CHS Care NY: YesCare Files Chapter 11 After $307M Jackson Verdict

CHS Care NY, LLC filed chapter 11 on May 13, 2026 in the U.S. Bankruptcy Court for the Middle District of Florida (Fort Myers Division), case number 2:26-bk-01145-FMR. The petition arrived as a follow-on filing in an expanding YesCare-family group whose lead case is CHS FL, LLC (Case No. 2:26-bk-01087-FMR), filed five days earlier on May 8. The Second Motion for Joint Administration pulled CHS Care NY into the lead case on May 15, 2026, consolidating the New York affiliate into a case the parent and its sister CHS entities had already opened to address the fallout of a $307 million Michigan jury verdict and the resulting loss of roughly 80% of the group's prior $350M+ correctional-healthcare revenue base.

The case posture is unresolved. The Debtors have not committed to a sale, plan, or recapitalization path; no DIP financing has been entered; and a Tehum-trust emergency motion to transfer the cases to the Southern District of Texas was continued from the May 11 first-day hearing to June 3, 2026. CHS Care NY's own docket carries no individual entries as of mid-May 2026; the operative record sits in the lead case.

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CHS FL, LLC

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Debtor(s)	CHS Care NY, LLC (7 jointly administered YesCare-family entities)
Court	U.S. Bankruptcy Court, Middle District of Florida (Fort Myers Division)
Case Number	2:26-bk-01145-FMR
Lead Case	2:26-bk-01087-FMR (CHS FL, LLC)
Petition Date	May 13, 2026
Judge	Hon. Luis E. Rivera II
Claims Agent	Omni Agent Solutions, Inc.
341 Meeting	June 29, 2026
Funded Secured Debt	~$21.0 million (M2 LoanCo, LLC — insider)
Estimated Unsecured / Litigation Exposure	up to ~$400 million
DIP Facility	None entered; Debtors exploring options

Joint Administration and the YesCare Affiliated Debtor Group

CHS Care NY, LLC is one of seven affiliated debtors now consolidated under the CHS FL lead case. The lead petitions — CHS FL, LLC, CHS AL, LLC, CHS TX, Inc., and YesCare Corp. — were filed May 8, 2026 in M.D. Fla. A second wave on May 13, 2026 added Corizon Health of New Mexico, LLC (Case No. 2:26-bk-01144-FMR), CHS Care NY, LLC (2:26-bk-01145-FMR), and CHS Care TX, LLC (2:26-bk-01146-FMR). The May 15 Second Motion for Joint Administration sought to fold the three later-filed Debtors — CHS Care NY among them — into the consolidated case management apparatus already approved on an interim basis for the May 8 group.

Group-level scope reported in the Goldwasser First Day Declaration: more than 1,500 employees (approximately 742 full-time and 809 part-time), roughly 19 facilities across nine states (9 in Florida, 2 in Kentucky, and 1 each in New Mexico, Texas, Michigan, New Jersey, New York, and Virginia), and historic revenue exceeding $350 million annually. The workforce is not employed by the Debtors directly: every employee is supplied by non-debtor affiliate CHS Employee Group, LLC, and the Emergency Wages Motion routes through that affiliate to address pre-petition payroll arrears.

YesCare Corp. is the 100% owner of all Debtors. CHS Care NY is the New York-affiliate vehicle within that operating footprint, with correctional healthcare operations in Orange County reported as of January 2025; its individual schedules are not yet on the record and are due June 22, 2026 under the extension granted at the May 11 first-day hearing.

Jackson Verdict and the 80% Revenue Collapse

The proximate filing trigger is a $307 million Michigan jury verdict returned April 2, 2026 — referred to in the filings as the "Jackson Verdict." The First Day Declaration attributes the contract losses to the verdict's signaling effect on customers. Goldwasser states that following the verdict the Debtors lost approximately 80% of their previously $350M+ annual revenue base, as correctional-healthcare customers either terminated their contracts or declined to renew on expiration.

Louisville Metro Corrections announced its intent to terminate its multimillion-dollar YesCare contract on the same day as the lead-case petition. The jail subsequently selected Comprehensive Correctional Care as its replacement provider.

The Lexington-Fayette Urban County Government selected a new healthcare provider for the Fayette County Detention Center within a week of the joint-administration motion.

Alabama prison healthcare staff reported going unpaid following the filing, and post-petition reporting from Louisville documented service-quality complaints that preceded the contract termination. The First Day Declaration also reports more than 100 litigation matters pending against the Debtors as of the petition date, separately from the Jackson Verdict itself.

Corizon Divisional Merger and the Tehum Settlement Default

In 2022, predecessor entity Corizon Health, Inc. executed a Texas divisional merger — widely described as a "Texas Two-Step" — that split the legacy business into two halves: a "GoodCo" branch that became YesCare Corp. and its CHS-branded operating subsidiaries (including CHS Care NY) and a "TortCo" branch that became Tehum Care Services, Inc. Productive contracts and favored liabilities migrated to GoodCo; tort exposure and vendor claims remained with Tehum. Tehum filed its own chapter 11 in the Southern District of Texas (case 23-90086) before Judge Christopher M. Lopez, and the Tehum Plan was confirmed on March 3, 2025.

The maneuver was contested almost continuously. Senators Elizabeth Warren, Dick Durbin, and Bernie Sanders characterized it as an "abusive" bankruptcy tactic in a 2023 oversight letter, and the U.S. Department of Justice moved to dismiss the Tehum case outright on bad-faith grounds. Judge Lopez rejected an earlier $54 million proposed settlement in May 2024 before the Tehum estate ultimately confirmed a $75 million plan funded by YesCare and its sponsors on March 3, 2025.

Under the confirmed Tehum Plan, the so-called Settlement Parties — YesCare, CHS TX, Inc., and Perigrove 1018, LLC — committed to pay an aggregate $50 million to the Tehum PI/Wrongful Death Trust and GUC Trust: $2 million on the Effective Date and the remaining $48 million over 30 months at 6% interest. The settlement payments are the trigger condition for the channeling injunction that protected the Settlement Parties from the underlying tort and restructuring causes of action. A payment default terminates the injunction and revives the trusts' claims.

The Settlement Parties missed the $2 million up-front payment, causing the injunction to lapse. The Tehum trusts then sued YesCare and CHS TX on April 27, 2026 alleging breach of the Tehum Plan settlement obligations and improper post-merger restructuring transactions, five days before the Michigan verdict. The May 8 filing followed roughly two weeks later. Coverage has characterized the case as a repeat bankruptcy tied to the Corizon estate the 2022 divisional merger had separated from the GoodCo branch.

Capital Structure and the M2 LoanCo Insider Debt

The First Day Declaration reports approximately $21.0 million in funded secured debt, with the sole lender identified as M2 LoanCo, LLC — an affiliate of the Debtors and an insider lender. Estimated unsecured claims, by contrast, run up to approximately $400 million, comprising trade debt and litigation exposure that includes the Jackson Verdict and the 100-plus pending matters. YesCare Corp. holds 100% of the equity of every Debtor, including CHS Care NY.

No DIP financing facility has been filed or entered. Bloomberg Law reported on the eve of the petition that the Debtors were searching for a payroll loan in a "cataclysmic" freefall but ultimately filed without one. Instead, the Debtors filed a May 19, 2026 Cash Collateral Motion seeking consensual use of M2 LoanCo's collateral under a Third Amended and Restated Credit Agreement, with $16,204,259 outstanding as of the petition date. The proposed order has a June 30, 2026 outside termination date, a 30-day challenge period, and a three-business-day Remedies Notice Period; there is no roll-up and no new-money component.

Pre-petition wage arrears totaled approximately $9.7 million across the leased workforce. The Emergency Wages Motion identifies roughly 15 employees owed amounts above the section 507(a)(4)/(a)(5) priority cap of $17,150 — approximately $78,000 in aggregate — which the Debtors propose to pay in full. Because the workforce is leased from non-debtor CHS Employee Group, LLC rather than employed by the Debtors directly, the wages motion runs through that affiliate.

At the May 11 first-day hearing, the court continued the Debtors' emergency wage motion to June 3, 2026, with the explicit caveat that if a DIP motion is filed sooner, parties may request to be heard earlier. The continuance left immediate post-petition wage authority unresolved at the time of the New York-affiliate joinder, and contemporaneous reporting from Alabama indicates that some operational employees were already going unpaid.

Tehum Trusts' Emergency Motion to Transfer Venue

On May 10, 2026, Matthew J. Dundon — in his dual capacity as GUC Trustee of the Tehum GUC Trust and Wind-Down Officer for Tehum Care Services, Inc. — filed an Emergency Motion to Transfer Venue. The motion seeks to move every CHS-family chapter 11 — including CHS Care NY — to the U.S. Bankruptcy Court for the Southern District of Texas, the court that confirmed the Tehum Plan and retains exclusive jurisdiction over Plan-related disputes.

The motion advances three principal arguments. First, it alleges improper venue, characterizing the Debtors as shell entities with no employees, assets, or operations in the Middle District of Florida and identifying Brentwood, Tennessee as the actual principal place of business. Second, it argues the interest of justice favors the Texas court, which has presided over the related Tehum matters for more than three years. Third, it characterizes the Florida filing as bad-faith forum shopping intended to evade jurisdiction in the pending Texas adversary proceeding.

The motion also catalogs a fraud narrative against former Corizon principal Isaac Lefkowitz and Perigrove 1018, LLC. The fairness opinion supporting the 2022 divisional merger relied on a representation that the Corizon "Signature Accounts" held approximately $22.3 million in cash. The motion alleges that the actual balance on February 28, 2022 was $12,583.00, and that on or about April 28, 2022 Lefkowitz delivered a forged bank statement showing the $22.3 million balance, which the CFO then incorporated into the Management Representation Letter supporting the merger.

The motion further alleges that YesCare operates as a "mere continuation" of Corizon — same Brentwood principal place of business, same management, same bank accounts, same contract structures, with Perigrove 1018 remaining the beneficial owner and Lefkowitz continuing operational control. Among the dollar exposures cataloged: more than $100 million in hospital and vendor receivables and more than $35 million in non-contingent liabilities owed to the Movants.

At the May 11 hearing the court continued the transfer motion to June 3, 2026 at 2:30 p.m., with responses due May 29, 2026. Per the hearing record, the Wind-Down Officer must inform chambers by June 1 whether to proceed on the scheduled date or seek additional reply time. The Tehum trusts have separately retained counsel admitted pro hac vice (Nicholas R. Zluticky and Zachary Hemenway), and Michael Zimmerman, as Trustee, has appeared through D. Cameron Moxley and Eric R. Goodman of Brown Rudnick LLP, with Marc Weintraub of Bradley Arant as local Florida counsel.

Brevard County Stay Relief and Major Customer Contract Losses

The first major customer to seek formal relief in the chapter 11 was the Brevard County Sheriff's Office. On May 19, 2026 the Sheriff's Office filed an emergency stay relief motion seeking to terminate its February 1, 2020 Health Services Agreement with debtor CHS TX, Inc. d/b/a YesCare and to compel turnover of patient records, equipment, and data covering the Brevard County Jail Complex. The motion requests termination nunc pro tunc to May 8, 2026 and alleges that YesCare stopped providing staffing at the jail on or about May 14, 2026.

The Brevard contract carries annual base compensation of $10,107,936 paid in monthly installments of $842,328. The Sheriff's Office alleges $341,477 in unpaid outside medical claims as of March 31, 2026 and an additional $147,569 in pharmacy services owed to subcontractor Clinical Solutions Pharmacy, with defaults persisting more than thirty days and triggering Article VIII Section 8.2(c) termination rights. A separate motion to compel rejection of an executory provider agreement was filed the same day by Brevard County provider Pamela Elchert.

The Brevard motion follows months of public attrition at YesCare's largest contracts. Alabama's Department of Corrections cancelled a roughly $1 billion correctional-healthcare contract in late April 2026 — the single largest known contract loss tied to the verdict's signaling effect. Louisville Metro Corrections moved to end a three-year, $47 million contract awarded in April 2024 on the day of the lead-case petition.

Claims Administration and the 100-Day Patient Bar Date

The case has two structural features driven by the underlying patient population: HIPAA-conformant filing procedures and an extended general bar date. The court has entered an interim order on HIPAA and Confidential Patient Health Information procedures permitting redacted patient matrices and schedules under seal, accommodating the Debtors' obligations under federal health-information privacy law as applied to inmate populations.

The Expedited Bar Date Motion seeks a general claims bar date 100 days after the Service Date — substantially longer than the 60-day default — on the explicit ground that many current and former patients are incarcerated and difficult to reach with notice. The motion also proposes a governmental bar date of November 4, 2026, the first business day at least 180 days after the May 8 lead-case petition.

Omni Agent Solutions, Inc. has been retained as claims and noticing agent on an interim basis effective as of the petition date. Consolidated case management features — a single consolidated creditor matrix with PII suppression and a consolidated case management summary — were granted on an interim basis and continued to June 3, 2026.

Debtors' counsel of record for CHS Care NY and the broader group are Michael R. Dal Lago and Christian G. Haman of Dal Lago Law, with Jeremy R. Johnson and Trinitee G. Green admitted pro hac vice as co-counsel. David Goldwasser of FIA Capital Partners, LLC serves as Chief Restructuring Officer and signed the First Day Declaration. No fee applications have been filed or approved.

Key Timeline

Date	Event
2022	Corizon "Texas Two-Step" divisional merger; YesCare/CHS (GoodCo) and Tehum Care Services (TortCo) entities formed
Feb. 13, 2023	Tehum Care Services chapter 11 filed in S.D. Tex. (case 23-90086 before Judge Christopher M. Lopez)
Jul. 18, 2024	$75 million Tehum settlement reached
Mar. 3, 2025	Tehum Plan confirmed in S.D. Tex.
Apr. 2, 2026	Jackson Verdict — $307 million Michigan jury verdict against the Debtors
Apr. 22, 2026	Alabama Department of Corrections cancels ~$1 billion YesCare contract
Apr. 27, 2026	Tehum trusts sue Debtors over settlement default and improper restructuring
May 6, 2026	David Goldwasser appointed CRO (FIA Capital Partners, LLC)
May 8, 2026	Lead petitions filed by CHS FL, CHS AL, CHS TX, and YesCare Corp. in M.D. Fla.
May 10, 2026	First Day Declaration and Tehum Emergency Motion to Transfer Venue filed
May 11, 2026	First-day hearing; six first-day matters continued to June 3, 2026
May 13, 2026	CHS Care NY, CHS Care TX, and Corizon Health of New Mexico file chapter 11
May 15, 2026	Second Motion for Joint Administration adds CHS Care NY to lead case
May 18, 2026	Interim orders entered on case management summary, creditor matrix, OMNI retention, HIPAA, and schedules extension
May 19, 2026	Cash Collateral Motion filed; Brevard County Sheriff's Office stay relief motion filed
May 29, 2026	Deadline for responses to Emergency Motion to Transfer Venue
Jun. 3, 2026	Continued hearing on first-day matters and venue motion
Jun. 22, 2026	Schedules due
Jun. 29, 2026	Section 341 meeting of creditors
Jun. 30, 2026	Cash collateral termination / outside date
Nov. 4, 2026	Proposed governmental bar date

Frequently Asked Questions

What is CHS Care NY, LLC's relationship to YesCare and Corizon Health?

CHS Care NY is one of seven affiliated debtors in the YesCare-family chapter 11 group. YesCare Corp. owns 100% of the equity of every Debtor in the group. YesCare is the successor-by-divisional-merger to Corizon Health, Inc.; the 2022 Texas divisional merger split Corizon into the YesCare/CHS "GoodCo" branch and the Tehum Care Services "TortCo" branch.

Why was the case filed in the Middle District of Florida?

The Debtors filed in M.D. Fla. (Fort Myers Division), but the Tehum liquidating trusts have moved to transfer the cases to the Southern District of Texas. The Tehum motion characterizes the Florida filing as forum shopping and identifies Brentwood, Tennessee as the actual principal place of business. The transfer motion is set for hearing on June 3, 2026.

What is the Jackson Verdict?

A Michigan jury returned a $307 million verdict against the Debtors on April 2, 2026 in a medical malpractice / neglect matter. The First Day Declaration identifies the verdict as the principal trigger for the chapter 11, attributing roughly 80% of the group's revenue collapse to subsequent contract terminations and non-renewals.

Who is the claims agent for CHS Care NY?

Omni Agent Solutions, Inc. serves as the claims and noticing agent. The firm maintains the official claims register and distributes case notifications to creditors and parties in interest.

When is the claims bar date?

The Debtors have proposed a general bar date 100 days after the Service Date — longer than the 60-day default — to accommodate notice to current and former incarcerated patients. The proposed governmental bar date is November 4, 2026.

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