CASE SUMMARY: Envision, AmSurg File Ch. 11 to Complete Business Breakup Started by April 2022 Unsub Transaction, Equitize Debt; Envision Uptier Participating Lenders, AmSurg 2L Lenders Control Reorganized Equity Under Dual RSAs

 

Representatives
Role	Name	Firm	Location
Debtors’ Co-Counsel	Edward O. Sassower Joshua A. Sussberg Nicole L. Greenblatt Anne G. Wallice Joshua Greenblatt Jeffrey R. Goldfine Margaret Reiney	Kirkland & Ellis	New York
	John R. Luze Anne I. Salomon William E. Arnault Casey McGushin Annie L. Dreisbach Ruth Mulvihill		Chicago
Debtors’ Co-Counsel	Matthew D. Cavenaugh Rebecca Blake Chaikin Vienna Anaya Javier Gonzalez	Jackson Walker	Houston
Debtors’ Co-Counsel	N/A	Katten Muchin Rosenman	N/A
Debtors’ Investment Banker	N/A	PJT Partners	N/A
Debtors' Restructuring Advisor	Dennis Stogsdill	Alvarez & Marsal	New York
Debtors' Tax Advisor	N/A	KPMG	N/A
Co-Counsel to Citibank, as ABL Agent	Eli J. Vonnegut Gene S. Goldmintz	Davis Polk & Wardwell	New York
Co-Counsel to Citibank, as ABL Agent	Timothy A. Davidson II Ashley L. Harper Philip M. Guffy	Hunton Andrews Kurth	Houston
Co-Counsel to Citibank, as ABL Agent	N/A	Davis Wright Tremaine	N/A
Financial Advisor to Citibank, as ABL Agent	N/A	FTI Consulting	N/A
Co-Counsel to the  AmSurg RCF Agent	N/A	Porter Hedges	N/A
Financial Advisor to the AmSurg RCF Agent	N/A	BRG	N/A
Co-Counsel to the Consenting AmSurg 1L Term Lenders	Emil A. Kleinhaus Joshua A. Feltman John R. Sobolewski Angela K. Herring	Wachtell Lipton Rosen & Katz	New York
Co-Counsel to the Consenting AmSurg 1L Term Lenders	Paul E. Heath Matthew W. Moran Michael A. Garza	Vinson & Elkins	Houston
Co-Counsel to the Consenting AmSurg 2L Term Lenders	Dennis Dunne Samuel Khalil Michael Price	Milbank	New York
Co-Counsel to the Consenting AmSurg 2L Term Lenders	N/A	Ducera Partners	N/A
Special Counsel to the Consenting AmSurg 2L Term Lenders	N/A	McGuireWoods	N/A
Co-Counsel to the Ad Hoc 1L Group	Scott J. Greenberg Jason Zachary Goldstein Keith R. Martorana David M. Feldman Mary Beth Maloney C. Lee Wilson	Gibson, Dunn & Crutcher	New York
Co-Counsel to the Ad Hoc 1L Group	John D. Cornwell	Munsch Hardt Kopf & Harr	Houston
Financial Advisor to the Ad Hoc 1L Group	N/A	Evercore	N/A
Financial Advisor to the Ad Hoc 1L Group	N/A	AlixPartners	N/A
Counsel to the EVPS Term Loan Facility Agent	Todd C. Meyers Gianfranco Finizio	Kilpatrick Townsend & Stockton	New York
	Daniel F. Shank		Houston
Co-Counsel to KKR	Jacob A. Adlerstein Brian Bolin Brian S. Hermann Karen R. Zeituni	Paul, Weiss	New York
Co-Counsel to KKR	Jason L. Boland Bob B. Bruner Maria Mokrzycka	Norton Rose Fulbright	Houston
U.S. Trustee	Ha Minh Nguyen	Office of the U.S. Trustee	Houston
Debtors' Claims Agent	Benjamin J. Steele	Kroll	New York

Background

According to the first day declaration of CRO Keglevic, Envision “provides physician services to hospitals and health systems and serves as an operator of ambulatory surgical centers in partnership with physicians and other healthcare providers across the United States.” The company employs or partners with more than 21,000 clinicians that handle nearly 30 million patient visits per year, Keglevic says.

Envision was formed by a merger of Envision Healthcare Holdings Inc. and AmSurg Corp. in 2016. The resulting company was acquired by affiliates of KKR in 2018 in a transaction that valued the business at approximately $9.9 billion. KKR continues to hold 99.67% of the equity in parent debtor Enterprise Parent Holdings Inc., plus approximately $146 million in second-out and third-out Envision term loans and approximately $253 million in senior notes.

The debtors’ business is broken down into two segments: Envision Physician Services, which “provides management services to affiliated medical groups and physician practices,” and AmSurg, “the owner and operator of certain ambulatory surgery centers in partnership with physicians and other healthcare providers.”

Keglevic provides the following simplified organizational chart for the debtors:
 
A detailed organizational chart is available HERE.

Operational Issues

According to Keglevic, in recent years the debtors have faced a number of operational challenges and headwinds, including:
 

• COVID-19 pandemic: Keglevic says that Envision’s emergency medicine clinicians and anesthesiologists “experienced sharp, overwhelming, and localized surges of COVID-19 patients early in the pandemic,” putting “incredible stress on the clinical teams.” Outside of emergency medicine, “Envision lost 65 to 70% of patient visits - and associated revenue - as the country moved to variations of shelter-in-place policies over several months.”
   
• No Surprises Act: The federal No Surprises Act ended the practice of “balance billing,” or “billing patients directly when health insurers underpay or refuse to pay the full cost of delivering care.” Keglevic says “the regulatory implementation of the No Surprises Act has been highly flawed,” shifting the power dynamic in payment disputes “too far in the favor of insurance companies.” According to Keglevic, some payors “have used the No Surprises Act and its implementing regulations as an excuse to avoid payment to medical groups like Envision and affiliated entities” and “have aggressively denied, delayed, and reduced payment terms, often below the direct cost of delivering care.” The arbitration process created by Congress to resolve these disputes “has proved highly ineffective,” Keglevic maintains.
   
• Payor activism: Keglevic says that Envision’s largest payor, UnitedHealthcare, has reduced total reimbursement “by nearly 60% over the past five years, resulting in a revenue decline of more than $400 million.” According to Keglevic, UHC payments “are on average 40-50% below third-party benchmarks and well below the direct cost of delivering care.” Keglevic says Envision “is currently winning more than 80% of cases submitted to the federal arbitration panel” over UHC billings.
   
• Labor costs and inflationary pressures: The Covid-19 pandemic “created significant upward pressure on clinician wages and salaries, along with the general inflationary pressure increasing the cost of equipment and other supplies necessary to run Envision’s ambulatory surgery centers,” Keglevic says. “Increases to clinician wages and premium labor spend to ensure all facilities were adequately staffed totaled approximately $330 million annually as compared to 2019 spend.”
   

In order to address these issues, Keglevic says, the debtors “secured more than $300 million in one-time savings efforts” and sold non-strategic assets for approximately $280 million, among other things. In late 2021, the debtors retained Kirkland & Ellis, PJT Partners and Alvarez & Marsal North America “to explore potential liquidity-enhancing and deleveraging transactions.”

April to August 2022 Liability Management Transactions

In the absence of an agreed transaction with all lenders, Keglevic says, Envision turned to lenders “primarily interested in funding additional debt secured by the AMSURG segment of the business.” In April 2022, Envision designated entities owning interests in surgical centers comprising approximately 83% of AmSurg EBITDA as unrestricted subsidiaries, leaving entities comprising 17% of the AmSurg business behind at Envision “[t]o remain in strict compliance with the relevant debt documents.” Envision raised $1.1 billion in new-money first lien debt secured by the unrestricted AmSurg assets and exchanged approximately $2 billion in existing debt into approximately $1.4 billion in AmSurg second lien debt, “resulting in the capture of approximately $600 million in discount.”

“As a result of the AMSURG second lien exchange transactions, AmSurg, LLC extended a $1.4 billion intercompany term loan to Envision Healthcare Corporation, which remains outstanding today,” Keglevic adds.

In August 2022, the Envision business undertook an uptier exchange “with previously non-participating term lenders” whereby the participating lenders contributed $300 million in new money (the first-out Envision term loans) and converted $3.7 billion of existing term loans into second-out and third-out tranches. The remaining non-participating loans became the fourth-out tranche.

Keglevic provides the following chart summarizing the effect of these liability management transactions:
 
“The transactions were designed to provide runway to allow health plan revenue to normalize and time to address industry headwinds and continue operations through 2025 without interruption,” Keglevic says.

Post-Liability Management Discussions

“Regrettably,” Keglevic says, the company “has determined that it faces an insurmountable mismatch between its cash generation from operations and its balance sheet and fixed costs” despite the liability management transactions. Accordingly, in late 2022 the company decided to enter into negotiations with creditors for a “comprehensive deleveraging transaction” to “right-size the Company’s balance sheet, and rationalize its operations and structure.”

In March 2023, Envision and KKR initiated discussions with AmSurg second lien lenders, an ad hoc group of Envision term lenders and an ad hoc group of unsecured noteholders. These efforts have resulted in the two RSAs for Envision and AmSurg, under which Envision would sell the 17% of AmSurg EBITDA remaining at Envision to AmSurg for $300 million plus a waiver of intercompany debt (including the $1.4 billion intercompany loan resulting from the April 2022 transaction).

Additionally, all outstanding Envision term loans would be equitized or canceled, AmSurg second lien debt would be equitized, revolving debt and AmSurg first lien loans would be paid off or refinanced and Envision unsecured funded debt creditors would receive warrants if they vote to accept the plan.

“Following the restructuring, the AMSURG and Physician Services businesses will be separately owned by the holders of AmSurg Second Lien Term Loans and Envision Term Loans, respectively,” Keglevic concludes. “Overall, these transactions will result in a deleveraging of approximately $7.4 billion, including secured intercompany loans.”

Envision Restructuring Support Agreement / Term Sheet

The Envision, or EVPS, RSA contemplates a sale of the Envision debtors’ equity interests in AmSurg debtors owning ambulatory surgery centers to the reorganized AmSurg HoldCo, or Amsurg parent, for $300 million in net cash. The sale would be effectuated through a chapter 11 plan and consummated on the plan effective date. The sale proceeds would fund reorganized Envision operations, distributions to secured lenders and other disbursements under the plan.

The share purchase agreement would be included in the plan supplement. The RSA contemplates a $20 million breakup fee payable by the Envision debtors if they consummate an alternative transaction, which “must provide for at least $498.5 million in aggregate net proceeds for the EHC AmSurg Debtors to be considered higher and better” than the original offer.

Under the Envision RSA, on the plan effective date the reorganized Envision parent would issue new common stock to holders of Envision first- and second-out term loan claims, subject to dilution by the management incentive plan and new warrants (discussed below). The RSA term sheet specifies that the amount of allowed first-out term loan claims would include the full amount of a prepayment premium under the term loan credit agreement.

If Class 6 EVPS unsecured funded debt claims (consisting of EVPS third-out, fourth-out and unsecured note claims) votes to accept the plan, the reorganized Envision debtors would issue new three-year warrants convertible for up to 5% of new equity at a strike price “equal to the value at which holders of Allowed EVPS First-Out Term Loan Claims and Allowed EVPS Second-Out Term Loan Claims receive a full recovery on all Allowed EVPS First-Out Term Loan Claims and Allowed EVPS Second-Out Term Loan Claims.” The new warrant agreement would be included in the plan supplement.

The term sheet further provides that the reorganized Envision debtors “may” raise exit capital as of the plan effective date in the form of either new-money equity or debt rights offerings or a combination thereof. Any rights offering must be offered on a pro rata basis to the consenting Envision initial term loan lenders on the same terms.

In addition, initial term loan lenders that are consenting first-out or second-out lenders would each receive a pro rata share of a fee equal to 5% of new stock otherwise distributable to consenting first-out or second-out lenders; for example, there are two separate 5% fees contemplated under the term sheet, for consenting first-out and second-out lenders, respectively.

Classification and Treatment of Claims and Interests

The Envision/EVPS RSA term sheet includes the following proposed treatment of claims and interests:
       
RSA Milestones

The Envision RSA contemplates the following milestones:
 

• May 22 (five business days after petition date): Entry of both interim cash collateral orders;
• June 9 (25 days after petition date): Debtors will have retained an “operational consultant” to “analyze and facilitate the operational separation of the Reorganized AmSurg Debtors and the Reorganized EVPS Debtors on the Plan Effective Date”;
• June 19 (35 days after petition date): Entry of final cash collateral order and approval of the sale termination fee;
• July 19 (65 days after petition date): Entry of DS approval order;
• Sept. 12 (120 days after petition date): Entry of confirmation order; and
• Oct. 12 (150 days after petition date): Plan effective date to have occurred.

Other Provisions

The Envision plan term sheet contemplates broad releases in favor of the debtors, “consenting stakeholders,” loan agents and their related parties. The nondebtor releases would be subject to an opt-out mechanism.

The plan would include exculpation provisions in favor of the debtors, independent directors and any official committee of unsecured creditors and its members.

AmSurg Restructuring Support Agreement / Term Sheet

The AmSurg RSA and term sheet also refers to the sale of the remaining Envision AmSurg assets to the AmSurg debtors, with a “non-acquisition” toggle if a higher and better offer is secured by Envision. If the sale is consummated, the AmSurg debtors would undertake a $300 million equity rights offering available to second lien lenders. If the sale is terminated, then the rights offering would be reduced to $200 million. If the sale is terminated, then the $1.4 billion AmSurg intercompany claim against Envision would also be treated as a first lien claim against the Envision debtors.

The rights offering would be backstopped by unspecified second lien lenders who would receive a premium of $30 million payable in reorganized equity (or cash if the Envision sale is terminated). The backstop agreement would be filed in a plan supplement. The rights offering equity would be sold at a discount of 30% to plan value prior to accounting for the AmSurg assets to be purchased from Envision.

The existing AmSurg revolving facility would roll over into a new amended $300 million revolving facility, with revolving lenders receiving $100 million in cash on the effective date to reduce the amount drawn to $200 million. The new RCF would bear interest at S+3.75%, with a 1% SOFR floor, and would mature on July 20, 2026, the maturity date of the prepetition RCF.

First lien term loans would be refinanced using an exit facility of unspecified size and terms. Second lien term lenders would receive 100% of reorganized equity, subject to dilution by the rights offering, related premiums and a management incentive plan.

Envision and AmSurg would negotiate a new two-year transition services agreement to effect a complete split of the two businesses.

Classification and Treatment of Claims and Interests

The AmSurg RSA term sheet includes the following proposed treatment of claims and interests:
   
RSA Milestones

The AmSurg RSA contemplates the following milestones:
 

• May 22 (five business days after petition date): Entry of both interim cash collateral orders;
• May 30 (15 days after the petition date): Filing of motions seeking approval of the Envision AmSurg entities’ sale and related termination fee, the rights offering backstop agreement and related premium, and the exit first lien term facility commitment letter and related fees;
• June 9 (25 days after petition date): Filing of the AmSurg plan and disclosure statement; debtors will have retained an “operational consultant” to “analyze and facilitate the operational separation of the Reorganized AmSurg Debtors and the Reorganized EVPS Debtors on the Plan Effective Date”;
• June 19 (35 days after petition date): Entry of final cash collateral order, approval of the sale termination fee, approval of backstop agreement and approval of exit term loan facility commitment fees;
• July 19 (65 days after petition date): Entry of DS approval order;
• Sept. 12 (120 days after petition date): Entry of confirmation order; and
• Oct. 12 (150 days after petition date): Plan effective date to have occurred.

Cash Collateral Motion

The debtors seek entry of two separate orders, one for the Envision debtors and one for the AmSurg debtors, authorizing them to use cash collateral with the consent of the prepetition secured parties, which includes five separate secured lender groups. The debtors collectively hold approximately $655 million in cash as of the petition date, according to the motion, which they anticipate will be “more than sufficient” to fund the cases.

Envision

As part of the adequate protection package for the Envision, or EVPS, lenders, the proposed Envision interim cash collateral order contemplates converting outstanding letter of credit obligations under the Envision prepetition ABL facility into superpriority claims secured by new postpetition liens, or the EVPS L/C rollup.

The LC rollup would be final upon entry of the interim order, subject only to the rights of parties other than the debtors and EVPS secured parties to seek a determination that the LC rollup “resulted in the payment of an unsecured prepetition claim.” Upon entry of the interim order, all cash securing existing cash collateralized EVPS LCs would be released.

Outstanding obligations under the ABL facility as of the petition date include not less than $439.2 million of outstanding loans and $90.8 million in face amount of LCs, plus interest, fees and premiums. According to the debtors, the prepetition ABL lenders and LC issuers would not consent to the use of cash collateral or the renewal of the LCs without the rollup.

The debtors propose to secure the LC superpriority claims via first liens on EVPS unencumbered property, junior liens on encumbered term priority collateral (subject to the carve-out, the EVPS term loan adequate protection liens, the prepetition EVPS term loan liens and the prepetition intercompany loans) and priming liens on the ABL priority collateral.

As adequate protection for the ABL secured parties, the debtors propose to grant superpriority claims secured by (i) junior liens on EVPS term priority collateral (subject to the LC liens, the prepetition term loan liens, the term loan adequate protection liens, the prepetition ABL liens and permitted prior liens), (ii) priming liens on ABL priority collateral, subject only to the LC liens, the prepetition ABL liens and permitted prior liens and (iii) a first lien on EVPS debtor property not covered by (i) or (ii) that is “of the same nature, scope, and type as the ABL Priority Collateral,” a second lien on EVPS debtor property similar to EVPS term priority collateral and, subject to a final order, a second lien on avoidance action proceeds (subject to limitations).

Adequate protection for the EVPS term loan secured parties include superpriority claims secured by (i) junior liens on ABL priority collateral (subject to the LC liens, ABL prepetition and adequate protection liens, the prepetition term loan liens, prepetition intercompany loan liens and permitted prior liens), (ii) priming liens on EVPS term priority collateral, subject only to prepetition EVPS term loan liens and intercompany liens and permitted prior liens, and (iii) a first lien on property similar to the term priority collateral, a second lien on EVPS debtor property similar to ABL priority collateral and, subject to a final order, a first lien on avoidance action proceeds (subject to limitations).

The debtors propose to pay the fees and expenses of the ABL agent, the ad hoc first lien group and the EVPS term loan agent, undisclosed amounts due under a confidential “structuring fee letter” with the ABL agent and interest at the default rate.

The carve-out for professional fees under the Envision interim order is $7 million.

In addition, the debtors propose a waiver of the estates’ right to seek to surcharge its collateral pursuant to Bankruptcy Code section 506(c) and the “equities of the case” exception under section 552(b).

The proposed budget for the Envision debtors is HERE.

Like the Envision order, the lien challenge deadline is 75 days after entry of the interim order or, for a committee, 60 days after its appointment if appointed within 30 days of the petition date. The UCC lien investigation budget is $250,000.

AmSurg

As adequate protection for the AmSurg secured parties, the debtors propose to grant superpriority claims secured by:
 

• (i) junior replacement liens on all AmSurg debtor property junior to prior permitted liens - provided that (x) such liens of the AmSurg RCF secured parties and first lien agent would be pari passu as to each other and senior to the adequate protection liens of the second line secured parties and (y) the adequate protection liens of the AmSurg second lien term loan parties would be junior to adequate protection liens of the RCF and first lien term loan secured parties,
   
• (ii) priming liens in prepetition AmSurg collateral, subject only to permitted prior liens and, with respect to the adequate protection liens of the second lien parties, the prepetition and adequate protection liens of the RCF secured parties and the first lien term loan parties (with the same proviso that the RCF and first lien term loan adequate protection liens would be pari passu as to each other,
   
• (iii) first liens on any unencumbered property and, subject to a final order, avoidance proceeds - provided that (x) such liens would be pari passu as between the RCF facility agent and the first lien agent, (y) with respect to first lien term loan and RCF secured parties, subject to prepetition first-out first lien intercreditor agreement, and (z) with respect to AmSurg second lien parties, junior to the adequate protection liens of the RCF and first lien secured parties.

The AmSurg RCF and first lien term lenders would receive interest when due, including a prepayment premium as defined in the first lien term loan agreement, and professional fees and expenses, subject to their obligation to allocate their time between the two sets of debtors in accordance with the interim order.

In addition, the debtors propose a waiver of the estates’ right to seek to surcharge its collateral pursuant to Bankruptcy Code section 506(c) and the “equities of the case” exception under section 552(b).

The carve-out for professional fees under the AmSurg interim order is $3 million.

The proposed budget for the AmSurg debtors is HERE.

Like the Envision order, the lien challenge deadline is 75 days after entry of the interim order or, for a committee, 60 days after its appointment if appointed within 30 days of the petition date. The UCC lien investigation budget is $250,000.

ASC Stay Extension Motion

The debtors filed a motion to extend their automatic stay to nondebtor ambulatory surgery center, or ASC, entities, in which they “generally” hold a majority equity interest. The motion also seeks authority to honor postpetition obligations under existing ASC contracts as well as obligations to “professional corporations,” or PCs, with which the debtors contract to provide medical services to patients.

Arrangements with ASC entities and the PCs each generate a “substantial portion” of the debtors’ revenue, specifically $36.9 million in 2022 revenue from the ASC contracts and approximately $2.4 billion in 2022 from the PC contracts.

The motion says that the debtors operate and hold ownership in over 250 ASC entities, with approximately 4,400 physician partners and credentialed physicians at such entities. “The ASC Entities primarily consist of gastroenterology, ophthalmology, and multispecialty practices,” says the motion.

Provision of services to the ASC entities accounts for approximately 8.5% of the debtors’ business and “substantially all” of the AmSurg business, the motion says. The debtors believe they are owed approximately $4.9 million under the existing ASC contracts as of the petition date.

The debtors seek to extend their automatic stay to the ASC entities “on a limited basis, solely with respect to actions against the ASC Entities” by third-party vendors and lenders “that may be triggered as a result of the commencement of these chapter 11 cases.”

The ASC contracts the debtors seek to cover management and operational services. The operating agreements allow the debtors to lend working capital to the ASCs and provide loans or guarantees to third parties on the ASCs’ behalf, and also permit the ASCs to request additional capital contributions. There are no outstanding capital contribution requests as of the petition date, the debtors say.

The debtors also seek to honor additional postpetition responsibilities to the ASC entities that may be needed to “insulate the ASC Entities from disruption due to the chapter 11 cases,” thereby “safeguarding the Debtor’s important revenue stream and stabilizing the significant relationships between the Debtors and the ASC Entities.” Such responsibilities could include cash collateralizing equipment guarantees for ASC equipment lenders and guaranteeing payment to ASC vendors.

According to the motion, the debtors provide management and administrative services to approximately 1,400 PCs, which are owned exclusively by licensed physicians. The PC contractual obligations the debtors seek to honor relate to management services, insurance, employee matters, real property lease guarantees, indemnification and stock transfer agreements. The debtors believe that no prepetition amounts are due under the various PC contracts.

Cash Management Motion

The debtors’ cash management system is structured to serve both Envision/EVPS and AmSurg, and provides for shared-service payments between Envision and AmSurg under the shared services agreement. The debtors estimate that approximately $500 million in cash collections flow through the cash management system monthly.

Within the Envision segment, proceeds received from patients, payors, subsidies and other sources are deposited either in receipt accounts or collection concentration accounts maintained with nondebtor joint venture entities before flowing into a cash concentration account held at Wells Fargo or to one of two intermediary accounts held at Bank of America.

Cash collections within the AmSurg segment are split into two separate branches. One branch contains parent AmSurg Holdco LLC and its borrowing entity AmSurg LLC, which holds ownership interests in ambulatory surgery centers, and is also party to the shared-services agreement with Envision. The second branch is referred to as EVHC ASC and includes both debtor and nondebtor entities outside of AmSurg LLC that hold ownership interests in ASCs (for example, the AmSurg operations still owned by Envision after the recapitalization) and also facilitates cash management transactions for AmSurg LLC pursuant to the terms of the shared services agreement.

Nondebtor ASCs are owned in part by an AmSurg LLC or EVHC ASC entity and in part by the company’s physician partners. Within both AmSurg LLC and EVHC ASC, proceeds received from patients, payors and other sources are deposited in a series of collection accounts maintained by nondebtor ambulatory service centers. Cash moves through a series of debtor-controlled special-purpose bank accounts within each branch, and AmSurg LLC and EVHC ASC eventually receive proportionate shares of the cash generated at the ASC level, after expenses, in the form of monthly shareholder distributions.

Diagrams of the debtors’ cash management system were provided and include Physician Services, AmSurg and EVHC ASC.

Intercompany transactions include, among other things, transactions related to the collection of cash and payment of salaries, wages, benefits, contract labor, supplies, professional fees, purchased services, taxes, fees and insurance. At any given time, ordinary-course operations may result in intercompany balances owed by one debtor or nondebtor affiliate to another debtor or nondebtor affiliate. The debtors say they can ascertain, trace and account for all intercompany transactions through bank cash balance reports, which reflect actual cash movements, and will continue to track transactions on a postpetition basis.

Certain debtors have issued loans to nondebtor ASCs with a principal balance of approximately $53.5 million as of the petition date. In addition, certain debtors have extended funding in the form of capital contributions to certain joint ventures. In 2022, JV capital contributions totaled approximately $32.9 million.

Other Motions

The debtors also filed various standard first day motions, including the following:
 

• Motion for joint administration/ Order
  • The cases will be jointly administered under case No. 23-90342.
• Motion to establish trading procedures
  • Enterprise Parent Holdings Inc. seeks to establish trading procedures for its common stock to be able to object to and prevent transfers if necessary to preserve net operating losses. The debtors estimate they have approximately $833.2 million of NOL carryforwards.
• Motion to pay employee wages and benefits
  • The debtors seek authority to pay approximately $229 million in prepetition claims related to employee and physician compensation and benefits, as follows:
     

 

• Motion to reject unexpired office leases
• Motion to maintain insurance programs
• Motion to maintain refund programs
• Motion to pay critical vendors
  • The debtors seek authority to pay approximately $22.1 million in prepetition vendor claims, as follows:
     

 

• Motion to pay taxes and fees
  • The debtors seek authority to pay approximately $6.4 million in prepetition taxes and fees.
• Motion to provide utilities with adequate assurance
• Motion for extension of time to file schedules
• Motion for protocol to protect patient information
• Application to appoint Kroll as claims agent