' t( '--' c t; ( I /AAR.JLYI ~ l!.acrol--1 No!ary Public, State of i'-lew York No. 02MA Qualified in Queens Cc "J Commission Expires Dec. 2c-,.LO l

25 rdd Doc 16-3 Filed 08/07/17 Entered 08/07/17 14:12:41 Affidavit of Service Pg 4 of 4 Exhibit B Kurtzman Carson Consultants LLC 2335 Alaska Avenue El Segundo, SA 90245