Res 1993-185 - Laserfiche WebLink

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l'IfF . Effective June 1, 1993, Debtor changed insurance coverage. Debtor's new coverage has a $200 deductible and has a limit of $10 million per occurrence wi th no annual aggregate. The insurance covers only claims made during the covered period. b. Avoidance Actions: The Debtor does, not intend to bring any additional avoidance actions under 11 U.S.C. §§ 544-548, ex~ept those already on file. Since the Debtor had few payables over thirty {3D} days on the Petition Date and because the Plan Proponents believe the Debtor is able to pay all Allowed Claims in full as proposed in the Plan from its operating revenues, Debtor has little reason to pursue avoidance actions. c. Tax Litigation: In July, 19.89, HII received an IRS Examination Report for fiscal years 1984 and 1985 proposing additional tax liabilities of approximately $8 million. HII files tax returns on a consolidated basis with its subsidiaries, including Debtor. HI I favorably resolved all issues except for issues relating to HII's use of the cash method of accounting, and lowered the proposed assessment to approximately $4 million. In August, 1991, HI! filed a petition in the United States Tax Court contesting the $4 million assessment. ;; ,In July 1991, an IRS examination report was issued for fiscal years 1986 through 1988, in which additional tax liabilities of approximately $14 million are proposed, the primary issue again relating to HII's use of the cash method of accounting. HII intends to exercise its appeal rights - by filing a protest in the IRS Appeals Division. Pursuant to the Plan, the Allowed Amount of the IRS Priority Tax Claim wi 11 be set at $5,000,000. To the extent the Allowed Amount of the IRS Priority Tax Claim is paid pursuant to the Plan, the IRS Priority Tax Claim against the Debtors and all Affiliates shall be fully satisfied. . d. Objection to Healthvest's Claim and Related Adversary Proceedinq On July 20, 1992, Healthcare and its Affiliates, including Debtor, filed their. Objection to Claim and Complaint to Subordinate Claim, Recover Preferences and Fraudulent Conveyance and for Declaratory Judgment against HealthVest {the "HealthVest Adversary Proceeding"}. In the Complaint, HII and its Affiliates asserted that various leases between HealthVest and certain of the Affiliates should be recharacterized as mortgages and then be subordinated to the level of "Equity." Furthermore, HI! and its Affiliates sought to equi tably subordinate Heal thcare 's claims, against HII and the Affiliates for alleged inequitable conduct. The Complaint also alleged various fraudulent conveyance and preference actions against HealthVest. As indicated above, this adversary was consolidated wi th Heal thcare 's early action claiming that the Collateral Proceeds Account was recoverable as a preference or fraudulent transfer. On September 15, 1992, Healthcare ("HII") and the Affiliates {collectively, referred to herein as the "Debtors"} filed their First Amended Objection to Claim and Complaint to Subordinate Claim, Recover Preferences and Fraudulent Conveyances, and for Declaratory Judgment {the "First Amended - 31 - a-201SS