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When US prison healthcare companies went bust, victims’ families kept fighting When US prison healthcare companies went bust, victims’ families kept fighting
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The Guardian examined several cases that played out in bankruptcy court, where a series of unlikely events led to an unusual victoryThe Guardian examined several cases that played out in bankruptcy court, where a series of unlikely events led to an unusual victory
When Jennifer Casey Norred attempted suicide at Leon county jail in Tallahassee, Florida, medical staff didn’t take her to the emergency room or provide mental health support. Instead, they strapped her to a chair for 24 hours, according to jail records. The jail’s own policy requires that restraint chairs only be used as a last resort, and not for more than two hours.When Jennifer Casey Norred attempted suicide at Leon county jail in Tallahassee, Florida, medical staff didn’t take her to the emergency room or provide mental health support. Instead, they strapped her to a chair for 24 hours, according to jail records. The jail’s own policy requires that restraint chairs only be used as a last resort, and not for more than two hours.
It was the kind of policy violation that has become more common nationwide since two private-equity backed prison health companies, Corizon and Wellpath, have come to dominate the industry, experts say. It was the kind of policy violation that has become more common nationwide since two private equity-backed prison health companies, Corizon and Wellpath, have come to dominate the industry, experts say.
Within three days, Norred – who went by Casey to her friends and family – would attempt suicide again, and succeed.Within three days, Norred – who went by Casey to her friends and family – would attempt suicide again, and succeed.
An investigation by the Guardian published on Monday revealed how Wellpath and Corizon (now renamed YesCare) have remained leaders in the business of providing healthcare to incarcerated people even though multiple government bodies, including the Department of Justice, have documented cases where these companies’ failure to provide adequate care violated prisoners’ constitutional rights and in some cases was even linked to preventable deaths.An investigation by the Guardian published on Monday revealed how Wellpath and Corizon (now renamed YesCare) have remained leaders in the business of providing healthcare to incarcerated people even though multiple government bodies, including the Department of Justice, have documented cases where these companies’ failure to provide adequate care violated prisoners’ constitutional rights and in some cases was even linked to preventable deaths.
A wrongful death complaint filed on Norred’s behalf alleged that to save money Corizon refused to provide “actual mental health treatment and therapy”.A wrongful death complaint filed on Norred’s behalf alleged that to save money Corizon refused to provide “actual mental health treatment and therapy”.
Corizon denied these allegations in a legal filing.Corizon denied these allegations in a legal filing.
But laws that restrict prisoners’ ability to sue and that protect the private equity firms who own the healthcare companies facing lawsuits make it difficult to seek justice. And when the healthcare companies file for bankruptcy, the situation gets even more complicated.But laws that restrict prisoners’ ability to sue and that protect the private equity firms who own the healthcare companies facing lawsuits make it difficult to seek justice. And when the healthcare companies file for bankruptcy, the situation gets even more complicated.
“Healthcare in correctional facilities is often a black box,” said Dan Mistak, acting president of Community Oriented Correctional Health Services, a non-profit that aims to improve healthcare quality for incarcerated people. “With almost no transparency, and the ability to dodge accountability through bankruptcy and corporate restructuring, these companies can deliver substandard or even deadly care and still turn a profit,” Mistak explained.“Healthcare in correctional facilities is often a black box,” said Dan Mistak, acting president of Community Oriented Correctional Health Services, a non-profit that aims to improve healthcare quality for incarcerated people. “With almost no transparency, and the ability to dodge accountability through bankruptcy and corporate restructuring, these companies can deliver substandard or even deadly care and still turn a profit,” Mistak explained.
Neither Wellpath nor Corizon (YesCare) responded to requests for comment.Neither Wellpath nor Corizon (YesCare) responded to requests for comment.
The Guardian has examined how several cases like Norred’s have played out in the bankruptcy court, rather than the traditional civil justice system. When a company files for bankruptcy, all legal claims against it are automatically paused, adding an extra layer of difficulty for plaintiffs.The Guardian has examined how several cases like Norred’s have played out in the bankruptcy court, rather than the traditional civil justice system. When a company files for bankruptcy, all legal claims against it are automatically paused, adding an extra layer of difficulty for plaintiffs.
Wellpath and Corizon both filed for bankruptcy in part because of mounting lawsuits alleging negligent care. One of these was a wrongful death claim filed by Beth Frederick, Norred’s mother, in 2019. The bankruptcy courts ultimately became the unlikely venue that allowed victims to have their voices amplified – and possibly change the way these companies will operate in the future.Wellpath and Corizon both filed for bankruptcy in part because of mounting lawsuits alleging negligent care. One of these was a wrongful death claim filed by Beth Frederick, Norred’s mother, in 2019. The bankruptcy courts ultimately became the unlikely venue that allowed victims to have their voices amplified – and possibly change the way these companies will operate in the future.
On 24 July 2017, three days after Norred’s first suicide attempt, plain clothes officers appeared at her parents’ door and informed her mother that Norred had been found dead in her cell. It would be months before she learned the full, gruesome circumstances that led to their daughter’s death. Corizon was contracted to provide medical care at Leon county jail, and Corizon staff’s jail logs show that while Norred was strapped down, she was “crying head hanging down” in multiple entries; then “screaming and yelling blowing off some steam”; then “quiet now probably tired from all that screaming”. For part of that time, she was sitting in her own urine. On 24 July 2017, three days after Norred’s first suicide attempt, plainclothes officers appeared at her parents’ door and informed her mother that Norred had been found dead in her cell. It would be months before she learned the full, gruesome circumstances that led to their daughter’s death. Corizon was contracted to provide medical care at Leon county jail, and Corizon staff’s jail logs show that while Norred was strapped down, she was “crying head hanging down” in multiple entries; then “screaming and yelling blowing off some steam”; then “quiet now probably tired from all that screaming”. For part of that time, she was sitting in her own urine.
“It was the exact wrong response. Let’s punish you,” Norred’s mother said.“It was the exact wrong response. Let’s punish you,” Norred’s mother said.
In 2023, Scott Allen filed a lawsuit similar to Frederick’s. Allen’s son, Brady, 41, had died within a day of being arrested in Kennesaw, Georgia, on suspicion he had trespassed and gone swimming in a stranger’s outdoor pool. Brady was placed in a jail where Wellpath, another company backed by private equity, had been contracted to provide medical services. Brady suffered from depression and had recently survived a drug overdose. According to Cobb county sheriff’s office policy, given his mental state, he should have received a full medical evaluation upon entering the jail. Instead the Wellpath staff put Brady in an isolation cell. According to video footage and his father’s legal complaint against Wellpath, Brady spent the night pulling out most of his hair and pushing an emergency button over 100 times. Nobody came to Brady’s cell until he tried to pull the fire alarm from the wall the next morning. Eventually a sergeant approached the cell door and told him to turn around and put his hands against the wall.In 2023, Scott Allen filed a lawsuit similar to Frederick’s. Allen’s son, Brady, 41, had died within a day of being arrested in Kennesaw, Georgia, on suspicion he had trespassed and gone swimming in a stranger’s outdoor pool. Brady was placed in a jail where Wellpath, another company backed by private equity, had been contracted to provide medical services. Brady suffered from depression and had recently survived a drug overdose. According to Cobb county sheriff’s office policy, given his mental state, he should have received a full medical evaluation upon entering the jail. Instead the Wellpath staff put Brady in an isolation cell. According to video footage and his father’s legal complaint against Wellpath, Brady spent the night pulling out most of his hair and pushing an emergency button over 100 times. Nobody came to Brady’s cell until he tried to pull the fire alarm from the wall the next morning. Eventually a sergeant approached the cell door and told him to turn around and put his hands against the wall.
As Brady tried to push past the sergeant and escape his cell, the sergeant and three deputies attacked him with pepper ball guns, tasers and blows as Brady continued to resist, according to the internal investigation. Finally the sergeant “felt inmate Brady Allen suddenly relax”. He had died. As Brady tried to push past the sergeant and escape his cell, the sergeant and three deputies attacked him with pepper ball guns, Tasers and blows as Brady continued to resist, according to the internal investigation. Finally the sergeant “felt inmate Brady Allen suddenly relax”. He had died.
Wellpath did not respond to a request for comment.Wellpath did not respond to a request for comment.
Both wrongful death cases seemed doomed when the companies involved – Corizon and Wellpath – each filed for bankruptcy.Both wrongful death cases seemed doomed when the companies involved – Corizon and Wellpath – each filed for bankruptcy.
Frederick’s lawsuit on behalf of her daughter Casey Norred was dragging on, as the defendants requested multiple extensions and sought to dismiss the case. In February 2023, as Corizon faced mounting lawsuits, as well as Covid related financial distress, the company attempted a bankruptcy maneuver known as the “Texas two-step” and split into two new companies, YesCare and Tehum. Corizon’s private equity owners moved all the company’s assets into YesCare, and all its liabilities, including lawsuits like Frederick’s, into Tehum. Frederick’s lawsuit on behalf of her daughter Casey Norred was dragging on, as the defendants requested multiple extensions and sought to dismiss the case. In February 2023, as Corizon faced mounting lawsuits, as well as Covid-related financial distress, the company attempted a bankruptcy maneuver known as the “Texas two-step” and split into two new companies, YesCare and Tehum. Corizon’s private equity owners moved all the company’s assets into YesCare, and all its liabilities, including lawsuits like Frederick’s, into Tehum.
Then Tehum filed for Chapter 11 bankruptcy, effectively pausing all lawsuits against it. Even in a run of the mill bankruptcy case, all lawsuits, including wrongful death claims against the company filing, are automatically paused. Frederick cried when she heard her years-long fight was at a stalemate. “It blew me away,” Frederick said. “In what world are you permitted to put your assets in one pot and your liabilities in the other and declare bankruptcy?” Then Tehum filed for Chapter 11 bankruptcy, in effect pausing all lawsuits against it. Even in a run-of-the-mill bankruptcy case, all lawsuits, including wrongful death claims against the company filing, are automatically paused. Frederick cried when she heard her years-long fight was at a stalemate. “It blew me away,” Frederick said. “In what world are you permitted to put your assets in one pot and your liabilities in the other and declare bankruptcy?”
The move caught the attention of lawmakers. Senators led by Elizabeth Warren wrote an open letter in 2024 to the trustee in the bankruptcy case, expressing concern that Corizon “knowingly has used the ‘Texas Two-Step’ maneuver to attempt to evade the countless wrongful death, medical malpractice, and other tort claims against it, principally to the detriment of incarcerated people who claimed they had been harmed by Corizon.” The company’s initial Chapter 11 bankruptcy proposal would have likely left claimants like Frederick, if they had prevailed, with nothing after all the legal fees and other expenses were paid, according to lawyers representing Frederick and other claimants. The move caught the attention of lawmakers. Senators led by Elizabeth Warren wrote an open letter in 2024 to the trustee in the bankruptcy case, expressing concern that Corizon “knowingly has used the ‘Texas Two-Step’ maneuver to attempt to evade the countless wrongful death, medical malpractice, and other tort claims against it, principally to the detriment of incarcerated people who claimed they had been harmed by Corizon”. The company’s initial Chapter 11 bankruptcy proposal would have probably left claimants like Frederick, if they had prevailed, with nothing after all the legal fees and other expenses were paid, according to lawyers representing Frederick and other claimants.
In November 2024, a year and a half after Corizon filed for bankruptcy, Wellpath, the market leader in prison healthcare also filed for bankruptcy. Their proposed Chapter 11 plan would similarly have left those claimants – like Brady Allen’s family – who had suffered under the company’s allegedly negligent care effectively with nothing if they had prevailed, according to creditors’ lawyers. In November 2024, a year and a half after Corizon filed for bankruptcy, Wellpath, the market leader in prison healthcare also filed for bankruptcy. Their proposed Chapter 11 plan would similarly have left those claimants – like Brady Allen’s family – who had suffered under the company’s allegedly negligent care in effect with nothing if they had prevailed, according to creditors’ lawyers.
Brendan Ballou, a former federal prosecutor and author of Plunder on private equity, said the families faced an especially steep uphill battle. “The legal system in general is awfully complicated, but bankruptcy might be the most complicated,” Ballou explained – especially for people who are incarcerated, and especially for people seeking justice from private-equity backed companies. “The chances are good that the private equity owners are going to be able to essentially walk into the sunset without consequence,” Ballou said. Brendan Ballou, a former federal prosecutor and author of Plunder on private equity, said the families faced an especially steep uphill battle. “The legal system in general is awfully complicated, but bankruptcy might be the most complicated,” Ballou explained – especially for people who are incarcerated, and especially for people seeking justice from private equity-backed companies. “The chances are good that the private equity owners are going to be able to essentially walk into the sunset without consequence,” Ballou said.
But a series of unlikely events meant that stories like Norred’s and Allen’s had an unusual amount of sway in the bankruptcy courts.But a series of unlikely events meant that stories like Norred’s and Allen’s had an unusual amount of sway in the bankruptcy courts.
The bankruptcy code was designed to help ensure that the debtor’s available assets are distributed as fairly as possible among creditors. But as private equity investors continue to drive their acquisitions into bankruptcy, they’re also looking for ways to use the code to squirrel assets away from the people they’ve hurt, according to Ballou. The bankruptcy code was designed to help ensure that the debtor’s available assets are distributed as fairly as possible among creditors. But as private equity investors continue to drive their acquisitions into bankruptcy, they are also looking for ways to use the code to squirrel assets away from the people they have hurt, according to Ballou.
In Corizon’s bankruptcy case, however, unexpected circumstances gave claimants like Frederick a fighting chance. A judge who had been acting as a mediator in the case, who had seemed to favor YesCare, resigned over unethical behavior, inviting scrutiny from lawmakers. Nine senators, led by Senator Warren, wrote an open letter accusing Corizon and its investors of using the bankruptcy system to get out of paying alleged victims. A month later, Frederick got a call. The trustee overseeing the bankruptcy case invited her to join the so-called tort claimants committee (TCC), a group of six members which would have a role in determining the final bankruptcy plan.In Corizon’s bankruptcy case, however, unexpected circumstances gave claimants like Frederick a fighting chance. A judge who had been acting as a mediator in the case, who had seemed to favor YesCare, resigned over unethical behavior, inviting scrutiny from lawmakers. Nine senators, led by Senator Warren, wrote an open letter accusing Corizon and its investors of using the bankruptcy system to get out of paying alleged victims. A month later, Frederick got a call. The trustee overseeing the bankruptcy case invited her to join the so-called tort claimants committee (TCC), a group of six members which would have a role in determining the final bankruptcy plan.
All the committee members had claims against Corizon. Five had wrongful death claims while one, Nathan Alvarez, had served time in an Arizona prison that contracted with Corizon. In 2019, Alvarez fell from his cell bunk. His bone snapped audibly as it broke in two places. When he looked down, his leg was shaped like a “yield sign”, he said. Alvarez’s cellmates had to beat against the walls to get the guards’ attention.All the committee members had claims against Corizon. Five had wrongful death claims while one, Nathan Alvarez, had served time in an Arizona prison that contracted with Corizon. In 2019, Alvarez fell from his cell bunk. His bone snapped audibly as it broke in two places. When he looked down, his leg was shaped like a “yield sign”, he said. Alvarez’s cellmates had to beat against the walls to get the guards’ attention.
Alvarez assumed he was going to the emergency room, but prison staff told him that policy dictated he would need to get an X-ray first, unless there was bone visibly sticking out of his leg. By the time Alvarez saw a doctor, his leg was swollen and inoperable. Alvarez was told to return once the swelling improved, but as he waited out his sentence, he never received treatment. His leg eventually healed – with his foot pointed the wrong way.Alvarez assumed he was going to the emergency room, but prison staff told him that policy dictated he would need to get an X-ray first, unless there was bone visibly sticking out of his leg. By the time Alvarez saw a doctor, his leg was swollen and inoperable. Alvarez was told to return once the swelling improved, but as he waited out his sentence, he never received treatment. His leg eventually healed – with his foot pointed the wrong way.
It would cost $200,000 to rebreak and reset Alvarez’s bones. His lawyers had nearly reached a deal with Corizon, when the bankruptcy put his lawsuit on hold. “After years of fighting, it felt like, oh, that’s it. We’re screwed,” Alvarez said. Joining the TCC gave him a chance to fight back.It would cost $200,000 to rebreak and reset Alvarez’s bones. His lawyers had nearly reached a deal with Corizon, when the bankruptcy put his lawsuit on hold. “After years of fighting, it felt like, oh, that’s it. We’re screwed,” Alvarez said. Joining the TCC gave him a chance to fight back.
Corizon did not respond to the Guardian’s request for comment.Corizon did not respond to the Guardian’s request for comment.
Frederick didn’t expect much from the process, but she would get to say her piece. “I wanted to embarrass them,” she said. Throughout the rest of the case, the TCC would submit documents to the court detailing their stories and opinions on what should happen.Frederick didn’t expect much from the process, but she would get to say her piece. “I wanted to embarrass them,” she said. Throughout the rest of the case, the TCC would submit documents to the court detailing their stories and opinions on what should happen.
The TCC wanted the bankruptcy dismissed, so that everyone with claims against Corizon, including those who were still incarcerated, could have their day in civil court. For two years, the TCC had weekly zoom meetings with their attorneys at Weitz & Luxenberg. They weren’t able to get the case dismissed, but they did get renewed leverage in April 2024, when the new bankruptcy judge rejected YesCare’s proposed reorganization plan, which would have essentially forced Alvarez and Frederick and all the other tort claimants to take a $5,000 settlement. The TCC wanted the bankruptcy dismissed, so that everyone with claims against Corizon, including those who were still incarcerated, could have their day in civil court. For two years, the TCC had weekly zoom meetings with their attorneys at Brown Rudnick. They weren’t able to get the case dismissed, but they did get renewed leverage in April 2024, when the new bankruptcy judge rejected YesCare’s proposed reorganization plan, which would have essentially forced Alvarez and Frederick and all the other tort claimants to take a $5,000 settlement.
Eric Goodman, one of the attorneys representing the TCC, ultimately engaged in an intense back and forth with YesCare to reach a deal that would satisfy most of the victims as well as the debtors. In March, they agreed to a plan and the judge confirmed it – the first ever successful reorganization in a Texas two-step case. At least $25m would go to wrongful death and personal injury claims, manyfold higher than the initial offer. Victims with claims could choose to opt out and pursue a jury trial with no cap on potential settlements.Eric Goodman, one of the attorneys representing the TCC, ultimately engaged in an intense back and forth with YesCare to reach a deal that would satisfy most of the victims as well as the debtors. In March, they agreed to a plan and the judge confirmed it – the first ever successful reorganization in a Texas two-step case. At least $25m would go to wrongful death and personal injury claims, manyfold higher than the initial offer. Victims with claims could choose to opt out and pursue a jury trial with no cap on potential settlements.
Alvarez is happy to have had a role in some kind of victory, although he doubts the settlement, which will be paid in installments over 30 months, will even cover the surgery he needs for his leg. He misses construction work. “I’d love to be able to dig a hole,” he said.Alvarez is happy to have had a role in some kind of victory, although he doubts the settlement, which will be paid in installments over 30 months, will even cover the surgery he needs for his leg. He misses construction work. “I’d love to be able to dig a hole,” he said.
In Wellpath’s case, too, the US trustee overseeing the bankruptcy case wanted to make sure that wrongful death claimants would have a say in the final Chapter 11 bankruptcy plan. During a hearing last December, the trustee said it was important that the bankruptcy provided a fair recovery not just for Wellpath’s lenders, who would typically be prioritized in a bankruptcy case, but for personal injury and wrongful death claimants as well.In Wellpath’s case, too, the US trustee overseeing the bankruptcy case wanted to make sure that wrongful death claimants would have a say in the final Chapter 11 bankruptcy plan. During a hearing last December, the trustee said it was important that the bankruptcy provided a fair recovery not just for Wellpath’s lenders, who would typically be prioritized in a bankruptcy case, but for personal injury and wrongful death claimants as well.
According to Ballou, it’s not typical for claimants like Scott Allen to have much sway in the bankruptcy court. But that might be starting to change.According to Ballou, it’s not typical for claimants like Scott Allen to have much sway in the bankruptcy court. But that might be starting to change.
“They played an enormous role in this case,” said Daniel Desatnik, one of the lawyers representing claimants including Allen in the Wellpath bankruptcy. “The story in this case should be that it is a model for a successful chapter 11 reorganization, where the voices of those who alleged harm were heard and the judge was responsive to it.”“They played an enormous role in this case,” said Daniel Desatnik, one of the lawyers representing claimants including Allen in the Wellpath bankruptcy. “The story in this case should be that it is a model for a successful chapter 11 reorganization, where the voices of those who alleged harm were heard and the judge was responsive to it.”
Claimholders in Wellpath’s bankruptcy case objected to the initial Chapter 11 plan, arguing that the amount of money on offer would not even cover administrative costs of their claims. The final Chapter 11 plan gave them 33% of the reorganized company in addition to $25m in cash and secured debt. Desatnik said he could not go into detail about what kind of role victims of Wellpath’s wrongdoing will have in making company decisions, but that, “They have a say commensurate with what you would expect an owner of that level of equity would have.” Ensuring that the company behaves more ethically was a major consideration as they were negotiating the plan.Claimholders in Wellpath’s bankruptcy case objected to the initial Chapter 11 plan, arguing that the amount of money on offer would not even cover administrative costs of their claims. The final Chapter 11 plan gave them 33% of the reorganized company in addition to $25m in cash and secured debt. Desatnik said he could not go into detail about what kind of role victims of Wellpath’s wrongdoing will have in making company decisions, but that, “They have a say commensurate with what you would expect an owner of that level of equity would have.” Ensuring that the company behaves more ethically was a major consideration as they were negotiating the plan.
It’s an unusual victory, giving victims equity in the company that hurt them. Not every victim will get a share of the bankruptcy settlements, either – those who filed their lawsuits too late in the bankruptcy process will not be able to pursue their claims.It’s an unusual victory, giving victims equity in the company that hurt them. Not every victim will get a share of the bankruptcy settlements, either – those who filed their lawsuits too late in the bankruptcy process will not be able to pursue their claims.
And while the prison healthcare companies themselves had to restructure and pay settlements, it was unclear how much their private equity owners lost in the bankruptcy deals. According to Ballou, even if on paper it looks like they lost their investment, they could have gotten quite a bit back in fees they leveraged from their investments, but most of those details remain hidden. Samir Parikh, a law professor and bankruptcy expert at Wake Forest University, said that bankruptcy courts are “not the ideal check on bad behavior, because the harm has already been realized”. And while the prison healthcare companies themselves had to restructure and pay settlements, it was unclear how much their private equity owners lost in the bankruptcy deals. According to Ballou, even if on paper it looks like they lost their investment, they could have gotten quite a bit back in fees they leveraged from their investments, but most of those details remain hidden. Samir Parikh, a law professor and bankruptcy expert at Wake Forest University, said that bankruptcy courts were “not the ideal check on bad behavior, because the harm has already been realized”.
Just a few months ago, Frederick received a paper bag from the Leon county jail with her daughter’s belongings. She could not bring herself to look inside, but she also could not throw it away. “I’m sure this is clothing I’ve seen her wear before, and it would make me sad,” Frederick said during a phone interview, adding, “Maybe I’ll look at it when we hang up.”Just a few months ago, Frederick received a paper bag from the Leon county jail with her daughter’s belongings. She could not bring herself to look inside, but she also could not throw it away. “I’m sure this is clothing I’ve seen her wear before, and it would make me sad,” Frederick said during a phone interview, adding, “Maybe I’ll look at it when we hang up.”
Frederick plans to donate some of the settlement money to an animal rescue, which is what Norred would have wanted. One day in middle school, Norred came home and announced she was a vegetarian. Frederick thought it was a phase, but it stuck.Frederick plans to donate some of the settlement money to an animal rescue, which is what Norred would have wanted. One day in middle school, Norred came home and announced she was a vegetarian. Frederick thought it was a phase, but it stuck.
When Norred was alive and mentally OK, she was known to be kind, vivacious and an “exquisite dancer” at the blues club where she worked, her mother recalled. Her funeral was so crowded it was standing room only.When Norred was alive and mentally OK, she was known to be kind, vivacious and an “exquisite dancer” at the blues club where she worked, her mother recalled. Her funeral was so crowded it was standing room only.