As Orianna Health Systems LLC’s hard-fought chapter 11 case draws nearer to a close, interest in the case turned yesterday to fees for lawyers that have steered the bankruptcy through months of contentious litigation, WSJ Pro Bankruptcy reported. During a hearing at the U.S. Bankruptcy Court in Dallas, Orianna’s landlord and chief antagonist throughout much of its bankruptcy, Omega Healthcare Investors Inc., said attorneys for Orianna and the nursing-home operator’s unsecured creditors shouldn’t immediately be paid for work done earlier in the case. Orianna, once the operator of more than 40 nursing homes in seven states, filed for bankruptcy in March with a prearranged restructuring deal, which Omega voted to support. But a clash over how much of the plan’s expenses would be borne by Omega caused the deal to fall apart, and the two sides have since become adversaries. Omega, a publicly traded real-estate investment trust, now says that for months lawyers from DLA Piper pursued a debt-restructuring plan that wasn’t in line with the bankruptcy code. Court papers show DLA Piper is currently seeking approval and payment of about $2.2 million in fees. Working with DLA Piper, Orianna has since modified its restructuring plan and is pressing forward with it. Bankruptcy Judge Harlin DeWayne Hale ruled on Tuesday that the new version of the plan doesn’t significantly impact Omega, which limits its options for contesting it. A final hearing on the plan is set for Jan. 8. Read more.
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