hcm Doc#101 Filed 06/18/15 Entered 06/18/15 16:25:26 Main Document Pg 1 of 7

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1 hcm Doc#101 Filed 06/18/15 Entered 06/18/15 16:25:26 Main Document Pg 1 of 7 IN THE UNITED STATES BANKRUPTCY COURT FOR THE WESTERN DISTRICT OF TEXAS EL PASO DIVISION IN RE: EL PASO CHILDREN S HOSPITAL CORPORATION CASE NO DEBTOR. CHAPTER 11 EIN: ALAMEDA AVENUE EL PASO, TEXAS MOTION FOR AN ORDER PURSUANT TO FED. R. BANKR. PRO AUTHORIZING AND APPROVING SETTLEMENT AGREEMENT BETWEEN DEBTOR AND NAVIGANT HEALTHCARE CYMETRIX CORPORATION OF ADVERSARY NO A hearing will be conducted on this matter on July 14, 2015 at 9:30 a.m. (MT), 10:30 a.m. (CT) at U.S. Bankruptcy Court, 511 E. San Antonio Ave., 4th Floor, El Paso, Texas. If you object to the relief requested, you must respond in writing, specifically answering each paragraph of this pleading. Unless otherwise directed by the Court, you must file your response with the Clerk of the Bankruptcy Court in El Paso within 21 days from the date you were served with this pleading. You must serve a copy of your response on the person who sent you the notice; otherwise, the court may treat the pleading as unopposed and grant the relief. TO THE HONORABLE U.S. BANKRUPTCY JUDGE H. CHRISTOPHER MOTT: COMES NOW El Paso Children s Hospital Corporation ( Debtor ) and hereby moves this Court for entry of an order pursuant to Fed. R. Bankr. Pro. 9019, authorizing the Debtor to enter into a settlement agreement with Navigant Healthcare Cymetrix Corporation f/k/a Cymetrix Corporation ( Defendant ) and approving such settlement agreement as set forth in this motion (the Motion ) for the resolution of issues between the Debtor and the Defendant at issue in Adversary Proceeding No In support of the Motion, the Debtor respectfully represents as follows:

2 hcm Doc#101 Filed 06/18/15 Entered 06/18/15 16:25:26 Main Document Pg 2 of 7 I. BACKGROUND FACTS AND EVENTS 1. On May 19, 2015, (the Petition Date ), the Debtor filed its voluntary petition for relief under Chapter 11 of Title 11 of the United States Code ( Bankruptcy Code ). Pursuant to Bankruptcy Code 1107(a) and 1108, the Debtor is managing its affairs as debtors-inpossession. No trustee, committee, or examiner has been appointed. 2. On May 19, 2015, the Debtor filed its Complaint against the Defendant [Adv. Dckt. No. 1] seeking recovery pursuant to 547, 550, and 551 of the Bankruptcy Code, thus initiating Adversary Proceeding No ( Adversary Proceeding ). 3. In the Complaint, the Debtor alleged that the Defendant had obtained a Writ of Garnishment in its favor via the Order on Plaintiff s Pre-Judgment Writ of Garnishment ( Garnishment ) issued by the 362nd Judicial District Court, Denton County, Texas, in Cause No , Navigant Healthcare Cymetrix Corporation f/k/a Cymetrix Corporation v. El Paso Children s Hospital ( Denton County Suit ) during the preference period. Pursuant to the Garnishment, $988, in the Debtor s funds in a Wells Fargo, N.A. ( Wells Fargo ) bank account owned by the Debtor was garnished by the Defendant. In the Complaint, the Debtor alleged that the Garnishment was avoidable by the Debtor pursuant 547 of the Bankruptcy Code. The Debtor requested that the Garnishment be avoided and recovered by the Debtor pursuant to 547 and 550 of the Bankruptcy Code, and that the Garnishment be preserved for the benefit of the Debtor s estate pursuant to The Debtor and the Defendant have been engaged in settlement discussions and have now reached a settlement of this action. II. RELIEF REQUESTED 5. By this Motion, the Debtor seeks an order of this Court authorizing the Debtor to enter into a settlement agreement (the Settlement Agreement ) with the Defendant, and 2

3 hcm Doc#101 Filed 06/18/15 Entered 06/18/15 16:25:26 Main Document Pg 3 of 7 approving such Settlement Agreement for the resolution of all issues raised between the Debtor and the Defendant in the Adversary Proceeding. III. THE SETTLEMENT 6. The Settlement Agreement provides that the Garnishment will be released and the Adversary Proceeding will be dismissed. A copy of the proposed Settlement Agreement is attached hereto as Exhibit A. The Settlement Agreement provides generally that the Defendant will agree to entry of a proposed agreed judgment ( Agreed Judgment ) in a form substantially similar to the judgment in Exhibit A-1 hereto, which sets forth that the Garnishment will be dissolved. 7. The Settlement Agreement also provides that the Debtor, in exchange for the dissolution of the Garnishment, will dismiss the Complaint. 1 In addition, the Settlement Agreement preserves any rights that the Defendant may have pursuant to any timely filed proofs of claim it may file in the Debtor s bankruptcy case or that are listed in the Debtor s filed schedules. Pursuant to the Settlement Agreement, the Debtor and the Defendant will execute mutual releases. 8. Rule 9019 of the Federal Rules of Bankruptcy Procedure ( Bankruptcy Rules ) grants the Court authority to approve this settlement of claims and controversies after notice and a hearing. Specifically, Rule 9019 provides in pertinent part that [o]n motion by the trustee and after notice and a hearing, the court may approve a compromise or settlement. Under this authority, the Third Circuit has emphasized that to minimize litigation and expedite the administration of a bankruptcy estate, [c]ompromises are favored in bankruptcy. In re Martin, 91 F. 3d 389, 393 (3d Cir. 1996) (citations omitted). In addition, courts have recognized that the 1 Pursuant to Local Rule 9019(c)(2), a proposed agreed final judgment for entry in Adv. Pro. No is attached hereto as Exhibit A-1. 3

4 hcm Doc#101 Filed 06/18/15 Entered 06/18/15 16:25:26 Main Document Pg 4 of 7 approval of a proposed compromise and settlement is committed to the sound discretion of the bankruptcy court. See United States v. AWECO, Inc. (In re AWECO, Inc., 725 F.2d 293, 297 (5th Cir. 1984); Rivercity v. Herpel (In re Jackson Brewing Co.) 624 F.2d 599, (5th Cir. 1980) (decided under Bankruptcy Act). Settlements are considered a normal part of the process of reorganization and a desirable and wise method of bringing to a close proceedings otherwise lengthy, complicated and costly. Jackson Brewing, 624 F.2d at 602 (citations omitted). 9. Before approving a settlement under Bankruptcy Rule 9019, a court must determine whether the compromise is fair, reasonable, and in the interests of the estate. In re Marvel Entertainment Group, Inc., 222 B.R. 243, 249 (D. Del. 1998) (quoting In re Louise s, 211 B.R. 798, 801(D. Del. 1997)). To reach such a determination, the court must assess the value of the claim that is being settled and balance it against the value to the estate of the approval of the settlement. Martin, 91 F.3d at 393. In striking this balance, the court should consider the following factors: a. The probability of success in the litigation; b. The complexity, expense and likely duration of the litigation; c. The possibilities of collecting on any judgment which might be obtained; d. All other factors relevant to making a full and fair assessment of the wisdom of the proposed compromise; and e. Whether the proposed compromise is fair and equitable to the Debtors, their creditors, and other parties in interest. See Protective Comm. For Indep. Stockholders of TMT Trailer Ferry, Inc. v. Anderson, 390 U.S. 414, (1968). See also Martin, 91 F.3d at Basic to the process of evaluating proposed settlements is the need to compare the terms of the compromise with the likely rewards of litigation. TMT Trailer Ferry, 390 U.S. at 425. Generally, the role of the bankruptcy court in evaluating a proposed settlement is not to 4

5 hcm Doc#101 Filed 06/18/15 Entered 06/18/15 16:25:26 Main Document Pg 5 of 7 decide the issues in dispute, but rather, to determine whether the settlement is fair and equitable as a whole. Id. at 424; Watts v. Williams, 154 B.R. 56, 59 (S.D. Tex. 1993). In addition, the Fifth Circuit has specified two additional factors that bear on the decision to approve a proposed settlement. See Connecticut Gen. Life Ins. Co. v. United Cos. Fin. Corp. (In re Foster Mortgage Corp.), 68 F.3d 914, 917 (5th Cir. 1995). First, the court should consider the paramount interest of creditors with proper deference to their reasonable views. Id. Second, the court should consider the extent to which the settlement is truly the product of arms-length bargaining, and not of fraud or collusion. Id. at 918 (citations omitted). 11. The Debtor believes that the Settlement Agreement meets the above standards and is reasonable, fair, and equitable, as set out above. The Settlement Agreement is, in the business judgment of the Debtor, in the best interest of the Debtor s creditors and its estates. In making such a judgment, the Debtor has weighed the cost of further litigation and the likelihood of ultimate recovery in the Adversary Proceeding. Moreover, the Settlement Agreement is the product of arms-length negotiations between the Debtor and the Defendant. For all of these reasons, the Debtor believes that approval of the Settlement Agreement is in the best interest of the Debtor and the Debtor s creditors. WHEREFORE, PREMISES CONSIDERED the Debtor respectfully requests that this Court grant the relief requested herein; that the Court permit the Debtor to enter into the Settlement Agreement; and grant such other and further relief to the Debtor as is just and proper. Dated: June 18,

6 hcm Doc#101 Filed 06/18/15 Entered 06/18/15 16:25:26 Main Document Pg 6 of 7 Respectfully submitted, JACKSON WALKER L.L.P. 100 Congress Ave., Suite 1100 Austin, Texas (512) (512) FAX By: /s/ Jennifer F. Wertz Patricia B. Tomasco State Bar No (512) Direct Phone (512) Direct Fax ptomasco@jw.com Jennifer F. Wertz State Bar No (512) Direct Phone (512) Direct Fax jwertz@jw.com PROPOSED COUNSEL FOR DEBTOR 6

7 hcm Doc#101 Filed 06/18/15 Entered 06/18/15 16:25:26 Main Document Pg 7 of 7 CERTIFICATE OF SERVICE I hereby certify that on the 18th day of June 2015, a true and correct copy of the foregoing has been served electronically via the Court s CM/ECF electronic notification system, and via United States mail, postage prepaid, and upon the party listed below, and the parties listed on the attached service list. UNITED STATES TRUSTEE Kevin Epstein, Trial Attorney 615 E Houston Street, Room 533 San Antonio, Texas /s/ Jennifer F. Wertz Jennifer F. Wertz v /

8 hcm Doc#101-1 Filed 06/18/15 Entered 06/18/15 16:25:26 Exhibit A Pg 1 of 5 EXHIBIT A

9 hcm Doc#101-1 Filed 06/18/15 Entered 06/18/15 16:25:26 Exhibit A Pg 2 of 5 EXHIBIT A

10 hcm Doc#101-1 Filed 06/18/15 Entered 06/18/15 16:25:26 Exhibit A Pg 3 of 5 EXHIBIT A

11 hcm Doc#101-1 Filed 06/18/15 Entered 06/18/15 16:25:26 Exhibit A Pg 4 of 5 EXHIBIT A

12 hcm Doc#101-1 Filed 06/18/15 Entered 06/18/15 16:25:26 Exhibit A Pg 5 of 5 EXHIBIT A

13 hcm Doc#101-2 Filed 06/18/15 Entered 06/18/15 16:25:26 Exhibit A-1 Pg 1 of 3 IN THE UNITED STATES BANKRUPTCY COURT FOR THE WESTERN DISTRICT OF TEXAS EL PASO DIVISION IN RE: EL PASO CHILDREN S HOSPITAL CORPORATION CASE NO DEBTOR. CHAPTER 11 EIN: ALAMEDA AVENUE EL PASO, TEXAS EL PASO CHILDREN S HOSPITAL CORPORATION PLAINTIFF, ADV. PRO. NO V. DEFENDANT. NAVIGANT HEALTHCARE CYMETRIX CORPORATION FKA CYMETRIX CORPORATION, EXHIBIT A-1

14 hcm Doc#101-2 Filed 06/18/15 Entered 06/18/15 16:25:26 Exhibit A-1 Pg 2 of 3 AGREED JUDGMENT On this date, came on to be considered the above-entitled and numbered cause, wherein El Paso Children s Hospital Corporation ( Debtor or Plaintiff ) is the Plaintiff and Navigant Healthcare Cymetrix Corporation f/k/a Cymetrix Corporation ( Navigant ) is the Defendant. Having considered the agreement of the Plaintiff and the Defendant contained herein, as indicated by their respective signatures below, the Court is of the opinion that judgment should be entered against the Defendant. It is therefore: ORDERED, ADJUDGED, and DECREED that the Writ of Garnishment issued on February 26, 2015 ( Garnishment ) by the 362nd Judicial District Court, Denton County, Texas, in Cause No , Navigant Healthcare Cymetrix Corporation f/k/a Cymetrix Corporation v. Wells Fargo Bank, National Association v. El Paso Children s Hospital is hereby avoided by the Debtor pursuant to 547, 550, and 551 of the Bankruptcy Code and is hereby dissolved in its entirety; ORDERED, ADJUDGED, and DECREED that garnishee, Wells Fargo Bank, N.A. shall release all funds previously subject to the Garnishment within five (5) days of the date of entry of this Agreed Judgment to the Plaintiff in accordance with instructions received from the Debtor; and ORDERED, ADJUDGED, and DECREED that each party shall pay its costs in this case incurred; and it is further ORDERED, ADJUDGED, and DECREED that all other relief requested by any party to this Adversary Proceeding is denied with prejudice, it being the intent of the Court that this is a final judgment disposing of all claims by the parties to this Adversary Proceeding No ### EXHIBIT A-1

15 hcm Doc#101-2 Filed 06/18/15 Entered 06/18/15 16:25:26 Exhibit A-1 Pg 3 of 3 AGREED AS TO FORM: /s/ Jennifer F. Wertz JACKSON WALKER LLP Patricia B. Tomasco State Bar No Jennifer F. Wertz State Bar No Congress Avenue, Suite 1100 Austin, Texas ptomasco@jw.com jwertz@jw.com PROPOSED COUNSEL FOR THE DEBTOR /s/ Catherine A. Keith CATHERINE A. KEITH State Bar No catherine@attorneycook.com DARRELL W. COOK & ASSOCIATES A PROFESSIONAL CORPORATION One Meadows Building 5005 Greenville Ave, Suite 200 Dallas, TX (214) (214) Telecopy ATTORNEYS FOR DEFENDANT NAVIGANT HEALTHCARE CYMETRIX CORPORATION F/K/A/ CYMETRIX CORPORATION v / EXHIBIT A-1

16 hcm Doc#101-3 Filed 06/18/15 Entered 06/18/15 16:25:26 Proposed Order Pg 1 of 2 IN THE UNITED STATES BANKRUPTCY COURT FOR THE WESTERN DISTRICT OF TEXAS EL PASO DIVISION IN RE: EL PASO CHILDREN S HOSPITAL CORPORATION CASE NO DEBTOR. CHAPTER 11 EIN: ALAMEDA AVENUE EL PASO, TEXAS ORDER AUTHORIZING AND APPROVING SETTLEMENT BETWEEN DEBTOR AND NAVIGANT HEALTHCARE CYMETRIX CORPORATION OF ADVERSARY NO PURSUANT TO FED. R. BANKR. PRO CAME ON FOR CONSIDERATION the Motion for an Order Pursuant to Fed. R. Bankr. Pro Authorizing and Approving Settlement Agreement Between Debtor and Navigant Healthcare Cymetrix Corporation f/k/a Cymetrix Corporation of Adversary No ( Motion ) filed by El Paso Children s Hospital Corporation ( Debtor ); and the Court having reviewed the Motion and considered the main elements of the Settlement Agreement (as defined in the Motion) finds good cause for the relief granted herein. It is therefore ORDERED that the Motion is hereby granted in its entirety;

17 hcm Doc#101-3 Filed 06/18/15 Entered 06/18/15 16:25:26 Proposed Order Pg 2 of 2 ORDERED that the Debtor is authorized to enter into the Settlement Agreement with Navigant Healthcare Cymetrix Corporation f/k/a Cymetrix Corporation ( Defendant ); and ORDERED that, pursuant to Fed. R. Bankr. Pro. 9019, the Settlement Agreement is hereby approved. SUBMITTED BY: JACKSON WALKER L.L.P. 100 Congress Ave., Suite 1100 Austin, Texas By: /s/ Jennifer F. Wertz Patricia B. Tomasco State Bar No (512) Direct Phone (512) Direct Fax address: ptomasco@jw.com Jennifer F. Wertz State Bar No (512) Direct Phone (512) Direct Fax address: jwertz@jw.com PROPOSED COUNSEL FOR THE DEBTOR ### v /00008

18 hcm Doc#101-4 Filed 06/18/15 Entered 06/18/15 16:25:26 Service List Pg 1 of 2 TEXAS TECH UNIVERSITY 4800 ALBERTA EL PASO, TX MEDASSETS, INC. P.O. BOX ATLANTA, GA CARDINAL HLTH MED PROD & SVC P.O. BOX DALLAS, TX AMERISOURCE BERGEN DRUG CORP. P.O. BOX PASADENA, CA ACCREDO HEALTH GROUP, INC. P.O. BOX CHARLOTTE, NC CHILDREN'S HOSPITAL ASSOC. TX 823 CONGRESS AVE., SUITE 1500 AUSTIN, TX HILL ROM P.O. BOX PITTSBURGH, PA PROLACTA BIOSCIENCE, INC. 757 BALDWIN PARK BLVD. ATTN: ACCOUNTS RECEIVABLE CITY OF INDUSTRY, CA ABBOTT LABS P.O. BOX ATLANTA, GA DEPT OF HEALTH & HUMAN SER HHSC - ARTS P.O. BOX AUSTIN, TX NOVA BIOMEDICAL CORP. P.O. BOX BOSTON, MA INO THERAPEUTICS, LLC P.O. BOX FRONTAGE RD., 3RD FLOOR HAMPTON, NJ CERNER CORPORATION P.O. BOX KANSAS CITY, MO BUNNELL INCORPORATED 436 SOUTH LAWNDALE DR. SALT LAKE CITY, UT PASO DEL NORTE HIE 221 N. KANSAS ST., STE EL PASO, TX JOHNSON & JOHNSON/ETHICON 5972 COLLECTIONS CENTER CHICAGO, IL INTEGRA LIFESCIENCES SALES LLC P.O. BOX ATLANTA, GA STAPLES ADVANTAGE DEPT DAL P.O. BOX CHICAGO, IL TMHP FINANCIAL DEPARTMENT B RIATA TRACE PKWY SUITE 100 AUSTIN, TX SMITH AND NEPHEW, INC. P.O. BOX DALLAS, TX BECKMAN COULTER, INC. DEPT CH PALATINE, IL FEDERAL REPUBLIC OF GERMANY OFFICE OF DEFENSE ADMIN SUNRISE VALLEY DR. RESTON, VA KLS MARTIN L P P.O. BOX DALLAS, TX ABBOTT NUTRITION 75 REMITTANCE DR., STE 1310 CHICAGO, IL VAPOTHERM, INC. 22 INDUSTRIAL DRIVE EXETER, NH SUPERIOR HEALTH P.O. BOX 3000 FARMINGTON, MO AETNA US HEALTHCARE P.O. BOX LEXINGTON, KY 40512

19 hcm Doc#101-4 Filed 06/18/15 Entered 06/18/15 16:25:26 Service List Pg 2 of 2 BIOMET MICROFIXATION 75 REMITTANCE DR. SUITE 3283 CHICAGO, IL GULF COAST PHARMACEUTICAL PLU P.O. BOX 6704 GREENVILLE, SC SUTURE EXPRESS P.O. BOX KANSAS CITY, MO UMC OF EL PASO 4815 ALAMEDA AVE. EL PASO, TX CHRISTOPHER A. WARD POLSINELLI PC 222 DELAWARE AVENUE, SUITE 1101 WILMINGTON, DE JAMES H. BILLINGSLEY POLSINELLI, PC 2501 N HARDWOOD, SUITE 1900 DALLAS, TEXAS STRYKER ORTHOPAEDICS PURKEY & ASSOCIATES 5050 CASCADE RD., SE, SUITE A GRAND RAPIDS, MI UNITED STATES TRUSTEE KEVIN EPSTEIN, TRIAL ATTORNEY 615 E HOUSTON STREET, ROOM 533 SAN ANTONIO, TEXAS INTERNAL REVENUE SERVICE CENTRALIZED INSOLVENCY OFFICE PO BOX 7346 PHILADELPHIA, PA UNITED STATES ATTORNEY 700 E SAN ANTONIO, SUITE 200 EL PASO, TEXAS TEXAS WORKFORCE COMMISSION TEC BUILDING BANKRUPTCY 101 E. 15TH STREET AUSTIN, TEXAS Kimberly A. Walsh, Esq. Sherri K. Simpson, Paralegal Attorney General s Office Bankruptcy & Collections Division PO Box Austin, Texas UNITED STATES ATTORNEY GENERAL DEPARTMENT OF JUSTICE 950 PENNSYLVANIA AVENUE NW WASHINGTON, D.C HAL F. MORRIS ASHLEY F. BARTRAM CHRISTOPHER S. MURPHY TEXAS ATTORNEY GENERAL S OFFICE BANKRUPTCY & COLLECTIONS DIVISION PO BOX MC 008 AUSTIN, TEXAS Morton R. Branzburg, Esquire Klehr Harrison Harvey Branzburg, LLP 1835 Market Street, Suite 1400 Philadelphia, PA TEXAS COMPTROLLER OF PUBLIC ACCOUNTS REVENUE ACCOUNTING DIVISION BANKRUPTCY SECTION PO BOX AUSTIN, TEXAS LOUIS R. STRUBECK, JR. ELIZABETH N. BOYDSTON NORTON ROSE FULBRIGHT US LLP 2200 ROSS AVENUE, SUITE 3600 DALLAS, TEXAS Robert A. Simon Whitake Chalk Swindle & Schwartz, PLLC 301 Commerce Street, Suite 2500 Fort Worth, Texas v /00008