CHS FL, LLC and its affiliated correctional-healthcare debtors are roughly six weeks into their Chapter 11 cases in the Middle District of Florida, operating under interim cash-collateral authority while contested financing and discovery disputes converge on a July 1, 2026 evidentiary hearing.
The filing was precipitated by a severe liquidity shock. On April 2, 2026, a Michigan jury returned a $307 million civil-rights and medical-malpractice verdict against certain debtors, triggering contract terminations and non-renewals by governmental correctional clients and leaving the debtors unable to meet payroll and pharmaceutical-supply obligations. The debtors — YesCare-affiliated entities delivering daily care to roughly 20,000 inmates across 19 facilities in nine states — sought Chapter 11 relief on May 8, 2026 Voluntary PetitionDkt. 1. Their capital structure centers on approximately $21 million of secured obligations to affiliate M2 LoanCo, LLC under a Third Amended and Restated Credit Agreement, behind which sit substantial unsecured trade and litigation claims estimated as high as $400 million First Day DeclarationDkt. 25.
Unable to secure new-money DIP financing, the debtors have run the estate on consensual use of M2's cash collateral through June 30, 2026, subject to budget limits, replacement liens, and a § 507(b) superpriority claim — a posture the Tehum GUC Trustee and Jackson tort claimants have contested as overbroad and predicated on disputed, insider-tainted liens. The Official Committee of Unsecured Creditors, appointed May 28, 2026 and now adding Proskauer Rose LLP as restructuring counsel effective May 31, 2026, has pushed aggressively into the financing and wage disputes; its emergency motion to compel discovery from non-debtor affiliate CHS Employee Group LLC was denied on procedural (service) grounds on June 18, 2026 . The same day, the debtors moved to reject 17 client contracts effective as of their respective transition dates, formalizing the operational wind-down already underway across county and state correctional authorities .
The case now pivots on the June 30–July 1, 2026 hearing cluster: interim cash-collateral authority expires June 30, with a July 1 evidentiary hearing scheduled on the cash-collateral and wages motions, against a plan and disclosure statement deadline of September 8, 2026.
