rdd Doc 920 Filed 01/16/18 Entered 01/16/18 23:51:09 Main Document Pg 1 of 38

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1 Pg 1 of 38 Hearing Date and Time: January 30, 2018 at 10:00 a.m. (prevailing Eastern Time) Objection Deadline: January 27, 2018 at 4:00 p.m. (prevailing Eastern Time) Christopher Marcus, P.C. James H.M. Sprayregen, P.C. John T. Weber William A. Guerrieri (admitted pro hac vice) KIRKLAND & ELLIS LLP Alexandra Schwarzman (admitted pro hac vice) KIRKLAND & ELLIS INTERNATIONAL LLP KIRKLAND & ELLIS LLP 601 Lexington Avenue KIRKLAND & ELLIS INTERNATIONAL LLP New York, New York North LaSalle Street Telephone: (212) Chicago, Illinois Facsimile: (212) Telephone: (312) Facsimile: (312) Counsel to the Debtors and Debtors in Possession UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK ) In re: ) Chapter 11 ) 21st CENTURY ONCOLOGY HOLDINGS, INC., et al., 1 ) Case No (RDD) ) Debtors. ) (Jointly Administered) ) NOTICE OF DEBTORS MOTION FOR ENTRY OF AN ORDER (A) ESTABLISHING THE MAXIMUM UNSECURED CLAIMS AMOUNT AND THE DISPUTED CLAIMS RESERVE FOR THE PURPOSE OF MAKING DISTRIBUTIONS OF THE NEW COMMON STOCK, (B) AUTHORIZING THE DEBTORS TO MAKE DISTRIBUTIONS OF THE NEW COMMON STOCK ON ACCOUNT OF ALLOWED UNSECURED CLAIMS, AND (C) GRANTING RELATED RELIEF PLEASE TAKE NOTICE that on January 16, 2017, The above-captioned debtors (together with the Reorganized Debtors, as applicable, the Debtors ), filed the Debtors Motion for Entry of an Order (A) Establishing the Maximum Unsecured Claims Amount and the Disputed Claims Reserve for the Purpose of Making Distributions of the New Common Stock, (B) Authorizing the Debtors to Make Distributions of the New Common Stock on Account of 1 Each of the Debtors in the above-captioned jointly administered chapter 11 cases and their respective tax identification numbers are set forth in the Order Directing Joint Administration of Chapter 11 Cases [Docket No. 30]. The location of 21st Century Oncology Holdings s corporate headquarters and the Debtors service address is: 2270 Colonial Boulevard, Fort Myers, Florida

2 Pg 2 of 38 Allowed Unsecured Claims, and (C) Granting Related Relief (the Motion ). A hearing on the Motion will be held before the Honorable Robert D. Drain of the United States Bankruptcy Court for the Southern District of New York (the Court ), 300 Quarropas Street, White Plains, New York 10601, on January 30, 2017, at 10:00 a.m. (prevailing Eastern Time). PLEASE TAKE FURTHER NOTICE that any responses or objections to the Motion (each, an Objection ) shall be in writing, shall conform to the Federal Rules of Bankruptcy Procedure, the Local Bankruptcy Rules for the Southern District of New York, and the Final Order (I) Establishing Certain Notice, Case Management, and Administrative Procedures and (II) Granting Related Relief [Docket No. 125] (the Case Management Order ), and shall be filed with the Court (a) by registered users of the Bankruptcy Court s case filing system, electronically in accordance with General Order M 399 (which can be found at and (b) by all other parties in interest, on a CD-ROM, in text-searchable portable document format (PDF) (with a hard copy delivered directly to Chambers as set forth in the Case Management Order), in accordance with the customary practices of the Bankruptcy Court and General Order M 399, to the extent applicable, and served so as to be actually received no later than January 27, 2017, at 4:00 p.m. (prevailing Eastern Time) (the Objection Deadline ) on each of the Affected Entities (as defined in the Case Management Order). PLEASE TAKE FURTHER NOTICE that if no Objections or other responses are timely filed and served with respect to the Motion, the Debtors shall, on or after the Objection Deadline, submit to the Court an order substantially in the form annexed as Exhibit A to the Motion, which order the Court may enter without further notice or opportunity to be heard. 2

3 Pg 3 of 38 PLEASE TAKE FURTHER NOTICE that the Hearing may be continued or adjourned thereafter from time to time without further notice other than an announcement of the adjourned date or dates in open court at the Hearing. PLEASE TAKE FURTHER NOTICE that copies of the Motion and Case Management Order may be obtained free of charge by visiting the website of Kurtzman Carson Consultants LLC, at You may also obtain copies of any pleadings by visiting the Court s website at in accordance with the procedures and fees set forth therein. New York, New York Dated: January 16, 2018 /s/ Christopher Marcus, P.C. Christopher Marcus, P.C. John T. Weber KIRKLAND & ELLIS LLP KIRKLAND & ELLIS INTERNATIONAL LLP 601 Lexington Avenue New York, New York Telephone: (212) Facsimile: (212) and - James H.M. Sprayregen, P.C. William A. Guerrieri (admitted pro hac vice) Alexandra Schwarzman (admitted pro hac vice) KIRKLAND & ELLIS LLP KIRKLAND & ELLIS INTERNATIONAL LLP 300 North LaSalle Street Chicago, Illinois Telephone: (312) Facsimile: (312) Counsel to the Debtors and Debtors in Possession 3

4 Pg 4 of 38 Hearing Date and Time: January 30, 2018 at 10:00 a.m. (prevailing Eastern Time) Objection Deadline: January 27, 2018 at 4:00 p.m. (prevailing Eastern Time) Christopher Marcus, P.C. James H.M. Sprayregen, P.C. John T. Weber William A. Guerrieri (admitted pro hac vice) KIRKLAND & ELLIS LLP Alexandra Schwarzman (admitted pro hac vice) KIRKLAND & ELLIS INTERNATIONAL LLP KIRKLAND & ELLIS LLP 601 Lexington Avenue KIRKLAND & ELLIS INTERNATIONAL LLP New York, New York North LaSalle Street Telephone: (212) Chicago, Illinois Facsimile: (212) Telephone: (312) Facsimile: (312) Counsel to the Debtors and Debtors in Possession UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK ) In re: ) Chapter 11 ) 21st CENTURY ONCOLOGY HOLDINGS, INC., et al., 1 ) Case No (RDD) ) Debtors. ) (Jointly Administered) ) DEBTORS MOTION FOR ENTRY OF AN ORDER (A) ESTABLISHING THE MAXIMUM UNSECURED CLAIMS AMOUNT AND THE DISPUTED CLAIMS RESERVE FOR THE PURPOSE OF MAKING DISTRIBUTIONS OF THE NEW COMMON STOCK, (B) AUTHORIZING THE DEBTORS TO MAKE DISTRIBUTIONS OF THE NEW COMMON STOCK ON ACCOUNT OF ALLOWED UNSECURED CLAIMS, AND (C) GRANTING RELATED RELIEF The above-captioned debtors (together with the Reorganized Debtors, as applicable, the Debtors ) file this motion (this Motion ) for entry of an order, substantially in the form attached hereto as Exhibit A: (a) establishing the Maximum Unsecured Claims Amount and the Disputed Claims Reserve (each defined below) for the purpose of making distributions of the New Common Stock to holders of allowed Class 5 Claims (Note Claims) and Class 6 Claims (General Unsecured Claims) participating in the equity distribution in accordance with the 1 Each of the Debtors in the above-captioned jointly administered chapter 11 cases and their respective tax identification numbers are set forth in the Order Directing Joint Administration of Chapter 11 Cases [Docket No. 30]. The location of 21st Century Oncology Holdings s corporate headquarters and the Debtors service address is: 2270 Colonial Boulevard, Fort Myers, Florida

5 Pg 5 of 38 Joint Chapter 11 Plan of Reorganization of 21st Century Oncology Holdings, and Its Debtor Affiliates [Docket No. 554, Exhibit A] (the Plan ); 2 (b) authorizing the Debtors to make, or cause to be made, distributions of the New Common Stock consistent with the Maximum Unsecured Claims Amount, and (c) granting related relief. In support of this Motion, the Debtors respectfully state as follows: Jurisdiction 1. The United States Bankruptcy Court for the Southern District of New York (the Court ) has jurisdiction over this matter pursuant to 28 U.S.C. 157 and 1334 and the Amended Standing Order of Reference from the United States District Court for the Southern District of New York, dated December 1, The Debtors confirm their consent, pursuant to Rule 7008 of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules ), to the entry of a final order by the Court in connection with this Motion to the extent that it is later determined that the Court, absent consent of the parties, cannot enter final orders or judgments in connection herewith consistent with Article III of the United States Constitution. 2. Venue is proper pursuant to 28 U.S.C and The statutory bases for the relief requested herein are sections 105(a) and 1142 of title 11 of the United States Code, 11 U.S.C (the Bankruptcy Code ). Relief Requested 4. By this Motion, the Debtors request entry of the order, substantially in the form attached hereto as Exhibit A (the Proposed Order ): (a) establishing the Maximum Unsecured Claims Amount and the Disputed Claims Reserve; (b) authorizing the Debtors to make, or cause 2 Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Plan. 2

6 Pg 6 of 38 to be made, distributions of the New Common Stock consistent with the Maximum Unsecured Claims Amount; and (c) granting related relief. Background 5. On May 25, 2017 (the Petition Date ), each of the Debtors filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code. The Debtors are operating their businesses and managing their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. On May 26, 2017, the Court entered an order authorizing the joint administration and procedural consolidation of the Chapter 11 Cases pursuant to Bankruptcy Rule 1015(b) [Docket No. 30]. No request for the appointment of a trustee or examiner has been made in these Chapter 11 Cases. On June 15, 2017, the Office of the United States Trustee appointed the official committee of unsecured creditors in these Chapter 11 Cases (the Committee ) [Docket Nos. 92, 94]. 6. On October 17, 2017, the Court entered the Disclosure Statement Order. Upon entry of the Disclosure Statement Order, the Debtors solicited their creditors for acceptance of the Plan. On December 21, 2017, the Debtors filed the Amended Certification of James Lee With Respect to the Tabulation of Votes on the Joint Chapter 11 Plan of Reorganization of 21st Century Oncology Holdings, and Its Debtor Affiliates [Docket No. 865], reflecting that the overwhelming majority of impaired classes of creditors entitled to vote on the Plan voted to accept the Plan, including Class 6 General Unsecured Claims at the vast majority of Debtors. On January 11, 2018, the Court entered an order confirming the Plan [Docket No. 915]. The New Common Stock Distribution and Unsecured Claim Amounts 7. Pursuant to the terms of the Plan, holders of Allowed Class 5 Note Claims and Allowed Class 6 General Unsecured Claims who made the New Common Stock Election, or would otherwise receive a distribution in the form of the New Common Stock pursuant to the 3

7 Pg 7 of 38 terms of the Plan, are entitled to receive a distribution of 100% of the New Common Stock issued on the Effective Date (subject to dilution by the New Common Stock issuable upon conversion of the New Preferred Equity, the New Common Stock issuable upon exercise of the New Warrants (if any), and the Management Incentive Plan Equity). 3 In order to make a meaningful and timely initial distribution of the New Common Stock, the Debtors request that the Court establish a maximum potential total of such Class 5 Claims (Note Claims) and Class 6 Claims (General Unsecured Claims). 8. As of the Governmental Bar Date, there were: (a) a total of not less than $412,647,391 in Allowed Note Claims, and (b) an aggregate face amount of $442,589, in General Unsecured Claims, plus contingent and unliquidated amounts, that were timely filed or otherwise scheduled that, if Allowed, will receive New Common Stock under the Plan. During the course of these Chapter 11 Cases, the Debtors reached numerous settlements with holders of General Unsecured Claims, including the United States and its agencies, the members of the Ad Hoc Creditor Group (as defined in the Disclosure Statement), and various personal injury claimants. These settlements reduced the aggregate face amount of General Unsecured Claims asserted against the Debtors estates that are eligible to receive New Common Stock pursuant to the Plan, if Allowed (x) in an amount greater than $1,000,000 per any such Claim or (y) in any amount if the holder of any such Claim made the New Common Stock Election, from $442,589, to $86,787, (such reduced face amount of General Unsecured Claims, the Disputed Liquidated Claims ). Upon reviewing the asserted value of all Disputed Liquidated Claims against the Debtors estates, the Debtors and their advisors have determined 3 See Plan, Article III. 4

8 Pg 8 of 38 as a matter of efficiency to reserve for the Disputed Liquidated Claims at their full asserted amounts (such amounts, the Reserved Liquidated Claim Amounts ). 9. Additionally, out of the approximately 5,301 Claims against the Debtors in these Chapter 11 Cases, there are approximately 324 General Unsecured Claims that were filed in a partially or wholly unliquidated, contingent, or zero-dollar amount (collectively, the Disputed Unliquidated Claims and, together with the Disputed Liquidated Claims, the Equity GUC Claims ). The Debtors and their advisors have conducted a preliminary review of the Disputed Unliquidated Claims and, as result of that analysis, have determined an appropriate amount to reserve for each such Claim (collectively, the Reserved Unliquidated Claim Amounts and, together with the Reserved Liquidated Claim Amounts, the Reserved Claim Amounts ). Generally, in the case of a partially liquidated or contingent Disputed Unliquidated Claim, the Reserved Unliquidated Claim Amount equals the non-contingent, liquidated portion of each such Claim. In the case of a Disputed Unliquidated Claim that was filed in a wholly unliquidated or contingent amount, or at zero dollars, the Reserved Unliquidated Claim Amount for such Claim equals a conservative estimate (as set forth in Schedule 1 to the Proposed Order and for the reasons stated herein and therein) of the maximum potential amount at which such Claim would be Allowed. The Debtors believe that the unliquidated or contingent portions of the Disputed Unliquidated Claims are generally either meritless or assert amounts far in excess of the amounts to which the holder of such Claim is entitled and, in many cases, are merely speculative and/or protective in nature. The Debtors assert that such a speculative and/or protective reservation of rights (particularly more than four months after the Claims Bar Date) is not indicative of actual amounts owed. 5

9 Pg 9 of A schedule setting forth the Disputed Liquidated Claims, the Disputed Unliquidated Claims and the Reserved Claim Amounts is attached as Schedule 1 to the Proposed Order. There are no trade Claims listed on Schedule 1 to the Proposed Order, as the Debtors are not aware of any trade Claims that are General Unsecured Claims that would be entitled to receive New Common Stock because all such Claims were either (a) satisfied as Administrative Claims, (b) asserted in amounts less than $1 million per claim or (c) the holders of such claim elected to receive Convenience Claim treatment pursuant to the Plan. Additionally, the Debtors have not reserved any amounts for the Claims filed by David Di Pietro [Claim Nos. 2502, 2503, and 2504] because, as discussed in the Debtors Motion to Dismiss Complaint to Determine Dischargeability of Debt Pursuant to 11 U.S.C. 1141(d)(6) [Adv. Proc (RDD); Docket No. 13], the Debtors assert that they do not owe any amounts Mr. Di Pietro. 11. Furthermore, the Debtors have reserved $ 1 million for each of the Claims classified as Insurer Claims on Schedule 1 to the Proposed Order. This represents a conservative estimate of any unpaid deductibles or self-insured retention amounts related to matters arising prepetition under the respective insurance policies. 12. Finally, the Debtors have cross-referenced all filed litigation Claims against their books and records and reserved amounts for those Claims for which they have records, as indicated on Schedule 1 to the Proposed Order. Pursuant to the Plan, the Debtors anticipate that all such Claims will be satisfied by the proceeds of the Debtors insurance policies; nonetheless, the Debtors have reserved amounts out of an abundance of caution in the event that any litigation claimant is awarded a judgment in excess of available applicable insurance. 13. In addition to the Claims set forth on Schedule 1 to the Proposed Order, the Debtors received Proofs of Claim from a number of individuals with no dollar amounts asserted 6

10 Pg 10 of 38 and no supporting documentation (the Individual Claims ). The Debtors have examined their books and records and do not have any record of the Individual Claims. The Debtors plan to object to the Individual Claims in the near future, and in any case to do not expect any such Claims to be Allowed in an amount greater than $1 million, and accordingly, the Debtors have not set aside any Reserved Claim Amounts for the Individual Claims. The Individual Claims are set forth on Schedule 2 to the Proposed Order. 14. Assuming all Disputed Liquidated Claims and Disputed Unliquidated Claims set forth on Schedule 1 to the Proposed Order are Allowed at their respective Reserved Claim Amounts, the total amount of Equity GUC Claims would be $118,787, (the Maximum Equity GUC Claims Amount ). 4 Adding the Maximum Equity GUC Claims Amount to the total amount of the Allowed Note Claims ($412,647,391) results in a total amount of unsecured Claims actually or potentially entitled to the distribution of the New Common Stock under the Plan of $531,435, (the Maximum Unsecured Claims Amount ). 15. The vast majority of unsecured Claims against the Debtors estates entitled to receive New Common Stock under the Plan consist of Allowed Note Claims. Based on the conservative reserve estimates for the Reserved Claim Amounts (which include reserves for each Disputed Liquidated Claim in its respective liquidated amount), the Allowed Note Claims would still be entitled to receive not less than approximately 77.65% of the New Common Stock distributed under the Plan (the Minimum Note Claims Distribution Percentage ). 4 The Maximum Equity GUC Claims Amount is not indicative of the Debtors estimate of what amount of all Equity GUC Claims will be Allowed. Rather, the Maximum Equity GUC Claims Amount represents the Debtors estimate of the maximum liability that has been or could reasonably be asserted by the claimants on account of such Claims. By this Motion, the Debtors are not proposing to Allow the Equity GUC Claims at the Maximum Equity GUC Claims Amount, and the Debtors anticipate that substantive objections will be filed against a substantial number of these Claims that will result in the Disallowance of such Claims. The Debtors reserve all of their rights to object to the validity, nature, amount or priority of any or all Equity GUC Claims either in whole or in part, or to seek to estimate any and all Equity GUC Claims at lesser amounts. 7

11 Pg 11 of Because the reconciliation process with respect to the Equity GUC Claims is still ongoing, without the relief requested herein, the Debtors ability to effectuate timely distributions of New Common Stock to holders of Allowed unsecured Claims following the Effective Date could be delayed for an indefinite period of time. Thus, the Debtors believe it is appropriate to make an initial distribution of New Common Stock to holders of the Allowed Note Claims in the amount of the Minimum Note Claims Distribution Percentage of all of the New Common Stock issued on the Effective Date, rather than force such holders to wait until the entire Claims reconciliation process concludes. 17. As described above, the Debtors have determined to reserve for the Equity GUC Claims (including the Disputed Unliquidated Claims) in the manner set forth in Schedule 1 to the Proposed Order to enable the Debtors to make an initial distribution of the New Common Stock to the holders of Allowed Note Claims in a timely fashion after the Effective Date. The Debtors will reserve an amount of New Common Stock sufficient to satisfy each Equity GUC Claim pursuant to the terms of the Plan in an amount equal to the Reserved Claim Amount for each such Claim (such aggregate amount of New Common Stock to be reserved, the Aggregate Reserve Amount ), which, in the aggregate, is an amount of New Common Stock equal to not more than approximately 22.35% of the New Common Stock issued on the Effective Date. New Common Stock in an amount equal to the Aggregate Reserve Amount will be held in a reserve account (the Disputed Claims Reserve ) established on the Effective Date by the Reorganized Debtors stock transfer agent, as nominee for the holders entitled to receive such New Common Stock, until the Claims (or any portion thereof) of such holders are Allowed (x) in an amount greater than $1,000,000 per any such Claim or (y) in any amount if the holder of any such Claim made the New Common Stock Election, whereupon the stock transfer agent shall distribute such 8

12 Pg 12 of 38 New Common Stock to such holders in accordance with such instructions as are agreed upon between such stock transfer agent and the Reorganized Debtors. Upon a preliminary analysis of the merits of the Equity GUC Claims, the Debtors believe that the Aggregate Reserve Amount is a conservative estimate and the Debtors expect the aggregate amount of Equity GUC Claims that are ultimately Allowed to be considerably lower than the Maximum Equity GUC Claims Amount associated with the Aggregate Reserve Amount. 18. The Debtors propose that the Disputed Claims Reserve function as an aggregate reserve of New Common Stock for all Equity GUC Claims. Thus, New Common Stock held in the Disputed Claims Reserve would be available for the satisfaction of all subsequently Allowed Equity GUC Claims. To the extent the Debtors have underestimated the amount that should be attributed to a Disputed Unliquidated Claim, the likely overestimation with respect to other Equity GUC Claims (including the Disputed Liquidated Claims, each of which will be reserved for in its full Reserved Liquidated Claim Amount) will mean that sufficient New Common Stock should be available to address all Equity GUC Claims that become Allowed Claims after the Effective Date (x) in an amount greater than $1,000,000 per any such Claim or (y) in any amount if the holder of any such Claim made the New Common Stock Election. The Debtors believe this framework, together with the overly conservative Aggregate Reserve Amount, ensures that all Equity GUC Claims will receive fair and equal treatment under the Plan. 19. Based on the above, the Debtors believe the Maximum Unsecured Claim Amount allows the Debtors to set a more than sufficient reserve to ensure that all Equity GUC Claims against the Debtors estates, if and when Allowed (x) in an amount greater than $1,000,000 per any such Claim or (y) in any amount if the holder of any such Claim made the New Common Stock Election, will receive their Pro Rata Share of the New Common Stock consistent with the 9

13 Pg 13 of 38 terms of the Plan. As such, the Debtors request that the Court authorize the Debtors to disburse, or cause to be disbursed (including by or through the Reorganized Debtors stock transfer agent), as soon as reasonably practicable, the Minimum Note Claims Distribution Percentage of all of the New Common Stock issued on the Effective Date on account of the $412,647,391 in Allowed Note Claims and approve the Aggregate Reserve Amount of 22.35% of all of the New Common Stock issued on the Effective Date, which is sufficient to satisfy the aggregate Reserved Claim Amounts of $118,787, for the remaining Equity GUC Claims to the extent such Claims are Allowed (x) in an amount greater than $1,000,000 per any such Claim or (y) in any amount if the holder of any such Claim made the New Common Stock Election. 20. The Maximum Unsecured Claims Amount, once approved and established, will permit an initial distribution (and subsequent periodic distributions) to holders of Allowed unsecured Claims, while at the same time maintaining more than sufficient amounts of New Common Stock to be distributed to holders of Equity GUC Claims if and when those claims are Allowed (x) in an amount greater than $1,000,000 per any such Claim or (y) in any amount if the holder of any such Claim made the New Common Stock Election. If an Equity GUC Claim (or any portion thereof) becomes an Allowed General Unsecured Claim after the date of the initial distribution (x) in an amount greater than $1,000,000 per any such Claim or (y) in any amount if the holder of any such Claim made the New Common Stock Election, a subsequent distribution of New Common Stock will be made on account of such Claim (or portion thereof) to the holder of such Claim on the Effective Date. 21. Further, after each Equity GUC Claim has been finally Allowed (in full or in part) or Disallowed and an initial distribution of New Common Stock has been made on account of each such Allowed Claim the holder of which is entitled to receive distributions of New 10

14 Pg 14 of 38 Common Stock on account of such Allowed Claim pursuant to the Plan, each holder of any such Allowed Claim shall receive, in addition to any prior distributions of New Common Stock such holder has already received on account of its Allowed Claim, its pro rata share (based on the proportion that such holder s Allowed Claim bears to the aggregate amount of all Allowed Claims that are eligible to receive distributions of New Common Stock pursuant to the Plan) of any excess New Common Stock remaining in the Disputed Claims Reserve. Basis for Relief 22. Sections 1142(b) and 105(a) of the Bankruptcy Code provide the Court broad authority over the property of the estate dealt with under the Plan and to issue any order necessary to implement the provisions of the Bankruptcy Code and the Plan. Section 1142(b) of the Bankruptcy Code provides: 11 U.S.C. 1142(b). The Court may direct the debtor and any other necessary party to execute or deliver or to join in the execution or delivery of any instrument required to effect a transfer of property dealt with by a confirmed plan, and to perform any other act, including the satisfaction of any lien, that is necessary to the consummation of the plan. 23. The effect of section 1142(b) of the Bankruptcy Code is to provide the Court with a broad jurisdictional grant to implement the terms of a confirmed plan. See Hosp. & Univ. Prop. Damage Claimants v. Johns-Manville Corp. (In re Johns-Manville Corp.), 7 F.3d 32, 34 (2d Cir. 1993) (finding that bankruptcy courts retain post-confirmation jurisdiction to the extent provided by the plan); In re Oversight & Control Comm n of Avanzit, S.A., 385 B.R. 525, 535 (Bankr. S.D.N.Y. 2008) ( The bankruptcy court retains jurisdiction under 11 U.S.C. 1142(b)... and it has continuing responsibilities to satisfy itself that the [p]lan is being properly implemented. (quoting Findley v. Blinken (In re Joint E. & S. Dist. Asbestos Litig.), 982 F.2d 721, 750 (2d Cir. 1992))); Penthouse Media Group v. Guccione (In re Gen. Media, ),

15 Pg 15 of 38 B.R. 66, 73 (Bankr. S.D.N.Y. 2005) (finding that bankruptcy courts retain post-confirmation jurisdiction to matters related to the implementation of a plan); In re Petition of Board of Dirs. of Hopewell Int l Ins., Ltd., 272 B.R. 396, 407 n.1 1 (Bankr. S.D.N.Y. 2002) ( [T]he court may direct parties to perform any act necessary to consummate the plan. (citing 11 U.S.C. 1142(b))). Accordingly, the Court has the authority to issue orders necessary to implement the Plan, including an order establishing the Maximum Unsecured Claims Amount and approving the Disputed Claims Reserve. 24. Likewise, section 105(a) of the Bankruptcy Code provides that the Court may issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title. 11 U.S.C This broad grant of authority is meant to enable courts to issue orders to ensure the prompt administration of the estate and equitable distribution of the assets. See, e.g., Adelphia Bus. Solutions, v. Abnos, 482 F.3d 602, 609 (2d Cir. 2007) ( Section 105(a) grants broad equitable power to the bankruptcy courts to carry out the provisions of the Bankruptcy Code so long as that power is exercised within the confines of the Bankruptcy Code. ); Smart World Techs., LLC v. Juno Online Servs., (In re Smart World Techs., LLC), 423 F.3d 166, 183 (2d Cir. 2005) ( Section 105 grants the bankruptcy court equitable powers to implement the provisions of the Bankruptcy Code.... ). 25. Furthermore, the Court has authority to establish the Maximum Unsecured Claims Amount and the Disputed Claims Reserve and authorize distributions consistent with the Plan. Section 502(c) of the Bankruptcy Code not only empowers the Court to estimate certain Claims, but requires such estimation where the fixing or liquidation of such Claim absent estimation would unduly delay the administration of the case. 11 U.S.C. 502(c). Here, given the fixed amount of consideration, unless the Court enters an order approving the Maximum Unsecured 12

16 Pg 16 of 38 Claim Amount, distributions of the New Common Stock would be delayed until the last Equity GUC Claim is resolved. Courts in this District and others have granted relief substantially similar to the relief sought herein. In re Residential Capital, LLC, Case No (MG) (Bankr. S.D.N.Y. Oct. 26, 2016) (authorizing reorganized debtors to make an interim distribution and establish a disputed claims reserve); In re Magnum Hunter Resources Corporation, Case No (KG) (Bankr. D. Del. Oct. 21, 2016) (authorizing reorganized debtors to establish a maximum amount for certain unliquidated claims for purposes of making distributions); In re Hawker Beechcraft,, Case No (SMB) (Bankr. S.D.N.Y. Sept. 24, 2015) (authorizing reorganized debtors to make an interim distribution and establish a disputed claims reserve). Additionally, Courts have estimated claims for other purposes, including in connection with setting appropriate reserves for voting, feasibility, or distribution purposes. See, e.g., In re Lomas Fin. Corp., 172 B.R. 3, 4 (S.D.N.Y. 1994) (noting that court had estimated certain claims for purposes of setting reserve); In re Adelphia Commc ns Corp., 368 B.R. 140, (Bankr. S.D.N.Y. 2007) (estimating creditor s claim for future expenses for purposes of establishing reserve); In re Enron Corp., No (AJG), 2006 WL , at * 1 (Bankr. S.D.N.Y. Jan. 17, 2006) (approving debtors motion to estimate claims for purposes of establishing reserves). 26. Establishing the Maximum Unsecured Claims Amount and the Disputed Claims Reserve as proposed in this Motion is reasonable and will facilitate the implementation of the Plan and is necessary for the Debtors to make interim distributions of the New Common Stock. The Debtors proposal to set the Maximum Unsecured Claims Amount provides protection to holders of Equity GUC Claims that they will receive amounts they are due if such Equity GUC Claims become Allowed (x) in an amount greater than $1,000,000 per any such Claim or (y) in 13

17 Pg 17 of 38 any amount if the holder of any such Claim made the New Common Stock Election, while still permitting the Debtors to make a meaningful distribution of the New Common Stock to the holders of Allowed Note Claims, and to holders of Equity GUC Claims as they become Allowed (x) in an amount greater than $1,000,000 per any such Claim or (y) in any amount if the holder of any such Claim made the New Common Stock Election, in a fair and timely fashion. 27. The Debtors submit that the portion of the Aggregate Reserve Amount applicable to each Equity GUC Claim, as set forth on Schedule 1 to the Proposed Order, is reasonable and appropriate. Accordingly, the Court can and should approve the proposed Maximum Unsecured Claims Amount and the Disputed Claims Reserve, and authorize the Debtors to make an initial distribution of New Common Stock in the amount of the Minimum Note Claims Distribution Percentage of all of the New Common Stock issued on the Effective Date to holders of Allowed Note Claims on the Effective Date (or as soon as reasonably practicable thereafter) and subsequent, periodic distributions of New Common Stock from the Disputed Claims Reserve, in each case, consistent with the Maximum Unsecured Claims Amount and consistent with the terms of the Plan. Motion Practice 28. This Motion includes citations to the applicable rules and statutory authorities upon which the relief requested herein is predicated and a discussion of their application to this Motion. Accordingly, the Debtors submit that this Motion satisfies Rule (a) of the Local Bankruptcy Rules for the Southern District of New York. Notice 29. The Debtors have provided notice of this motion to: (a) the United States Trustee for Region 2; (b) Counsel to the Committee; (c) counsel to the agent under the Debtors postpetition financing facility; (d) counsel to the ad hoc committee of lenders under the Debtors 14

18 Pg 18 of 38 prepetition 21C secured credit facility; (e) counsel to the administrative agent under the Debtors prepetition 21C secured credit facility; (f) counsel to the ad hoc committee of crossover lenders and noteholders; (g) the indenture trustee for the Debtors 11% senior notes due 2023; (h) the holders of the Debtors SFRO PIK Notes; (i) the United States Attorney for the Southern District of New York; (j) the United States Securities and Exchange Commission; (k) the state attorneys general for states in which the Debtors conduct business; (l) the Internal Revenue Service; (m) all holders of Equity GUC Claims; and (n) any party that has requested notice pursuant to Bankruptcy Rule In light of the nature of the relief requested, the Debtors respectfully submit that no further notice is necessary. No Prior Request 30. No prior request for the relief sought in this Motion has been made to this or any other court. [Remainder of page intentionally left blank.] 15

19 Pg 19 of 38 WHEREFORE, the Debtors respectfully request that the Court enter the Proposed Order, substantially in the form attached hereto as Exhibit A, granting the relief requested herein and granting such other relief as is just and proper. New York, New York Dated: January 16, 2018 /s/ Christopher Marcus, P.C. Christopher Marcus, P.C. John T. Weber KIRKLAND & ELLIS LLP KIRKLAND & ELLIS INTERNATIONAL LLP 601 Lexington Avenue New York, New York Telephone: (212) Facsimile: (212) and - James H.M. Sprayregen, P.C. William A. Guerrieri (admitted pro hac vice) Alexandra Schwarzman (admitted pro hac vice) KIRKLAND & ELLIS LLP KIRKLAND & ELLIS INTERNATIONAL LLP 300 North LaSalle Street Chicago, Illinois Telephone: (312) Facsimile: (312) Counsel to the Debtors and Debtors in Possession 16

20 Pg 20 of 38 EXHIBIT A Proposed Order

21 Pg 21 of 38 UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK ) In re: ) Chapter 11 ) 21st CENTURY ONCOLOGY HOLDINGS, INC., et al., 1 ) Case No (RDD) ) Debtors. ) Jointly Administered ) ORDER (A) ESTABLISHING THE MAXIMUM UNSECURED CLAIMS AMOUNT AND THE DISPUTED CLAIMS RESERVE FOR THE PURPOSE OF MAKING DISTRIBUTIONS OF THE NEW COMMON STOCK, (B) AUTHORIZING THE DEBTORS TO MAKE DISTRIBUTIONS OF THE NEW COMMON STOCK ON ACCOUNT OF ALLOWED UNSECURED CLAIMS, AND (C) GRANTING RELATED RELIEF Upon the motion (the Motion ) 2 of above-captioned debtors (together with the Reorganized Debtors, as applicable, the Debtors ), for entry of an order (this Order ): (a) establishing the Maximum Unsecured Claims Amount and the Disputed Claims Reserve; (b) authorizing the Debtors to make distributions of the New Common Stock consistent with the Maximum Unsecured Claims Amount; and (c) granting related relief, all as more fully set forth in the Motion; and the Court having jurisdiction to consider the Motion and the relief requested therein in accordance with 28 U.S.C. 157 and 1334; and the Amended Standing Order of Reference from the United States District Court for the Southern District of New York, dated December 1, 2016; and consideration of the Motion and the relief requested therein being a core proceeding pursuant to 28 U.S.C. 157(b)(2); and venue being proper in this district pursuant to 28 U.S.C and 1409; and due and proper notice of the Motion being adequate and 1 Each of the Debtors in the above-captioned jointly administered chapter 11 cases and their respective tax identification numbers are set forth in the Order Directing Joint Administration of Chapter 11 Cases [Docket No. 30]. The location of 21st Century Oncology Holdings, s corporate headquarters and the Debtors service address is: 2270 Colonial Boulevard, Fort Myers, Florida Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Motion.

22 Pg 22 of 38 appropriate under the particular circumstances; and a hearing having been held to consider the relief requested in the Motion (the Hearing ); and upon consideration of the record of the Hearing and all proceedings had before the Court; and the Court having found and determined that the relief sought in the Motion is in the best interests of the Debtors estates, their creditors, and other parties in interest, and that the legal and factual bases set forth in the Motion and at the Hearing establish just cause for the relief granted herein; and upon all of the proceedings had before the Court; and any objections to the relief requested herein having been withdrawn or overruled on the merits; and after due deliberation and sufficient cause appearing therefor, it is HEREBY ORDERED THAT: 1. The Motion is granted to the extent set forth herein. 2. The Maximum Unsecured Claims Amount shall be $531,435,147.15, and the Debtors shall rely on the Maximum Unsecured Claims Amount for all purposes relating to making distributions of New Common Stock to holders of Allowed unsecured Claims under the Plan. 3. The Debtors are authorized to disburse, or cause to be disbursed (including by or through the stock transfer agent for the Reorganized Debtors), as soon as reasonably practicable, the Minimum Note Claims Distribution Percentage of 77.65% of the New Common Stock issued on the Effective Date to the holders of Allowed Note Claims in accordance with the Plan. 4. The Disputed Claims Reserve is approved in all respects. The Debtors shall reserve 22.35% of the New Common Stock issued on the Effective Date (the Aggregate Reserve Amount ) in the Disputed Claims Reserve, the full amount of which shall be available for distribution to each holder of each Equity GUC Claim, if and when any such Claim (or any 2

23 Pg 23 of 38 portion thereof) becomes Allowed (x) in an amount greater than $1,000,000 or (y) in any amount if the holder of such Claim made the New Common Stock Election, in accordance with the Plan. 5. The Equity GUC Claims identified on the attached Schedule 1 hereto constitute Disputed Claims under the Plan and shall remain so unless and until they (or any portion thereof) are Disallowed or Allowed pursuant to the terms of the Plan. 6. Further, after each Equity GUC Claim has been finally Allowed (in full or in part) or Disallowed and an initial distribution of New Common Stock has been made on account of each such Allowed Claim the holder of which is entitled to receive distributions of New Common Stock on account of such Allowed Claim pursuant to the Plan, each holder of any such Allowed Claim shall receive, in addition to any prior distributions of New Common Stock such holder has already received on account of its Allowed Claim, its pro rata share (based on the proportion that such holder s Allowed Claim bears to the aggregate amount of all Allowed Claims that are eligible to receive distributions of New Common Stock pursuant to the Plan) of any excess New Common Stock remaining in the Disputed Claims Reserve. 7. The Debtors are authorized to take any and all actions that are necessary or appropriate to establish and administer the Disputed Claims Reserve consistent with the terms of the Plan and to implement the terms of this Order. Nothing herein or in the Motion, nor any action by the Debtors to implement this Order, shall constitute an admission of the validity, nature, amount or priority of any Equity GUC Claim, and the Debtors reserve all of their rights to dispute the validity, nature, amount or priority of any Equity GUC Claim reserved for in the Disputed Claims Reserve. 8. The terms and conditions of this Order shall be immediately effective and enforceable upon its entry. 3

24 Pg 24 of The Court retains exclusive jurisdiction with respect to all matters arising from or related to the implementation of this Order. Dated:, 2018 White Plains, New York THE HONORABLE ROBERT D. DRAIN UNITED STATES BANKRUPTCY JUDGE 4

25 Pg 25 of 38 Schedule 1 Equity GUC Claims

26 Pg 26 of 38 Equity GUC Claims Claim No. 28 Gotardo Alencar Rodrigues, M.D. Claimant Debtor Liq./Unliq. 1 21st Century Oncology Holdings, Unliquidated Type Reserved Amount Liquidated $1,149, Andrew L. Woods 21st Century Oncology, Liquidated $11,084, Lanham, Lisa A 21st Century Oncology of Kentucky, LLC 211 Cruz, Nadja I 21st Century Oncology Holdings, 214 Gourdet Dorvil, Jacqueline J 21st Century Oncology Holdings, Unliquidated Employee Claim $1,000, Unliquidated Employee Claim $1,000, Unliquidated Litigation - Other Claim $1,000, Julie Baldeon South Florida Medicine, LLC Unliquidated Employee Claim $1,000, Yahia Musa 21st Century Oncology Holdings, 228 Brian Zeller 21st Century Oncology Holdings, 238 Estate of Kenneth Stewart, William Stewart, Administrator 241 Florida Oncology Partners, LLC 21st Century Oncology of Kentucky, LLC Unliquidated Litigation - Personal Injury/Med Malpractice Claim 2 $1,000, Unliquidated Employee Claim $1,000, Unliquidated Litigation - Personal Injury/Med Malpractice Claim $1,000, st Century Oncology, LLC Liquidated $2,446, For the avoidance of doubt, a Claim identified herein as Liquidated simply identifies that the holder of such Claim has not asserted a unliquidated amount with respect to such claim, but instead has asserted a sum certain Claim against the Debtors. 2 The Debtors have cross-referenced all filed litigation Claims against their books and records and reserved amounts for those Claims for which they have records. Pursuant to the Plan, the Debtors anticipate that all such Claims will be satisfied by the proceeds of the Debtors insurance policies, however the Debtors have reserved amounts out of an abundance of caution in the event that any litigation claimant is awarded a judgment in excess of insurance.

27 Pg 27 of 38 Claim No. 242 Florida Oncology Partners, LLC 243 Florida Oncology Partners, LLC Claimant Debtor Liq./Unliq. 1 21st Century Oncology Holdings, 343 Gary Wilson 21st Century Oncology Holdings, 366 Donna Fetner 21st Century Oncology Holdings, 455 Yolanda Mora 21st Century Oncology Holdings, 526 Frangochais, Janet A 21st Century Oncology Holdings, 3 Unliquidated Type Reserved Amount Liquidated $2,446, st Century Oncology, Liquidated $2,446, Unliquidated Litigation - Personal Injury/Med Malpractice Claim Unliquidated Litigation - Personal Injury/Med Malpractice Claim Unliquidated Litigation - Other Claim $1,000, $1,000, $1,000, Unliquidated Employee Claim $1,000, Yahia Musa 21st Century Oncology, Unliquidated Litigation - Personal Injury/Med Malpractice Claim 571 Yahia Musa 21st Century Oncology Investments, LLC 572 Yahia Musa 21st Century Oncology Management Services, Unliquidated Litigation - Personal Injury/Med Malpractice Claim Unliquidated Litigation - Personal Injury/Med Malpractice Claim 575 Yahia Musa 21st Century Oncology, LLC Unliquidated Litigation - Personal Injury/Med Malpractice Claim $1,000, $1,000, $1,000, $1,000,000.00

28 Pg 28 of 38 Claim No. 576 Yahia Musa 21st Century Oncology Services, LLC Claimant Debtor Liq./Unliq Govan, Waynise J 21st Century Oncology Holdings, 695 Alan Jarrett 21st Century Oncology Holdings, 4 Unliquidated Type Unliquidated Litigation - Personal Injury/Med Malpractice Claim Reserved Amount $1,000, Unliquidated Employee Claim $1,000, Liquidated $2, Netsai Masomere 21st Century Oncology, LLC Unliquidated Litigation - Personal Injury/Med Malpractice Claim 766 Dr. Kishore Dass 21st Century Oncology Holdings, 768 Seema Dass 2014 GRAT 21st Century Oncology Holdings, 769 Dr. Ben Han 21st Century Oncology Holdings, Dr. Gotardo A. Rodrigues, M.D. 771 Rajiv Patel 21st Century Oncology Holdings, 809 Fraley, Connie L 21st Century Oncology Holdings, 857 Angelo Gousse, M.D, 21st Century Oncology Holdings, $1,000, Liquidated $5,884, Liquidated $5,700, Liquidated $11,584, SFRO Holdings, LLC Liquidated $3,000, Liquidated $2,574, Unliquidated Employee Claim $1,000, Liquidated $1,087, Bionomics 21st Century Oncology, LLC Liquidated $14, Santoro, Brenda 21st Century Oncology, Unliquidated Litigation - Personal Injury/Med Malpractice Claim $1,000,000.00

29 Pg 29 of 38 Claim No. 932 Fernando Piquero & Wife, Maria Piquero Unliquidated Type 21st Century Oncology, Unliquidated Litigation - Personal Injury/Med Malpractice Claim Claimant Debtor Liq./Unliq Lilley, Robin S 21st Century Oncology Holdings, 1003 AIG Property Casualty, and its Affiliates Identified on the Addendum Hereto 1005 UnitedHealthcare Insurance Company 1006 AIG Property Casualty, and its Affiliates Identified on the Addendum Hereto 1007 AIG Property Casualty, and its Affiliates Identified on the Addendum Hereto 1013 AIG Property Casualty, and its Affiliates Identified on the Addendum Hereto 21st Century Oncology Holdings, 1020 Edit Tolnai Associates in Radiation Oncology Services, LLC 5 Reserved Amount $1,000, Unliquidated Employee Claim $1,000, Unliquidated Insurer Claim $1,000, st Century Oncology, LLC Liquidated $6,225, st Century Oncology, Unliquidated Insurer Claim $1,000, st Century Oncology, LLC Unliquidated Insurer Claim $1,000, OnCure Medical Corp. Unliquidated Insurer Claim $1,000, Liquidated $3,017, Edit Tolnai 21st Century Oncology, LLC Liquidated $3,017, Edit Tolnai SFRO Holdings, LLC Liquidated $3,017, AIG Property Casualty, and its Affiliates Identified on the Addendum Hereto 1154 Central Coast Medical Oncology Corp Central Coast Medical Oncology Corp. 21st Century Oncology Investments, LLC Unliquidated Insurer Claim $1,000, OnCure Medical Corp. Liquidated $4,129, U.S. Cancer Care, Liquidated $4,129,000.00

30 Pg 30 of 38 Claim No. Claimant Debtor Liq./Unliq. 1 Unliquidated Type Reserved Amount CNMC Company Inc 21st Century Oncology, LLC Liquidated $ CNMC Company Inc 21st Century Oncology of Alabama, LLC Liquidated $ CNMC Company Inc U.S. Cancer Care, Liquidated $2, The Frederico D Dumenigo Irrev Trust 2293 Jessie Lee Bizzell 21st Century Oncology Holdings, 21st Century Oncology, LLC Liquidated $1,116, Unliquidated Litigation - Other Claim $1,000, Shawn Kirby 21st Century Oncology, LLC Liquidated $1,952, Roseane Petit Jean 21st Century Oncology Holdings, 2331 Cancer Treatment Services International - Arizona, LLC 2333 Cancer Treatment Services International - Arizona, LLC Unliquidated Litigation - Personal Injury/Med Malpractice Claim $1,000, st Century Oncology, Liquidated $3,534, Arizona Radiation Therapy Management Services, Liquidated $3,534, JPMorgan Chase Bank, N.A. SFRO Holdings, LLC Liquidated $3,689, ACE American Insurance Company 21st Century Oncology Holdings, 2462 Adonela Torres 21st Century Oncology Holdings, Unliquidated Insurer Claim $1,000, Unliquidated Litigation - Personal Injury/Med Malpractice Claim 2502 David DiPietro 3 21st Century Oncology, Unliquidated Litigation - Other Claim $1,000, As discussed in the Debtors Motion to Dismiss Complaint to Determine Dischargeability of Debt Pursuant to 11 U.S.C. 1141(d)(6) [Adv. Proc (RDD); Docket No. 13], the Debtors assert that they do not owe any amounts Mr. Di Pietro and accordingly have not reserved any amounts for his Claims. 6

31 Pg 31 of 38 Claim No. Claimant Debtor Liq./Unliq David DiPietro 21st Century Oncology Holdings, Unliquidated Unliquidated Type Litigation - Other Claim 2504 David DiPietro 21st Century Oncology, LLC Unliquidated Litigation - Other Claim Reserved Amount Total $118,787,

32 Pg 32 of 38 Schedule 2 Individual Claims

33 Pg 33 of 38 Individual Claims Claim No. Claimant Debtor 200 Jeffrey Paradise 21st Century Oncology Holdings, 203 Kathleen Paradise 21st Century Oncology Holdings, 247 Leonard C Barefield 21st Century Oncology Holdings, 251 Jodi Alexander South Florida Radiation Oncology, LLC 253 Victor Nelson 21st Century Oncology Holdings, 254 Mayra Gonzalez 21st Century Oncology Holdings, 255 Willie Thompson 21st Century Oncology Holdings, 256 Chimene Nelson 21st Century Oncology Holdings, 258 Fermin Alvarez 21st Century Oncology Services, LLC Reserved Amount 260 Daniel Guzman 21st Century Oncology, LLC 270 Melin William 21st Century Oncology Holdings, 273 Jeffery Townsend 21st Century Oncology, LLC 275 Elizabeth T Whalen 21st Century Oncology, 276 James J Harder, Sr 21st Century Oncology Holdings, 277 Robert L. Shapiro 21st Century Oncology Holdings, 279 Jennifer Willis-Josef 21st Century Oncology Holdings, 280 Teresita Alfonso 21st Century Oncology Holdings, 281 Randall Harwood 21st Century Oncology Holdings, 282 Rushandrea l Williams 21st Century Oncology Holdings, 285 Hermate Souffrant 21st Century Oncology Holdings, 291 Timothy Hyatt 21st Century Oncology Holdings,