Joint Effort By Cooley’s Bankruptcy and Healthcare Teams Successfully Represented Unsecured Creditors

Cooley represented the Official Committee of Unsecured Creditors of Health Diagnostic Laboratory, or HDL, a national laboratory founded in 2008 that offered an advanced panel of tests that provided a basis for early detection, effective treatment and reversal of a number of diseases. Although HDL initially had extraordinary financial performance, its business practices, including the payment of fees to physicians in connection with blood draws and processing and handling of samples, became the subject of a special fraud alert issued by the federal government and an investigation by the US Department of Justice. HDL filed for Chapter 11 relief on June 7, 2015, in the wake of a multimillion-dollar settlement with the DOJ and declining financial performance after HDL ceased its improper practices. Cooley guided the committee through HDL's difficult bankruptcy case, ultimately resulting in the sale of substantially all of HDL's assets for more than $37 million. Cooley negotiated, and the bankruptcy court recently confirmed, a liquidating plan that preserves claims against various parties, including the debtors' former officers, directors and shareholders and certain affiliated entities for their roles in implementing and/or aiding and abetting improper business practices. These claims may exceed $600 million and provide the basis for substantial recovery to unsecured creditors.

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