CHS FL, LLC and its affiliated YesCare correctional-healthcare debtors are roughly two months into a contested Chapter 11 in the Middle District of Florida, operating on stipulated cash-collateral authority rather than new-money DIP financing while creditor friction over discovery, administrative expenses, and stay relief intensifies.
The debtors—providers of medical and mental-health services to approximately 20,000 inmates across nine states—filed on May 8, 2026, after a $307 million Michigan jury verdict in the Jackson civil-rights and malpractice litigation triggered government-contract terminations and non-renewals that collapsed liquidity. Voluntary PetitionDkt. 1 The First Day Declaration traces the crisis to that verdict and the resulting revenue loss, against a capital structure carrying approximately $21 million of secured obligations to M2 LoanCo, LLC (an affiliate) under a Third Amended and Restated Credit Agreement and up to $400 million of largely contingent unsecured trade and tort exposure. First Day DeclarationDkt. 25 With no DIP financing secured, the debtors have relied on consensual use of M2's cash collateral under successive stipulated orders granting replacement liens and a section 507(b) superpriority claim, with spending tied to a budget most recently amended on July 2. Amended Cash Collateral BudgetDkt. 325
The case is now moving into a higher-conflict phase driven by the Official Committee of Unsecured Creditors and critical vendors. The Committee filed an emergency contempt motion against affiliate CHS Employee Group LLC and principal Isaac Lefkowitz for non-compliance with the Court's June 24 discovery order, seeking escalating daily fines, personal liability for Lefkowitz, and a procedural bar tied to an August 26 challenge deadline for investigating affiliate claims. The accompanying certificate of necessity presses for a hearing on or before July 8 to protect that deadline. IT provider ConsulTech Inc. d/b/a A.M. Rose moved on an emergency basis to compel payment of roughly $1.18 million in postpetition infrastructure and interim-CIO services, or in the alternative for stay relief to terminate performance, asserting the debtors have sufficient liquidity to pay. Tort claimants continue pressing outside the estate: Christian Rodriquez seeks stay relief to liquidate personal-injury claims in the Eastern District of Pennsylvania against the debtors' insurance policies.
The plan and disclosure-statement deadline is September 8, 2026, with the next omnibus hearing set for July 29, 2026.
