rdd Doc 337 Filed 08/17/17 Entered 08/17/17 18:25:04 Main Document Pg 1 of 40

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1 Pg 1 of 40 Hearing Date and Time: September 6, 2017 at 10:00 a.m. (prevailing Eastern Time) Objection Deadline: August 30, 2017 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 SEEKING ENTRY OF AN ORDER (I) AUTHORIZING AND APPROVING (A) THE DEBTORS ENTRY INTO THE REAL ESTATE PURCHASE AGREEMENT, (B) THE SALE OF THE DEBTORS CAPE CORAL REAL ESTATE FREE AND CLEAR OF ALL CLAIMS, LIENS, RIGHTS, INTERESTS AND ENCUMBRANCES, AND (II) GRANTING RELATED RELIEF PLEASE TAKE NOTICE that on August 17, 2017, 21st Century Oncology Holdings, Inc. and its affiliated debtors in the above-captioned chapter 11 cases, as debtors and debtors in possession (collectively, the Debtors ), filed the Debtors Motion Seeking Entry of an Order (I) Authorizing and Approving (A) the Debtors Entry into the Real Estate Purchase Agreement, (B) the Sale of the Debtors Cape Coral Real Estate Free and Clear of all Claims, Liens, Rights, Interests and Encumbrances, and (II) Granting Related Relief (the Motion ). A hearing (the Hearing ) on the Motion will be held before the Honorable Robert D. Drain of the United 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 Inc. s corporate headquarters and the Debtors service address is: 2270 Colonial Boulevard, Fort Myers, Florida

2 Pg 2 of 40 States Bankruptcy Court for the Southern District of New York (the Court ), 300 Quarropas Street, White Plains, New York 10601, on September 6, 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 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 Court and General Order M 399, to the extent applicable, and served so as to be actually received no later than August 30, 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. 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. 2

3 Pg 3 of 40 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: August 17, 2017 /s/ Christopher Marcus 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 40 Hearing Date and Time: September 6, 2017 at 10:00 a.m. (prevailing Eastern Time) Objection Deadline: August 30, 2017 at 4:00 p.m. (prevailing Eastern Time) Christopher Marcus, P.C. James H.M. Sprayregen, P.C. John T. Weber William A. Guerrieri (pro hac vice pending) KIRKLAND & ELLIS LLP Alexandra Schwarzman (pro hac vice pending) 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: (212) 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 SEEKING ENTRY OF AN ORDER (I) AUTHORIZING AND APPROVING (A) THE DEBTORS ENTRY INTO THE REAL ESTATE PURCHASE AGREEMENT, (B) THE SALE OF THE DEBTORS CAPE CORAL REAL ESTATE FREE AND CLEAR OF ALL CLAIMS, LIENS, RIGHTS, INTERESTS AND ENCUMBRANCES, AND (II) GRANTING RELATED RELIEF The above-captioned debtors and debtors in possession (collectively, the Debtors ) respectfully state as follows in support of this motion: Relief Requested 1. By this motion, the Debtors seek entry of an order, substantially in the form attached hereto as Exhibit A (the Order ): (a) authorizing and approving (i) the Debtors entry into that certain real estate purchase agreement, dated as of August 11, 2017 by and between Debtor 21st Century Oncology, Inc. ( 21C ) and RJM-FLM, LLC ( RJM ), substantially in the form attached hereto as Exhibit 1 to Exhibit A (the Purchase Agreement ), (ii) the sale free 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 Inc. s corporate headquarters and the Debtors service address is: 2270 Colonial Boulevard, Fort Myers, Florida

5 Pg 5 of 40 and clear of all liens, claims, interests and encumbrances of 21C s real property located at 1708 Cape Coral Parkway West, Suites 7 and 8, Cape Coral, FL being sold pursuant to the Purchase Agreement (collectively, and including all actions taken or required to be taken in connection with the implementation and consummation of the Purchase Agreement, the Sale and the real property transferred thereunder the Cape Coral Real Estate ); and (b) granting related relief. In support of this motion, the Debtors submit the Declaration of Paul B. Rundell in Support of Debtors Motion Seeking Entry of an Order (I) Authorizing and Approving (A) the Debtors Entry Into the Real Estate Purchase Agreement; (B) the Sale of the Debtors Cape Coral Real Estate Free And Clear of All Claims, Liens, Rights, Interests And Encumbrances; and (II) Granting Related Relief attached hereto as Exhibit B (the Rundell Declaration ). Jurisdiction, Venue, and Procedural Background 2. The United States Bankruptcy Court for the Southern District of New York 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. This matter is a core proceeding within the meaning of 28 U.S.C. 157(b)(2). 3. Venue is proper in this Court pursuant to 28 U.S.C and The statutory bases for the relief requested herein are sections 105(a) and 363 of title 11 of the United States Code (the Bankruptcy Code ), Bankruptcy Rules 2002, 6004, Rules , and of the Local Bankruptcy Rules for the Southern District of New York 2

6 Pg 6 of 40 (the Local Bankruptcy Rules ), and the Sale Guidelines for the Conduct of Asset Sales established and adopted by the United States Bankruptcy Court for the Southern District of New York pursuant to General Order M-383 (the Sale Guidelines ). 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]. The Sale Process 6. On or about October 1, 2004, 21C purchased the Cape Coral Real Estate with the intention of developing it into a radiation oncology center. Since the purchase, however, 21C has not developed the Cape Coral Real Estate and the units remain unused and vacant today. In its current state, the Cape Coral Real Estate is not benefitting the Debtors, and instead is a drain on the estates. 7. The Debtors spend approximately $27,000 per year in maintaining the premises. Specifically, the Debtors spend approximately $1,000 per month in insurance and utility costs; and approximately $1,300 per month for various maintenance costs for the premises. These costs provide no related benefit to the Debtors estates. 3

7 Pg 7 of In an effort to monetize the Cape Coral Real Estate, the Debtors engaged a local consultant, Commercial Real Estate Consultants, LLC ( CRE ), and a local broker, Florida Realtors (the Broker ) to market the sale of the properties. CRE and the Broker contacted several interested parties. Ultimately, two parties submitted bids and RJM s was the highest and best offer. The Debtors and RJM worked to finalize the Purchase Agreement, which contemplates the sale of the Cape Coral Real Estate for $340,000 (the Purchase Price ), which in the Debtors business judgment, is the best offer available to the Debtors for the Cape Coral Real Estate. Overview of the Purchase Agreement I. Material Terms of the Purchase Agreement. 9. The following chart summarizes the key terms and conditions of the Purchase Agreement pursuant to LBR and the corresponding Sale Guidelines: 2 Parties Provision Purchase Price $340, Legal Description of Real Estate Seller: 21st Century Oncology, Inc. Purchaser: RJM-FLM, LLC See Purchase Agreement, at 1. See Purchase Agreement, at 2. Summary Description Units 7 and 8, Cay West Professional Condominium, Declaration of Condominium Recorded in O.R. Book 4452, Page 4506, Lee County, Florida See Purchase Agreement, at 1. Deposit held in Escrow $34, See Purchase Agreement, at 2(a)-(b). Closing Date On or before October 30, 2017 See Purchase Agreement, at 4(a). 2 This summary is provided for the convenience of the Court and parties in interest. To the extent there is any conflict between this summary and the Purchase Agreement, the latter governs in all respects. Capitalized terms used but not otherwise defined in this summary shall have the meanings set forth in the Purchase Agreement. 4

8 Pg 8 of 40 Title Property Condition Material Closing Conditions 21C has legal capacity to and will convey marketable title by a Special Warranty Deed, free of liens, easements and encumbrances of record known to 21C. 21C shall deliver evidence of title and surveys, plans, specifications of the property to RJM, and there shall be a title examination by RJM. See Purchase Agreement, at 6(a)-(d). 21C shall deliver properties as is. See Purchase Agreement, at 7. RJM will have a due diligence period and will conduct due diligence, at its expense, to determine whether the property is suitable for its intended use and development and RJM may conduct a final walk-through prior to closing. See Purchase Agreement, at 7(b)-(c). RJM s Obligation: RJM s obligation to close is contingent upon approval of RJM s purchase by the condominium association. See Purchase Agreement, at 22(b). 21C s Obligations: 21C shall provide RJM with the Declaration of Condominium for the Cay West Professional Condominium, together with the articles of incorporation, bylaws, rules and regulations of the condominium association and the most recent condominium budget and year-end financial statements. See Purchase Agreement, at 22(a). 21C shall be responsible for obtaining bankruptcy court approval of the sale sufficient for the title insurance underwriter, and the sale is contingent on obtaining bankruptcy court approval. See Purchase Agreement, at 22(c). Basis for Relief I. The Sale Should be Approved as an Exercise of Sound Business Judgment. 10. Section 363(b) of the Bankruptcy Code permits a debtor, subject to court approval, to enter into new transactions outside the ordinary course of its business so long as there is a sound business purpose that justifies such action. See Committee of Equity Sec. Holders v. Lionel Corp. (In re Lionel Corp.), 722 F.2d 1063, 1070 (2d Cir. 1983). In the Second Circuit, a debtor s decision to sell assets outside the ordinary course of business must be based upon sound business judgment. See, e.g., In re MF Glob. Inc., 535 B.R. 596, 605 (Bankr. S.D.N.Y. 2015); In re Integrated Res., Inc., 147 B.R. 650, 656 (S.D.N.Y. 1992) (holding that the 5

9 Pg 9 of 40 law vests the debtor s decision to use property out of the ordinary course of business with a strong presumption that in making a business decision, the directors acted on an informed basis, in good faith, and in the honest belief that the action taken was in the best interests of the company). 11. When determining whether to approve a proposed sale under section 363 of the Bankruptcy Code, courts apply a business judgment test. See, e.g., MF Glob., 535 B.R. at 605; In re Global Crossing Ltd., 295 B.R. 726, 744 (Bankr. S.D.N.Y. 2003). For instance, in In re Lionel Corp., the Court of Appeals for the Second Circuit analyzed several (non-exclusive) factors in conducting a section 363(b) analysis, including whether: (a) a sound business purpose existed that justified the sale; (b) adequate and reasonable notice was provided to interested parties; (c) the sale value obtained was fair and reasonable; and (d) the debtor acted in good faith. See In re Lionel Corp., 722 F.2d 1063, (2d Cir. 1983). 12. Additionally, section 105(a) of the Bankruptcy Code, which codifies the inherent equitable powers of the bankruptcy court, empowers the bankruptcy court to issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title. 11 U.S.C. 105(a). Specifically, courts have used their power under section 105(a) of the Bankruptcy Code to, among others things, authorize a debtor s sale of its assets outside the ordinary course. See, e.g., In re Champion Motor Grp., Inc., No AST, 2010 WL , at *2 (Bankr. E.D.N.Y. Mar. 17, 2010). The use of section 105(a) of the Bankruptcy Code, also referred to as the doctrine of necessity rule, has long been recognized as precedent within the Second Circuit. See In re Ionosphere Clubs, Inc., 98 B.R. 174, (Bankr. S.D.N.Y. 1989). The rationale for its utility the rehabilitation of a debtor in reorganization cases is considered the the paramount policy and goal of Chapter 11. Id. Here, the Debtors 6

10 Pg 10 of 40 entry into the Purchase Agreement and sale of the Cape Coral Real Estate represents a sound exercise of the Debtors business judgment and will maximize the value of the estates. A. A Sound Business Purpose Exists for the Sale. 13. The Debtors have a sound business justification for entering into this transaction. The Purchase Price for the Cape Coral Real Estate is fair and reasonable, and the proceeds will be reinvested in the business. Further, divesting the vacant and unused Cape Coral Real Estate will reduce the Debtors operating expenses by approximately $27,000 per year. 14. The sale of the Cape Coral Real Estate will inure to the benefit of all parties-ininterest by providing capital to reinvest in the business and reduce expenses, which will allow the Debtors to conserve value for distribution to creditors. In light of the foregoing, the Debtors believe the Sale represents a sound exercise of their business judgment. B. Adequate and Reasonable Notice of the Sale Will Be Provided. 15. The Debtors marketing process and the notice provided through this motion constitute adequate and reasonable notice of the Sale. All interested parties and potential purchasers received notice of the Sale through the marketing process conducted by CRE and the Broker. Further, this motion provides for service in a manner that (a) provides at least 21 days notice to all interested parties, including the U.S. Trustee and the Committee; (b) informs all interested parties of the deadlines for objecting to the Sale; and (c) otherwise includes all information relevant to parties interested in or affected by the Sale in accordance with the Sale Guidelines. C. The Sale and Purchase Price Reflect a Fair Value Transaction. 16. The Purchase Price represents a fair and reasonable value for the Cape Coral Real Estate despite the lack of a court-sanctioned auction process. A court-approved auction process is not required under the Bankruptcy Code, Bankruptcy Rules, or Local Bankruptcy Rules. See, 7

11 Pg 11 of 40 e.g., In re The Great Atl. & Pac. Tea Co., Inc., 544 B.R. 43, (Bankr. S.D.N.Y. 2016) ( [T]here is no rule that... asset sales are... conditioned on such a requirement [a formal auction], which does not appear in the Bankruptcy Code or Bankruptcy Rules. The Bankruptcy Court for the Southern District of New York s Guidelines for the Conduct of Asset Sales... stat[e] that... the Court does not express a preference for public sales over private sales as a means to maximize the sale price. ) (internal citations and quotations omitted). Moreover, the requirement of Court review coupled with [the] debtors duty to maximize the value of their estates, any motion for approval of... the sale of an asset, has inherent within it the possibility for an auction. Id. 17. As discussed, the Sale constitutes the highest or otherwise best offer for the Cape Coral Real Estate. Following a 10-month marketing process, the Debtors received two bids, including RJM s, which was higher than the competing bid and is reflected in the Purchase Agreement. 18. Further, the Purchase Agreement does not foreclose the Debtors from considering and ultimately consummating an alternative superior transaction to the extent such alternative materializes. Interested parties have had and continue to have ample opportunity to submit higher or otherwise better offers for the properties. To date, the Debtors have received none. Accordingly, the Debtors submit that the Sale is the highest and otherwise best alternative and the Purchase Price represents the fair market value of the Cape Coral Real Estate. II. The Sale Has Been Proposed in Good Faith Without Collusion and RJM Is a Good Faith Purchaser. 19. While the Bankruptcy Code does not define good faith, the Second Circuit has held that good faith of a purchaser is shown by the integrity of its conduct during the course of the sale proceedings, with a lack of integrity resulting in a lack of good faith. See, e.g., In re 8

12 Pg 12 of 40 Gucci, 126 F.3d 380, 390 (2d Cir. 1997) (a purchaser s good faith is lost by fraud, collusion between the purchaser and other bidders or the trustee, or an attempt to take grossly unfair advantage of other bidders ) (internal citations omitted). 20. Section 363(m) of the Bankruptcy Code provides that: [t]he reversal or modification on appeal of an authorization... of a sale... does not affect the validity of a sale... to an entity that purchased... such property in good faith. 11 U.S.C. 363(m). Conversely, a lack of good faith may lead to a sale being avoided under section 363(n) of the Bankruptcy Code. See 11 U.S.C. 363(n) ( The trustee may avoid a sale under this section if the sale price was controlled by an agreement among potential bidders at such sale, or may recover from a party to such agreement any amount by which the value of the property sold exceeds the price at which such sale was consummated ). 21. RJM is a good faith purchaser and has negotiated the Purchase Agreement with the Debtors in good faith. The parties entered into the Purchase Agreement in good faith after extensive, arm s-length negotiations, during which both parties were represented by competent counsel of similar bargaining positions. Additionally, there is no indication of any fraud, [or] collusion between the purchaser and other bidders or the trustee, or an attempt to take grossly unfair advantage of other bidders or similar conduct that would cause or permit the Sale or Purchase Agreement to be avoided under section 363(n) of the Bankruptcy Code. Accordingly, RJM should be entitled to the full protections of section 363(m) of the Bankruptcy Code. III. The Sale of the Cape Coral Real Estate Should be Approved Free and Clear Under Section 363(f) of the Bankruptcy Code. 22. Section 363(f) of the Bankruptcy Code permits a debtor to sell property free and clear of another party s interest in the property if: (a) applicable nonbankruptcy law permits such a free and clear sale; (b) the holder of the interest consents; (c) the interest is a lien and the 9

13 Pg 13 of 40 sale price of the property exceeds the value of all liens on the property; (d) the interest is in bona fide dispute; or (e) the holder of the interest could be compelled in a legal or equitable proceeding to accept a monetary satisfaction of its interest. See 11 U.S.C. 363(f). 23. A court may authorize the sale of assets free and clear of existing liens and encumbrances pursuant to section 363(f)(3) of the Bankruptcy Code even if the purchase price is less than the face amount of a lien provided the purchase price for the real estate is the best available under the circumstances. See, e.g., In re Boston Generating, LLC, 440 B.R. 302, (Bankr. S.D.N.Y. 2010) (rejecting argument that Debtors must prove that secured lenders are compelled to accept a money satisfaction of their liens and holding that Section 363(f)(5) does not require that the sale price for the property exceed the value of the interests.... [B]ecause [a lender] could be compelled... to accept general unsecured claims to the extent the sale proceeds are not sufficient to pay their claims in full, section 363(f)(5) is satisfied. ). 24. As discussed, the Purchase Agreement represents the highest or otherwise best offer for the Cape Coral Real Estate and the Purchase Price represents the best price available. Further, the Order provides that any lien, claim, or encumbrance in the Debtors Cape Coral Real Estate will attach to the net proceeds of the Sale, subject to any claims and defenses the Debtors may possess. Accordingly, the Sale of the Debtors Cape Coral Real Estate pursuant to the Purchase Agreement satisfies the statutory prerequisites of section 363(f) of the Bankruptcy Code and the Sale should be approved free and clear of all liens, claims, and encumbrances. Motion Practice 25. 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 Local Bankruptcy Rule (a). 10

14 Pg 14 of 40 Waiver of Bankruptcy Rule 6004(h) 26. Pursuant to Bankruptcy Rule 6004(h), [a]n order authorizing the use, sale, or lease of property other than cash collateral is stayed until the expiration of 14 days after entry of the order, unless the court orders otherwise. As set forth throughout this motion, failure to grant the relief requested herein would be detrimental to the Debtors, their estates and all stakeholders. For this reason and those set forth above, the Debtors submit that ample cause exists to justify a waiver of the 14-day stay imposed by Bankruptcy Rule 6004(h). Reservation of Rights 27. Nothing contained herein is intended or should be construed as an admission as to the validity of any claim against the Debtors, a waiver of the Debtors rights to dispute any claim, or an approval or assumption of any agreement, contract, or lease under section 365 of the Bankruptcy Code. The Debtors expressly reserve their right to contest any claim related to the relief sought herein. Likewise, if the Court grants the relief sought herein, any payment made pursuant to an order of the Court is not intended to be nor should it be construed as an admission as to the validity of any claim or a waiver of the Debtors rights to subsequently dispute such claim. Notice 28. 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 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 11

15 Pg 15 of 40 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) RJM; (n) any parties known or reasonably believed to have expressed interest in the Cape Coral Real Estate; (o) all entities known or reasonably believed to have asserted a lien, encumbrance, claim or other interest in any of the Cape Coral Real Estate; and (p) 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 29. 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] 12

16 Pg 16 of 40 WHEREFORE, the Debtors respectfully request entry of the order, substantially in the form attached hereto as Exhibit A, (a) granting the relief requested herein and (b) granting such other relief as is just and proper. Dated: August 17, 2017 New York, New York /s/ Christopher Marcus 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 (pro hac vice pending) Alexandra Schwarzman (pro hac vice pending) 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 13

17 Pg 17 of 40 Exhibit A Proposed Order

18 Pg 18 of 40 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 (I) AUTHORIZING AND APPROVING (A) THE DEBTORS ENTRY INTO THE REAL ESTATE PURCHASE AGREEMENT, (B) THE SALE OF THE DEBTORS CAPE CORAL REAL ESTATE FREE AND CLEAR OF ALL CLAIMS, LIENS, RIGHTS, INTERESTS AND ENCUMBRANCES, AND (II) GRANTING RELATED RELIEF Upon the motion (the Motion ) of the above-captioned debtors and debtors in possession (collectively, the Debtors ) for entry of an order (this Order ) 2 : (a) authorizing and approving (i) the Debtors entry into that certain real estate purchase agreement, dated as of August 11, 2017 by and between Debtor 21st Century Oncology, Inc., ( 21C ) and RJM-FLM, LLC ( RJM ), attached hereto as Exhibit 1 to Exhibit A (the Purchase Agreement ), (ii) the sale free and clear of all liens, claims, interests and encumbrances of 21C s real property located at 1708 Cape Coral Parkway West, Suites 7 and 8, Cape Coral, FL being sold under the Purchase Agreement (collectively, and including all actions taken or required to be taken in connection with the implementation and consummation of the Purchase Agreement, the Sale and the real property transferred thereunder the Cape Coral Real Estate ); and (b) granting related relief; and this Court having jurisdiction over this matter pursuant to 28 U.S.C 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 Inc. s corporate headquarters and the Debtors service address is: 2270 Colonial Boulevard, Fort Myers, Florida Capitalized terms used in this Order and not immediately defined have the meanings given to such terms in the Motion or the Purchase Agreement, as applicable.

19 Pg 19 of 40 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 this Court having found that this is a core proceeding pursuant to 28 U.S.C. 157(b)(2); and this Court having found that venue of this proceeding and the Motion in this district is proper pursuant to 28 U.S.C and 1409; and this Court having considered the Rundell Declaration; and this Court having found that the relief requested in the Motion is in the best interests of the Debtors estates, their creditors, and other parties-in-interest; and this Court having found that the Debtors notice of the Motion and opportunity for a hearing on the Motion were appropriate under the circumstances and no other notice need be provided; and this Court having reviewed the Motion and having heard the statements in support of the relief requested therein at a hearing before this Court (the Hearing ); and this Court having determined 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 this Court; and after due deliberation and sufficient cause appearing therefor, it is HEREBY ORDERED THAT: 1. The Motion is granted as set forth herein. 2. The Purchase Agreement, all of the terms and conditions thereof, and all of the transactions contemplated therein, are approved in all respects. The failure specifically to include any particular provision of the Purchase Agreement in this Order shall not diminish or impair the effectiveness of such provision, it being the intent of the Court that the Purchase Agreement be authorized and approved in its entirety. 3. Entry into the Purchase Agreement, and the consummation of the Sale contemplated thereby, is in the best interests of the Debtors, their respective creditors, estates, and other parties in interest. The Debtors have demonstrated good, sufficient, and sound 2

20 Pg 20 of 40 business reasons and justifications for entering into the Sale and the performance of their obligations under the Purchase Agreement. 4. The Debtors are authorized to: (a) take any and all actions necessary or appropriate to perform, consummate, implement and close the Sale in accordance with the terms and conditions set forth in the Purchase Agreement and this Order; and (b) to take all further actions and to execute and deliver the Purchase Agreement and any and all additional instruments and documents that may be necessary, appropriate, or desirable to the performance of the obligations contemplated by the Purchase Agreement and to consummate the Sale in accordance with the terms thereof, all without further order of the Court. 5. All persons and entities are prohibited and enjoined from taking any action to adversely affect or interfere with, or which would be inconsistent with, the ability of the Debtors to transfer the Cape Coral Real Estate to RJM in accordance with the Purchase Agreement and this Order; provided, however, that the Debtors shall not be responsible for any defense or other costs associated with the enforcement of the foregoing. 6. Nothing contained in any chapter 11 plan confirmed in these chapter 11 cases or the order confirming any such chapter 11 plan shall conflict with or derogate from the provisions of the Purchase Agreement or this Order, and to the extent of any conflict or derogation between this Order or the Purchase Agreement and such future plan or order, the terms of this Order and the Purchase Agreement shall control. Sale and Transfer Free and Clear of Liens, Claims, Interests, and Encumbrances 7. At closing, all of the Debtors right, title and interest in and to, and possession of, the Cape Coral Real Estate shall be immediately vested in RJM pursuant to sections 105(a), 363(b), and 363(f) of the Bankruptcy Code. Such transfer shall constitute a legal, valid, binding, 3

21 Pg 21 of 40 and effective transfer of such Cape Coral Real Estate. All persons or entities, presently or on or after the closing, in possession of some or all of the Debtors Cape Coral Real Estate, are directed to surrender possession of the Cape Coral Real Estate to RJM or its respective designees on the closing or at such time thereafter as RJM may request. 8. This Order: (a) shall be effective as a determination that, as of the closing, (i) the Cape Coral Real Estate shall have been transferred to RJM free and clear of all liens, claims, interests, and encumbrances pursuant to section 363(f) of the Bankruptcy Code, and (ii) the conveyances described herein have been effected; and (b) is and shall be binding upon and govern the acts of all entities, including, without limitation, all filing agents, filing officers, title agents, title companies, recorders of mortgages, recorders of deeds, registrars of deeds, registrars of patents, trademarks, or other intellectual property, administrative agencies, governmental departments, secretaries of state, federal and local officials, and all other persons and entities who may be required by operation of law, the duties of their office, or contract, to accept, file, register, or otherwise record or release any documents or instruments, or who may be required to report or insure any title or state of title in or to any lease; and each of the foregoing persons and entities is hereby directed to accept for filing any and all of the documents and instruments necessary and appropriate to consummate the transactions contemplated by the Purchase Agreement. For the avoidance of doubt, all liens, claims, interests, and encumbrances on the Cape Coral Real Estate attach to the proceeds of the Sale ultimately attributable to the property against which such liens, claims, interests, and encumbrances applied or other specifically dedicated funds, in the same order of priority and with the same validity, force, and effect that such liens, claims, interests, and encumbrances applied prior to the Sale, subject to any rights, 4

22 Pg 22 of 40 claims, and defenses of the Debtors or their estates, as applicable, or as otherwise provided herein. 9. If any person or entity that has filed financing statements, mortgages, mechanic s claims, lis pendens, or other documents or agreements evidencing claims against or in the Debtors or the Cape Coral Real Estate shall not have delivered to the Debtors prior to the closing of the Sale, in proper form for filing and executed by the appropriate parties, termination statements, instruments of satisfaction, releases of all claims that the person or entity has with respect to the Debtors or the Cape Coral Real Estate or otherwise, then: (a) the Debtors are hereby authorized and directed to execute and file such statements, instruments, releases, and other documents on behalf of the person or entity with respect to the Cape Coral Real Estate; and (b) RJM is hereby authorized to file, register, or otherwise record a certified copy of this Order, which, once filed, registered, or otherwise recorded, shall constitute conclusive evidence of the release of all liens, claims, interests, and encumbrances against RJM and the Cape Coral Real Estate. Notwithstanding the foregoing, the provisions of this Order authorizing the Sale and assignment of the Debtors Cape Coral Real Estate free and clear of claims and liens shall be self-executing, and neither the Debtors nor RJM shall be required to execute or file releases, termination statements, assignments, consents, or other instruments to effectuate, consummate, and implement the provisions of this Order. No Successor or Transferee Liability 10. RJM, any of its affiliates, present or contemplated members, officers, directors, shareholders, or any of their respective successors and assigns shall not be deemed, as a result of any action taken in connection with the Purchase Agreement, the consummation of the Sale contemplated by the Purchase Agreement, or the transfer, operation, or use of the Cape Coral 5

23 Pg 23 of 40 Real Estate to: (a) be a legal successor, or otherwise be deemed a successor to the Debtors; (b) have, de facto or otherwise, merged with or into the Debtors; or (c) be an alter ego or a mere continuation or substantial continuation of the Debtors or the enterprise of the Debtors including, without limitation, within the meaning of any foreign, federal, state, or local revenue law, pension law, ERISA, tax law, labor law, products liability law, employment law, environmental law, or other law, rule, or regulation (including without limitation filing requirements under any such laws, rules, or regulations), or under any products liability law or doctrine with respect to the Debtors liability under such law, rule or regulation, or doctrine. 11. RJM shall not have any responsibility for: (a) any liability or other obligation of the Debtors or related to the Cape Coral Real Estate other than as expressly set forth in the Purchase Agreement or (b) any claims against the Debtors or any of their predecessors or affiliates. Except as expressly provided in the Purchase Agreement, RJM shall have no liability whatsoever with respect to the Debtors (their predecessors or affiliates ) respective businesses or operations or any of the Debtors (or their predecessors or affiliates ) obligations based, in whole or part, directly or indirectly, on any theory of successor or vicarious liability of any kind or character, or based upon any theory of environmental, successor or transferee liability, whether known or unknown as of the closing, now existing or hereafter arising, asserted or unasserted, fixed or contingent, liquidated or unliquidated, including liabilities on account of any taxes arising, accruing, or payable under, out of, in connection with, or in any way relating to the operation of the Cape Coral Real Estate prior to the closing. Good Faith of Purchaser 12. The Sale contemplated by the Purchase Agreement is undertaken by RJM without collusion and in good faith, as that term is defined in section 363(m) of the Bankruptcy Code, 6

24 Pg 24 of 40 and accordingly, the reversal or modification on appeal of the authorization provided herein to consummate the Sale shall not affect the validity of the Sale, unless such authorization and consummation of such Sale are duly and properly stayed pending such appeal. 13. Neither the Debtors nor RJM have engaged in any action or inaction that would cause or permit the Sale to be avoided or costs or damages to be imposed under section 363(n) of the Bankruptcy Code. The consideration provided by RJM for the Cape Coral Real Estate under the Purchase Agreement is fair and reasonable and the Sale may not be avoided under section 363(n) of the Bankruptcy Code. Other Provisions 14. Each and every federal, state, and local governmental agency, department, or official is hereby directed to accept any and all documents and instruments necessary and appropriate to consummate the transactions contemplated by the Purchase Agreement. 15. Upon the closing of the Sale, this Order shall be construed as and shall constitute for any and all purposes a full and complete general assignment, conveyance, and transfer of the Cape Coral Real Estate or a bill of sale transferring good and marketable title in the Cape Coral Real Estate to RJM pursuant to the terms of the Purchase Agreement. 16. The Purchase Agreement may be modified, amended, or supplemented by the parties thereto in accordance with the terms thereof, without further order of the Court, provided that any such modification, amendment, or supplement does not, based on the Debtors judgment, have a material adverse effect on the Debtors estates or their creditors, and, with respect to the Debtors, such amendment, supplement, or modification shall be in consultation with the Requisite Parties as such term is defined in that certain Restructuring Support Agreement, dated as of May 25, 2017 (together with all exhibits, schedules and attachments 7

25 Pg 25 of 40 thereto, as amended, supplemented, amended and restated or otherwise modified from time to time). The Debtors shall provide the Requisite Parties with notice of any modification, amendment, or supplement of the Purchase Agreement or any material and related agreement, document, or other instrument at least two business days in advance of such modification, amendment, or supplement. 17. Notwithstanding anything to the contrary contained herein, any proceeds obtained by the Debtors pursuant to the Sale or any authorization contained hereunder shall be subject to any applicable requirements imposed on the Debtors under the Final Order: (I) Pursuant to 11 U.S.C. 105, 361, 362, 363 and 364 Authorizing the Debtors to (A) Obtain Senior Secured Priming Superpriority Postpetition Financing, (B) Grant Liens and Superpriority Administrative Expense Status, (C) Use Cash Collateral of Prepetition Secured Parties and (D) Grant Adequate Protection to Prepetition Secured Parties; and (II) Granting Related Relief [Docket No. 134] (the Final DIP Order ) and the other DIP Documents (as defined in the Final DIP Order). 18. The Court shall retain exclusive jurisdiction to, among other things, interpret, implement, and enforce the terms and provisions of this Order and the Purchase Agreement, all amendments thereto and any waivers and consents thereunder and each of the agreements executed in connection therewith to which the Debtors are a party or which has been assigned by the Debtors to RJM, and to adjudicate, if necessary, any and all disputes concerning or relating in any way to the Sale. This Court retains jurisdiction to compel delivery of the Cape Coral Real Estate and to enter orders, as appropriate, pursuant to sections 105 or 363 (or other applicable provisions) of the Bankruptcy Code necessary to transfer the Cape Coral Real Estate to RJM. 19. Notwithstanding the possible applicability of Rules 6004(h), 6006(d), 7062, and 9014 of the Bankruptcy Rules or otherwise, the terms and conditions of this Order shall be 8

26 Pg 26 of 40 effective immediately upon entry and the Debtors and RJM are authorized to close the Sale immediately upon entry of this Order. 20. This Order and the Purchase Agreement shall be binding in all respects upon all creditors of (whether known or unknown), and holders of equity interests in, the Debtors, any holders of claims or liens in, against, or on all or any portion of the Cape Coral Real Estate, all successors and assigns of RJM, the Debtors and their affiliates and subsidiaries, and any subsequent trustees appointed in these chapter 11 cases or upon a conversion to chapter 7 under the Bankruptcy Code, and shall not be subject to rejection. 21. All time periods set forth in this Order shall be calculated in accordance with Bankruptcy Rule 9006(a). 22. Notwithstanding the relief granted herein and any actions taken hereunder, nothing contained in the Motion or this Order or any payment made pursuant to this Order shall constitute, nor is it intended to constitute, an admission as to the validity or priority of any claim or lien against the Debtors, a waiver of the Debtors rights to subsequently dispute such claim or lien, or the assumption or adoption of any agreement, contract, or lease under section 365 of the Bankruptcy Code. 23. The Debtors have complied with all obligations to provide notice of the Motion, the Purchase Agreement, and the Sale. A reasonable opportunity to object or to be heard regarding the relief requested in the Motion was afforded to all interested persons and entities. New York, New York Dated:, 2017 HONORABLE ROBERT D. DRAIN UNITED STATES BANKRUPTCY JUDGE 9

27 Pg 27 of 40 Exhibit 1 Purchase Agreement

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36 Pg 36 of 40 Exhibit B Rundell Declaration

37 Pg 37 of 40 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) ) DECLARATION OF PAUL B. RUNDELL IN SUPPORT OF DEBTORS MOTION SEEKING ENTRY OF AN ORDER (I) AUTHORIZING AND APPROVING (A) THE DEBTORS ENTRY INTO THE REAL ESTATE PURCHASE AGREEMENT; (B) THE SALE OF THE DEBTORS CAPE CORAL REAL ESTATE FREE AND CLEAR OF ALL CLAIMS, LIENS, RIGHTS, INTERESTS AND ENCUMBRANCES; AND (II) GRANTING RELATED RELIEF I, Paul B. Rundell, hereby declare under penalty of perjury: 1. I am the Interim Chief Executive Officer of 21st Century Oncology Holdings, Inc., one of the Debtors in the above-captioned chapter 11 cases. I have served the Debtors in my current capacity since February 27, In such capacity, I am generally familiar with the Debtors day-to-day operations, business and financial affairs, and books and records. I am above 18 years of age, and I am competent to testify. 2. I submit this declaration in support of the Debtors Motion Seeking Entry of an Order (I) Authorizing and Approving (A) the Debtors Entry Into the Real Estate Purchase Agreement; (B) the Sale of the Debtors Cape Coral Real Estate Free And Clear of All Claims, Liens, Rights, Interests And Encumbrances; and (II) Granting Related Relief. 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 Inc. s corporate headquarters and the Debtors service address is: 2270 Colonial Boulevard, Fort Myers, Florida

38 Pg 38 of Except as otherwise indicated herein, all facts set forth in this declaration are based on my personal knowledge, my discussions with other members of the Debtors management team and the Debtors advisors, and my review of the relevant documents and information concerning the Debtors operations, financial affairs, and refinancing and restructuring initiatives. If called upon to testify, I could and would testify competently to the facts set forth herein. 4. Except as otherwise indicated herein, all facts set forth in this declaration are based on my personal knowledge, my discussions with other members of the Debtors management team and the Debtors advisors, and my review of the relevant documents and information concerning the Debtors operations, financial affairs, and refinancing and restructuring initiatives. If called upon to testify, I could and would testify competently to the facts set forth herein. The Sale Process 5. On or about October 1, 2004, 21C purchased the Cape Coral Real Estate with the intention of developing it into a radiation oncology center. Since the purchase, however, 21C has not developed the Cape Coral Real Estate and the units remain unused and vacant today. In its current state, the Cape Coral Real Estate is not benefitting the Debtors, and instead is a drain on the estates. 6. The Debtors spend approximately $27,000 per year in maintaining the premises. Specifically, the Debtors spend approximately $1,000 per month in insurance and utility costs; and approximately $1,300 per month for various maintenance costs for the premises. These costs provide no related benefit to the Debtors estates. 2