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Home New Cases Cone Health Moves to Dismiss Trustee’s Allegations of Preferential and Fraudulent Transfers

Cone Health Moves to Dismiss Trustee’s Allegations of Preferential and Fraudulent Transfers

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May 26, 2022, Bankruptcy Court for the Middle District of North Carolina – The Moses H. Cone Memorial Hospital Operating Corporation (“Cone Health”), Moses Cone Physician Services, Inc. (“MCPS”), et al. (“Defendants”) move the North Carolina Bankruptcy Court to dismiss the complaint made against them by Louis E. Robichaux, IV, as Liquidation Trustee (“Trustee”) of Randolph Health Liquidation Trust. 

The Defendants argue that the allegations in the Complaint are “insufficiently” pleaded to establish a plausible basis for nearly all the relief requested by the Trustee. 

The Trustee in his complaint had claimed that Randolph Hospital, Inc. (“Debtor”) entered into a Management Services Agreement (“MSA”) with Cone Health wherein Cone Health agreed to manage Randolph Hospital, provide executives and other necessary managerial sources to Randolph Hospital.

The complaint highlighted that Cone Health often chose to act in furtherance of roles that benefitted Cone Health rather than fulfilling its obligations and responsibilities as Randolph Hospital’s manager. Randolph allegedly made numerous substantial payments to Cone Health and MCPS on account of its debt to them under MSA and other obligations. The Trustee sought to avoid and recover all the preferential and fraudulent transfers and insider payments made by the Debtor to the Defendants. 

The Defendants are being represented by Waldrep Wall Babcock & Bailey PLLC in this adversary proceeding.  

Louis E. Robichaux, IV, as Liquidation Trustee of Randolph Health Liquidation Trust v. The Moses H. Cone Memorial Hospital Operating Corporation, et al. ( In re Randolph Hospital, Inc.), AP No. 22-02002, US Bankruptcy Court Middle District of North Carolina. 

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