Powerful senators fire off letter decrying 'abusive' tactics in Corizon bankruptcy

Source: Business Insider

Powerful senators fire off letter decrying 'abusive' tactics in Corizon bankruptcy

Dakin Campbell,Nicole Einbinder
Wed, October 25, 2023 at 4:00 PM EDT·7 min read

• Nine US senators including Elizabeth Warren, Dick Durbin, and Bernie Sanders have sent a letter to Corizon leaders demanding answers on its bankruptcy.
• The letter says Corizon has sought "to manipulate bankruptcy law" and calls the strategy "abusive."
• Citing Insider's reporting, the senators gave Corizon two weeks to turn over details about its use of the Texas Two-Step to shield assets from creditors.

A powerful group of senators have pressed for answers about the bankruptcy of the private prison healthcare provider formerly known as Corizon Health.

In a letter sent Tuesday to executives of Corizon's successor companies — YesCare and Tehum Care Services — the lawmakers say Corizon employed an "abusive" bankruptcy strategy to avoid paying not just medical-malpractice lawsuits but also "bills for tens of millions of dollars' worth of goods and services provided to Corizon by hospitals, small businesses, and your own former employees."

The nine senators include Elizabeth Warren, Bernie Sanders, Cory Booker, Judiciary Committee chair Dick Durbin, and Finance Committee chair Ron Wyden. They raise questions in the seven-page letter about the company's "largely anonymous investors," the company's "obfuscation of its ownership structure," the assets it has transferred to "affiliated entities," and its attempts to escape liability for hundreds of medical-malpractice lawsuits filed by current and former prisoners.

"The bankruptcy system has many aims, but it was not designed to provide an avenue for companies to evade accountability for wrongdoing," the lawmakers write.

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Read more: https://finance.yahoo.com/news/powerful-senators-fire-off-letter-120001134.html