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Appvion Creditors Seek Court OK to Sue Banks The committee representing Appvion Inc.’s unsecured creditors is asking a judge for approval to file a lawsuit against the specialty paper maker’s banks, saying the lenders either knew or should have known the company would miss financial projections when the business took on a chapter 11 loan, WSJ Pro Bankruptcy reported. On Monday, the unsecured creditors committee appointed in Appvion’s chapter 11 case submitted a proposed lawsuit in the U.S. Bankruptcy Court in Wilmington, Del. The lawsuit targets a group of senior lenders and investors that have higher priority for repayment in the bankruptcy. If a judge allows the lawsuit to proceed, the committee would be permitted to step into Appvion’s shoes and challenge liens and try to claw back payments that have been made during the bankruptcy to lenders’ advisers. The committee’s allegations concern bankruptcy financing Appvion lined up when it filed for chapter 11 in October. That financing, led by senior lenders, provided Appvion with $85 million in new cash and included about $240 million in existing debt that was “rolled-up,” giving that debt top priority for repayment in the chapter 11.

A handful of Illinois-based nursing homes sued the state’s Department of Healthcare and Family Services on Friday, saying low Medicaid rates are jeopardizing their ability to provide adequate quality of care, Reuters reported. In a lawsuit filed in the U.S. District Court for the Northern District of Illinois, five groups that jointly operate more than 100 skilled nursing facilities across the state said Illinois’ reimbursement rates and methodologies violated certain requirements under the Medicaid Act. An impasse between Illinois’ Republican governor and Democrats who control the legislature left the state without a complete budget for an unprecedented two fiscal years. Lawmakers enacted a fiscal 2018 budget in July, but the state still has a $9.1 billion backlog of unpaid bills to vendors and service providers. CC Care, a Chicago-based skilled nursing home operator, filed for chapter 11 bankruptcy in October, saying in court papers that slow, erratic and low Medicaid payments were having a “disastrous effect” on all nursing homes in the state.