Omnicare - Chapter 11 Plan Terms

Plan / RSA Terms

Overview

• The court confirmed the second amended joint Chapter 11 plan of reorganization and liquidation of Omnicare, LLC and 109 debtor affiliates on Sept. 17, 2026, capping a case that began Sept. 22, 2025 in the Northern District of Texas and that was driven by a $948,778,444.10 False Claims Act judgment entered against Omnicare on Aug. 18, 2025 — $406,778,444.10 in trebled damages and $542,000,000 in statutory penalties, of which the Southern District of New York held CVS Health jointly and severally liable for $164,800,000.
• The plan is a hybrid instrument. GenieRx Holdings LLC, the buyer under the March 31, 2026 asset purchase agreement, acquires substantially all operating assets for $250 million in cash plus assumed liabilities; certain debtors are reorganized and acquired directly or indirectly by the buyer as going concerns, while the remaining debtors sell their purchased assets and dissolve under a plan administrator's supervision. The reorganizing and liquidating debtors are identified on Exhibits A, B and C, and claim and interest treatment is identical across all debtors, with the plan constituting a separate plan for each.
• Value is delivered by two settlements the court approved on Aug. 12, 2026 under the compromise order: the DOJ agreement among the debtors, CVS Health and the Justice Department, under which the government defers all distributions on its claim until general unsecured creditors are paid in full, and the CVS agreement among the debtors, CVS Health and the committee, under which the CVS entities subordinate their prepetition claims behind every other allowed claim. The CVS entities are CVS Health and its direct and indirect subsidiaries other than the debtors and the Heartland entities, among them CVS Pharmacy, Aetna, CVS Rx Services and CVS Shared Services Resources. The plan implements both settlements, and the court found the compromises fair, equitable and reasonable, above the lowest point in the range of reasonableness, negotiated at arm's length with the committee's participation, and compliant with the absolute priority rule.
• The debtors, the DOJ, CVS Health, the committee, the DIP lender and the buyer each support the plan. The committee was appointed Oct. 16, 2025; the court determined a patient care ombudsman was unnecessary by an order the confirmation order dates Oct. 24, 2026, a date later than the confirmation order itself, and that order sits at Docket No. 215, between the October 2025 committee appointment and the Nov. 3, 2025 final DIP order.

Key Dates

• Confirmation hearing: Sept. 17, 2026, at 9:30 a.m. (prevailing Central Time).
• Confirmation order: signed Sept. 17, 2026; entered on the docket Sept. 18, 2026, the confirmation date that fixes the distribution record date and the cutoff for claims the United States and the State of Texas reserve as arising on or after that date.
• Voting and plan objection deadline: Sept. 11, 2026, at 4:00 p.m. (prevailing Central Time).
• Rejection bar date: 30 days after the effective date of rejection; for rejections effected by the plan and confirmation order, the confirmation order fixes Monday, Oct. 19, 2026.
• Administrative claims bar date and professional fee bar date: 60 days after the effective date.
• Claim objection deadline: 180 days after the effective date, subject to extension for cause.
• Notice of effective date: served within seven business days after the effective date.
• Disclosure statement order and compromise order: both entered Aug. 12, 2026.
• Plan supplement filed: Sept. 3, 2026.

Sale and Reorganization Structure

• The court entered the sale order on May 13, 2026, authorizing the sale of the purchased assets to GenieRx for $250 million in cash plus assumption of the assumed liabilities, subject to the APA's limits, following the bidding procedures the court approved Dec. 3, 2025. That order is a final order and survives confirmation unmodified except as the plan or confirmation order expressly provides.
• The sale order permits the debtors and the buyer, by mutual agreement, to restructure the APA as a sale or transfer of equity interests in Omnicare subsidiaries — including through a plan — so long as the change has no material adverse effect on the estates. The parties elected that route: certain debtors will be reorganized and acquired by the buyer under the plan, with the agreement to be memorialized in an amended and restated APA to be filed as a plan supplement or separately approved.
• On the effective date the purchased assets transfer to the buyer, which assumes operation of them under the plan.
• Licenses and permits held by each reorganizing debtor re-vest in the corresponding reorganized debtor and remain in effect to the maximum extent applicable law permits — state pharmacy, compounding, controlled substance, automated dispensing, wholesale drug distributor and manufacturer licenses, DEA registrations, FDA repackager registration, accreditations, NPI numbers, NCPDP provider IDs, Medicare Part B DMEPOS and mass immunizer provider agreements with continued use of all supplier numbers, and state Medicaid provider agreements with continued use of all provider numbers. Licenses and permits of liquidating debtors relating to purchased assets transfer to the buyer.
• The debtors expect closing to require them to submit federal, state and local license and permit applications and notices and to execute additional agreements, among them a successor liability with joint and several liability agreement under California regulation for the change of control of the debtors' Medi-Cal provider number and NPI to the buyer; the confirmation order authorizes the debtors to make those filings and execute those documents, the debtors having concluded that the associated liability risk is remote and outweighed by the benefit of closing.
• The confirmation order's blanket approval of governmental consents does not excuse compliance with any regulatory requirement governing licensure, certification, enrollment or operation of the pharmacy businesses, or any obligation under the plan's United States reservation.

Transition Services

• Section 6.17 of the APA requires the buyer, Omnicare and CVS Pharmacy to negotiate in good faith a transition services agreement to be entered into at closing, under which CVS Pharmacy and Omnicare will provide mutually agreed post-closing services to facilitate the orderly transfer of the business, purchased assets and assumed liabilities while preserving Omnicare's access to the resources it needs to administer the plan and wind down its estate. Duration and cost of each service will be set in that agreement.
• The agreement will also obligate the buyer to give the plan administrator continuing access to books, records and information needed to discharge its plan duties, and continuing access to employees and information in connection with insured claims, until the two enter a separate access agreement.
• The transition services agreement and the amended APA had not been filed as of the confirmation order and may be approved by separate order before the effective date; each must be in form and substance reasonably acceptable to the debtors, the buyer, the CVS entities, the committee and the DIP lender.

DIP Financing

• Size: $110 million senior secured superpriority debtor-in-possession facility from JMB Capital Partners Lending, LLC, as agent and lender, under the final DIP order entered Nov. 3, 2025 and amended by order entered Feb. 27, 2026.
• Treatment: DIP claims — principal, accrued interest, fees, costs, any indemnification obligations and expenses — are indefeasibly paid in full in cash on the effective date from sale proceeds or other consideration available under the plan, and on that payment the DIP lender's liens and security interests are released, terminated and discharged.

Limited Consolidation

• The estates are consolidated solely for voting, confirmation and distribution purposes: claims against any debtor are treated as claims against a single consolidated estate; duplicative claims filed against multiple debtors on the same underlying obligation, including guarantee and other derivative-liability claims, count once; each class is a single class across all debtors voting as one constituency; the section 1129 confirmation tests, including sections 1129(a)(8), (a)(10) and (b), are determined on a consolidated basis; and a single set of classes, disclosure statement, ballot and tabulation applies to all debtors.
• The consolidation is not substantive. It does not affect any debtor's legal or corporate structure, does not merge or consolidate any legal entities, and does not disturb the mutuality requirement for setoff under section 553.

Treatment of Claims and Interests

• Administrative claims, DIP claims, priority tax claims and statutory fees are unclassified. Administrative claims are paid in cash in full on the later of the effective date, allowance, or a date agreed with the plan administrator; requests must be filed by the administrative claims bar date, 60 days after the effective date, or are forever barred, though professional compensation claims, DIP claims and claims entitled to section 503(b)(9) priority are exempt from that requirement. No distribution is made from wind-down assets on an administrative claim that is an allowed insured claim until all remedies under the applicable policy are exhausted. Priority tax claims are paid in cash in full at the debtors' or plan administrator's election, or receive the treatment section 1129(a)(9)(C) requires. Allowed professional compensation claims are paid in cash promptly after allowance by final order, with final applications due by the professional fee bar date and objections due within 21 days of filing. Statutory fees under 28 U.S.C. § 1930(a) continue, with interest under 31 U.S.C. § 3717, until each case is converted, dismissed or closed.
• Class 1, other secured claims (unimpaired, deemed to accept, not voting): at the debtors' or post-effective-date plan administrator's option — cash equal to the allowed claim including any section 506(b) postpetition interest; reinstatement under section 1124(2); or other treatment rendering the claim unimpaired.
• Class 2, other priority claims (unimpaired, deemed to accept, not voting): cash equal to the allowed claim on or as soon as practicable after the effective date. CVS prepetition claims are excluded from the class and the CVS entities receive nothing on account of other priority claims.
• Class 3, general unsecured claims (impaired, voted to accept): pro rata share of distributable estate value remaining after allowed administrative claims, DIP claims and allowed Class 1 and Class 2 claims, on each distribution date, until paid in full. Rejection damages claims are classified here, subject to the section 502(b)(6) cap on lease rejection damages. CVS prepetition claims are excluded and the CVS entities receive nothing on account of general unsecured claims.
• No distribution is made from wind-down assets on a general unsecured claim that is an allowed insured claim until all remedies under the applicable policy are exhausted, and the plan leaves the workers' compensation order in place after the effective date.
• Class 4, the DOJ claim (impaired, entitled to vote, no ballot returned): allowed at $952,717,824.19 (Claim No. 419) and not subordinated under section 510 or otherwise, but the DOJ agreed under the DOJ and CVS agreements to defer receipt of distributions until all allowed Class 3 claims are paid in full, or a reserve for payment in full is established, after which it may receive distributions up to the full claim amount.
• Class 5, CVS prepetition claims (impaired, voted to accept): all prepetition claims of the CVS entities, including the $54,450,254 proof of claim CVS Pharmacy filed Jan. 30, 2026 (Claim No. 332) and any claims carrying section 503(b)(9) administrative status. The court classified the class separately as insider-held claims subject to the negotiated subordination. No distribution until both the DOJ claim and all other allowed claims, including all allowed general unsecured claims, are satisfied in full. The CVS entities also waive any claim against the debtors or their estates on account of payments they must make to the DOJ under either settlement, and take nothing on prepetition administrative claims until Class 3 and the DOJ claim are paid in full; their post-petition ordinary-course administrative claims, which are non-released obligations, are paid in full alongside other administrative claims.
• Class 6, surviving equity interests (unimpaired, deemed to accept, not voting): interests in the reorganizing debtors listed on Exhibit A, each held by another reorganizing debtor, are retained. The debtors may, at any time up to two business days before the effective date and with the buyer's consent, cancel a Class 6 debtor's existing equity and issue new interests to another reorganizing debtor.
• Class 7, other equity interests (impaired, deemed to reject, not voting): interests in the debtors listed on Exhibits B and C are canceled, released and extinguished for no distribution. For the Class 7 reorganizing debtors, new interests representing 100% of the equity are issued to the buyer or its designee on the effective date on account of the consideration paid under the sale documents and not on account of any prepetition interest; interests in the liquidating debtors are simply canceled. Instruments evidencing canceled claims and interests survive only to let holders of allowed claims receive distributions and to let the applicable agents make them.
• The court confirmed the plan over Class 7 under section 1129(b), finding no similarly situated class treated more favorably — characterizing the unimpaired Class 6 intercompany interests as a structural mechanic preserving the corporate architecture through which the buyer acquires and operates the reorganized debtors rather than a distribution on account of a prepetition interest — no junior holder retaining property, and no senior holder receiving more than payment in full.
• Until the plan supplement was filed on Sept. 3, 2026, the debtors could reclassify any debtor other than Omnicare among liquidating, Class 6 reorganizing and Class 7 reorganizing status with the buyer's consent, with any reclassified entities disclosed there.
• Other than as the sale documents and plan provide, neither the buyer nor the reorganized debtors bear any liability for any claim or distribution under the plan, including the DOJ claim.

Voting Results

• Classes 3, 4 and 5 were solicited as the only voting classes. Classes 3 and 5 each accepted by the requisite majorities in number and amount under section 1126(c); Class 4 returned no ballot and is neither deemed to accept nor to reject. Class 3, an impaired non-insider class, satisfied section 1129(a)(10) without counting any insider acceptance.

Best Interests and Feasibility

• The best-interests finding turns on the Chapter 7 comparison: in a hypothetical Chapter 7 liquidation the DOJ claim and the CVS entities' claims would share pari passu with, or ahead of, general unsecured claims, and the estates would bear additional administrative costs including trustee commissions, materially diluting general unsecured recoveries relative to their treatment under the plan.
• The court found the plan feasible: sale proceeds, the other wind-down assets and insurance policy proceeds are sufficient to make all distributions and payments the plan requires, the plan administrator and creditor representative will have the financial wherewithal to meet their post-effective-date obligations, and the wind-down of the liquidating debtors is itself the orderly liquidation the plan proposes.
• In approving the settlements the court weighed the probability of success and the complexity, expense and delay of the litigation they resolve — litigation over the allowance, priority and treatment of the DOJ claim and the appellate proceedings on the FCA judgment — and found creditor recoveries materially enhanced by the negotiated deferral and subordination.

Vesting of Assets and Wind-Down

• On the effective date, all property of each reorganizing debtor's estate — plus any non-estate property of that debtor not otherwise disposed of under the plan or sale documents — vests in the applicable reorganized debtor free and clear of claims, liens, charges, encumbrances and interests under sections 363(f), 1141(b) and 1141(c). Concurrently, and for a secured claim on satisfaction in full of the allowed portion, all mortgages, deeds of trust, liens, pledges and other security interests against estate property are released and discharged without further action or any Uniform Commercial Code filing, with the holders' interests reverting to the plan administrator, the buyer or the applicable debtor.
• All excluded assets, including reorganizing debtor excluded assets and the liquidating debtors' books, records and accounts, vest in Omnicare's estate as wind-down assets free and clear, to be administered, liquidated and distributed by the plan administrator. The wind-down assets also comprise cash remaining in the estates immediately before the effective date, causes of action not released or transferred in the sale, any other estate property not sold or distributed to the buyer, the Heartland interests, and proceeds of the foregoing. The Heartland interests — OCR Services' interests in non-debtor Heartland Healthcare Services, LLC and any interests it holds in non-debtors Heartland Pharmacy of Maryland and Heartland Pharmacy of PA — do not vest or re-vest in OCR Services, any other reorganized debtor or the buyer, and are treated as wind-down assets.
• Attorney-client privileges, work-product protections and similar immunities relating to the wind-down assets, claims reconciliation or preserved causes of action vest in the plan administrator, who may assert or waive them on behalf of the liquidating debtors' estates without waiver by reason of the vesting.
• Each reorganized debtor may operate its business and use, acquire or dispose of property free of Bankruptcy Code and Bankruptcy Rules restrictions, and the plan administrator may administer the wind-down assets, in each case without court supervision except as the plan or confirmation order expressly requires.
• Wind-down expenses — all post-effective-date costs of the liquidating debtors or plan administrator in implementing and administering the plan, including the plan administrator's fees and those of its professionals, employees and consultants — are paid from the wind-down assets ahead of any allowed claims or interests treated under Articles II and III. On the effective date the sections 327 through 331, 363 and 1103 retention and compensation requirements and the interim compensation procedures order cease to apply to post-effective-date services, and the debtors, reorganized debtors and plan administrator may employ and pay professionals without further court approval; the liquidating debtors, their estates and the plan administrator bear no obligation for professionals the reorganized debtors employ.
• Omnicare remains in existence after the effective date to hold and liquidate the wind-down assets; pursue recoveries under the insurance policies and address coverage claims; pay the plan administrator's professionals, employees and consultants; run claims reconciliation; and provide the transition services and satisfy the liquidating debtors' other post-effective-date obligations under the sale documents. The other liquidating debtors' cases are expected to close after the effective date, and each such debtor dissolves automatically upon entry of its closing order without further corporate action or any dissolution filing.
• Each reorganizing debtor continues as a reorganized debtor operable by the buyer as a going concern, with governance, management and operation as set out in the plan supplement and organizational documents deemed amended to bar nonvoting equity securities to the extent section 1123(a)(6) requires. Section 1123(a)(6) is inapplicable to the liquidating debtors, which issue no securities.
• Each reorganizing debtor's Chapter 11 case is deemed closed and fully administered on the effective date, with the plan serving as the post-confirmation report and application for final decree and the confirmation order serving as the final decree. Neither the reorganized nor the liquidating debtors must file post-confirmation operating reports for the reorganized debtors, and no post-effective-date U.S. Trustee fees accrue on their account; all pending matters are thereafter administered in Omnicare's case.
• Directors, managers and officers of each liquidating debtor are deemed to resign on the effective date in favor of the plan administrator, who becomes sole officer, manager and representative. Under section 1141(d)(3) the liquidating debtors receive no discharge; each reorganizing and reorganized debtor is discharged under section 1141(d)(1).

Plan Administrator and Creditor Representative

• The court approved Matthew Sorenson as plan administrator, effective on the effective date. Selected by the debtors with the consent of CVS Health and the committee, neither to be unreasonably withheld, he serves as the liquidating debtors' sole officer and their estates' representative under section 1123(b)(3)(B), with the powers of a trustee under sections 323, 704 and 1106, and represents the reorganized debtors' estates only where the plan expressly so provides. His identity and material engagement terms, including compensation, are disclosed in the plan supplement; he files the liquidating debtors' monthly operating and subsequent quarterly reports; he has no duties beyond those the plan, plan supplement and confirmation order set out; and no bond or surety is required of him or any disbursing agent. Neither the buyer nor the reorganizing debtors bear any responsibility for the plan administrator's duties.
• The court approved Matthew Dundon, the committee's selection, as creditor representative under the CVS agreement and the plan, effective on the effective date. The creditor representative exercises consultation and oversight functions solely on behalf of holders of general unsecured claims, and reasonable fees and expenses are paid from the wind-down assets as a plan expense without further court approval.
• The plan administrator must consult the creditor representative bi-weekly on claims reconciliation and objections for as long as the committee or the representative exists, and give at least five days' notice of any claim objection; any proposed allowance of a non-insured claim exceeding $25,000 or where the disputed amount exceeds $25,000; and any proposed allowance expected to materially and adversely affect Class 3 recoveries. Where disagreement over an objection or proposed allowance survives the notice period, the creditor representative may appear and be heard.

Employee Matters

• The equity of the employer debtor entity — Best Care LTC Acquisition Company LLC, renamed "Omnicare Payroll, LLC" on or before the effective date — is canceled on the effective date and new interests representing 100% of its equity are issued to the buyer or its designee, transferring the debtors' business employees to the buyer.
• Business employees of Omnicare of Nevada, LLC are the exception: their employment terminates on the effective date and they will be offered employment by LTC Pharmacy of Nevada, LLC, a newly formed direct or indirect subsidiary of the buyer.
• Neither the buyer nor the reorganized debtors bear any liability for awards payable under any key employee incentive or retention plan approved in the cases.

Distributions

• The plan administrator, who may serve as disbursing agent without bond, makes initial distributions on or as soon as practicable after the effective date in the Article III priority order, and distributes on disputed claims that later become allowed within 60 days of allowance.
• Before any distribution, the plan administrator must reserve the full amount of all disputed claims, or such lesser amount as the court authorizes under section 502(c), except that no reserve is required for an insured claim it reasonably believes is covered by and payable from insurance proceeds. No distributions are made on disputed claims until they are allowed by final order or otherwise resolved.
• Undeliverable distributions are held in trust for the holder; if unclaimed for 180 days they are irrevocably forfeited and revest in Omnicare's estate as wind-down assets. Distributions of less than $10 are not required, and a holder entitled to less than that amount is forever barred from asserting the claim. A holder whose total recovery from a plan distribution plus a non-debtor payment exceeds its claim must repay the excess within 14 days, after which annualized interest at the federal judgment rate, the 28 U.S.C. § 1961 rate in effect on the petition date, accrues for each business day until repayment.
• The plan administrator must satisfy all tax withholding and reporting requirements and may condition distributions on delivery of tax, know-your-customer and OFAC certifications, with distributions forfeited for non-compliance revesting as wind-down assets. It may, but need not, exercise setoff or recoupment rights, except that no setoff or recoupment may be exercised on avoidance claims against a supplier or its related parties released under Article VIII.
• Forfeiture for non-compliance follows a two-step clock: a holder that does not respond within 30 days receives a second request, and forfeits only on failing to comply within 90 days after that second request.
• The distribution record date is the confirmation date unless the confirmation order or a later order designates another; the transfer registers close at the close of business that day, and the disbursing agent deals only with the record holders as of then.
• Distributions are made free and clear of liens, claims, encumbrances and other interests. Postpetition interest does not accrue or get paid on any claim unless the plan or confirmation order specifically provides otherwise.

Claims Administration

• The plan administrator retains all rights and defenses of the debtors and estates as to claims and interests, including under section 502(d), and holds exclusive authority — subject to the creditor representative's consultation, notice and appear-and-be-heard rights — to file, withdraw or litigate objections through 180 days after the effective date, subject to extension for cause; to settle or resolve any disputed claim without court approval; and to adjust the claims register, including expunging paid, satisfied, amended or superseded claims, without filing an objection.
• A claim paid in full by a non-debtor, non-plan-administrator party is reduced or disallowed without an objection or further order, on notice of the reduction to the holder. The debtors or plan administrator may at any time seek estimation of a disputed claim under section 502(c), whether or not an objection is pending, and a claim expunged or disallowed from the register that remains subject to appeal or lacks a final order is deemed estimated at zero unless the court orders otherwise. A claim filed after the applicable bar date takes no distribution unless it was deemed timely by final order on or before the confirmation hearing.
• A claim for reimbursement or contribution disallowed under section 502(e)(1)(B) is forever disallowed and expunged notwithstanding section 502(j) to the extent it remains contingent when allowed or disallowed, unless before the confirmation date it was adjudicated non-contingent or the holder filed a non-contingent proof of claim and obtained a final order so determining.
• Any holder is deemed to have waived arguments over the amount, priority, secured status or non-subordination of its claim premised on an agreement with the debtors or their counsel that was not disclosed in the plan, sale order, plan supplement, disclosure statement or other court filing, or evidenced by a written instrument acknowledged before the confirmation date.

Insurance and Insured Claims

• Nothing in the plan or confirmation order impairs the enforceability of any insurance policy covering claims against any debtor or other party. Pre-effective-date insured claims continue to be covered and paid under the applicable policies; the debtors' existing rights are preserved; their rights, title and interests as insured vest in the plan administrator and may not be modified absent a further order unless the modification has no material negative impact on insurance available to pay claims or defense costs; all defenses to insured claims are retained; and the claims run through the plan's resolution procedures.
• The portion of an allowed insured claim that insurance ultimately does not cover entitles the holder to a distribution under the plan, to the extent that portion is itself allowed.
• The automatic stay and discharge injunctions are modified on the effective date to let holders of insured claims prosecute their claims to final judgment in a court of competent jurisdiction and collect solely from insurance proceeds, and to allow — but not require — the debtors, the plan administrator, the insurers or third-party administrators to handle, defend, settle or pay those claims. The debtors, liquidating debtors, reorganizing debtors and plan administrator retain access to the captive insurance program, run by CVS's wholly owned captive CVS Caremark Indemnity Ltd., for insured claims whose deductibles or self-insured retentions that program paid in the ordinary course before the effective date.
• The plan administrator is responsible after the effective date for monitoring and pursuing pre-effective-date coverage claims for both liquidating and reorganizing debtor estates, including investigation, prosecution, settlement, compromise or abandonment. All rights, defenses and obligations of the debtors, plan administrator, estates and insurers under the policies are preserved.
• The plan notes that most holders of insured claims have no direct right of action against any insurer, including the captive program. Where a holder prosecutes an insured claim against a reorganized debtor, or against a liquidating debtor whose case has closed, Omnicare or the plan administrator may be substituted as nominal defendant without further order; where an insurer satisfies an insured claim, the holder's proof of claim may be expunged from the register without an objection or further order. A list of known pre-petition insured claims for which proofs of claim were filed is attached to the plan as Exhibit D; most entries are redacted to confidential-creditor designations, and the remainder are insurers, a guardianship service and other claimants, among them Farmers Property and Casualty as subrogee, National General, Progressive Northern, Liberty Mutual, Alacrity Solutions and RoadSafe Traffic Systems.
• The Chubb insurance program — policies issued by ACE American Insurance Company, ACE Property & Casualty Insurance Company, Indemnity Insurance Company of North America, Westchester Surplus Lines Insurance Company, Westchester Fire Insurance Company, Illinois Union Insurance Company, Pacific Indemnity Company, Federal Insurance Company, Executive Risk Indemnity Inc., Executive Risk Specialty Insurance Company and Chubb Custom Insurance Company — continues in full force on its own terms. Nothing alters the program's terms or the parties' rights and obligations under it, including those of the CVS entities; all coverage defenses are preserved; and Chubb need not file a proof of claim, administrative or cure claim, object to a cure amount, or move for setoff or recoupment. The debtors' rights and obligations under the program vest unaltered in the plan administrator, who must perform the non-monetary obligations whenever they arose, with all parties' rights to dispute those obligations reserved. No sale, assignment or transfer of the program, of any rights, proceeds or recoveries under it, or of any collateral posted for it may occur without Chubb's prior written consent; and as to insured claims the automatic stay and the plan's injunctions are lifted to let Chubb draw on that collateral at any time, hold or apply the proceeds against the debtors' and plan administrator's obligations in the order Chubb determines, and otherwise exercise its rights under the program.

Executory Contracts and Unexpired Leases

• Any contract or lease not otherwise assumed, rejected or transferred before the effective date is assumed and assigned to the buyer under the sale documents if held by a liquidating debtor, or assumed as of the effective date if held by a reorganizing debtor. All contracts and leases of the reorganized debtors are assumed unless rejected under the plan or another order; the rejection list appears in the plan supplement, and under section 2.02(b) of the APA the debtors may modify it with the buyer's consent until two business days before the effective date.
• Cure amounts are determined and paid under Article V and section 1123(d), subject to the sale documents and sale order. Under the sale order, counterparties that did not timely object to the assumption notices are deemed to have consented to the proposed cure amounts and are barred from asserting additional cure amounts or defaults, and payment of cure costs fully satisfies the debtors' section 365(b) obligations. Cure costs the buyer pays for contracts assumed by the reorganized debtors under the plan and for contracts assumed and assigned under the sale documents are collectively subject to the $1 million cure limit in section 2.05(d) of the APA. Assumption plus cure releases every claim or default under the assumed contract arising before the assumption date, monetary or nonmonetary, expressly including defaults under change-of-control and ownership-composition restrictions and other bankruptcy-related default provisions.
• Rejection damages claims must be filed by the rejection bar date or are forever barred and unenforceable against the debtors, estates, plan administrator or buyer; lease rejection claims are capped by section 502(b)(6); and allowed rejection claims are treated as Class 3 general unsecured claims.

Releases

• The debtor releases are granted solely by the debtors, their estates and the plan administrator in its representative capacity. No holder of a claim or interest and no other non-debtor grants a release, and the plan contains no nonconsensual non-debtor release — a structure the court measured against Harrington v. Purdue Pharma L.P., 603 U.S. 204 (2024).
• Released parties, each solely in its capacity as such, are each debtor and its estate; the CVS entities other than CVS Caremark Indemnity Ltd.; the DIP lender, JMB Capital Partners Lending; the committee and its members; and the buyer, GenieRx. Related parties of the debtors, the CVS entities, the DIP lender and the committee grant no release and, not being named released parties, receive none.
• The release covers claims and causes of action arising from the debtors, the Chapter 11 cases, the sale, business or contractual arrangements between any debtor and a released party, the DIP facility, the DOJ agreement, the CVS agreement, the plan or any related agreement. It does not reach the non-released obligations, post-effective-date obligations under the plan or its implementing documents, or claims arising from a released party's fraud, willful misconduct or gross negligence as determined by final order.
• Non-released obligations are the CVS entities' ongoing ordinary-course post-petition obligations with the debtors, including rights under the shared services described in the first day declarations and related insurance obligations; all post-closing obligations under the sale documents; the CVS entities' post-petition ordinary-course administrative claims; and the debtors' rights on insured claims under a policy issued by the CVS entities. Nothing in the plan reduces the releases of the CVS entities contained in the CVS and DOJ agreements.
• The court identified the consideration supporting the releases as the CVS entities' subordination of more than $54 million of prepetition claims, waiver of claims for payments made to the DOJ, and provision of shared and transition services; the DIP lender's $110 million facility; the buyer's $250 million cash payment plus assumption of the assumed liabilities; and the committee's and its members' fiduciary efforts in negotiating the settlement architecture. The releases were a negotiated condition of the DOJ agreement, the CVS agreement and the sale.
• Intercompany release: each debtor releases all intercompany claims against every other debtor arising on or before the effective date, and holders are permanently enjoined from pursuing them. The court grounded the release in the debtors' operation as a single integrated enterprise, recoveries flowing from a common pool of sale proceeds and wind-down assets under a single waterfall, and the circular litigation, expense and delay that prosecuting such claims would generate without raising any creditor's recovery.
• Supplier release: landlords, suppliers of goods or services and trade creditors are released from chapter 5 causes of action — including under sections 544, 545, 547, 548, 549, 550 and 553 — only to the extent those causes of action were not transferred under the APA and are not revesting in a reorganized debtor. No other estate claims against suppliers, and no claims against non-suppliers, are released. The debtors concluded that net avoidance-action value would be modest after section 547(c) defenses, the dilutive effect of section 502(h) claims and the cost and delay of litigation, and that preserving trade relationships for an orderly transition of the pharmacy operations is worth more to the estates.

Exculpation

• Exculpation reaches only estate fiduciaries: the debtors and their estates; the debtors' independent manager and co-chief restructuring officers, each for conduct within the scope of their duties; and the committee and its members for conduct within the scope of their duties.
• It covers postpetition acts or omissions connected to the Chapter 11 cases and to the formulation, preparation, dissemination, negotiation or filing of the plan, the disclosure statement, the DOJ agreement, the CVS agreement, the sale or any other document created in the cases. It carves out liability from any act or omission determined by final order to be actual fraud, gross negligence or willful misconduct, and does not extend to post-effective-date conduct other than conduct implementing and consummating the plan.

Injunctions, Gatekeeper and Successor Liability

• Two injunctions operate in parallel. As to the reorganizing debtors, Article VIII.E.2 is the permanent section 524(a) injunction attached to the section 1141(d)(1) discharge and otherwise enforces the releases and exculpation. As to the liquidating debtors, Article VIII.E.1 is a temporary injunction in aid of administering the wind-down assets that channels claims through the plan's reconciliation and distribution procedures, bars actions only to the extent they would interfere with that administration, effects no discharge, and expires as to each liquidating debtor on entry of a final decree closing its case or, if earlier, its dissolution or such other date the court orders. It does not bar an action commenced against a liquidating debtor after its case closes.
• The liquidating debtors' injunction bars commencing or continuing any proceeding; enforcing, attaching, collecting or recovering any judgment against the covered parties or the wind-down assets outside the plan's procedures; creating, perfecting or enforcing any encumbrance; and asserting setoff, subrogation or recoupment — in each case only where the action would interfere with administering, liquidating or distributing the wind-down assets.
• Gatekeeper: no party may commence or pursue a claim or cause of action against the debtors, the reorganized debtors or the exculpated parties that is released, exculpated or subject to the Article VIII.E injunctions without the court first finding, after notice and a hearing, that the claim is colorable and not discharged, released or exculpated — or, as to the liquidating debtors' injunction, that it would not interfere with the wind-down — and specifically authorizing the party to bring it. The provision does not enlarge the substantive scope of the releases or exculpation and does not reach claims that are not released or exculpated. The court holds sole and exclusive jurisdiction to decide colorability and, to the extent legally permissible, to adjudicate the underlying claim.
• No successor liability: on and after the effective date the buyer and the reorganized debtors, and their successors and assigns, are released from pre-effective-date liabilities premised on successor or transferee liability, de facto merger, mere continuation, continuity or substantial continuity of enterprise, alter ego, veil piercing or similar derivative or vicarious theories arising from the debtors, the cases or consummation of the plan and sale transactions; the buyer is not to be deemed a successor to, merged with, a continuation of, or otherwise liable for any claim against any debtor or CVS entity; and all holders of claims and interests and all other persons are permanently enjoined from asserting such a theory against the buyer, the reorganized debtors, their successors and assigns, or the purchased assets. The plan's injunctions likewise reach the successors and assigns of the debtors and reorganized debtors and their property. The court found these protections a fundamental inducement to the buyer's agreement to pay $250 million and assume the assumed liabilities, without which the estates could not have realized the going-concern value the plan distributes.
• The provision does not release, discharge or enjoin any direct claim against the buyer or the reorganized debtors for their own conduct; does not limit the reservations in favor of the United States; and does not preclude the National Labor Relations Board or any court from finding a purchaser of Omnicare of Nevada's assets, or any entity employing its former employees, subject to collective bargaining obligations under NLRB v. Burns International Security Services, 406 U.S. 272 (1972), or preclude the NLRB, or the Pharmacy Guild and the International Association of Machinists as charging parties, from pursuing pre-effective-date unfair labor practice charges against Omnicare of Nevada solely to liquidate the claims asserted — though any resulting award or settlement is payable only under the plan's terms and is not enforceable against the buyer, any reorganized debtor or their assets.
• All holders of claims and interests and other parties in interest, together with their current and former employees, agents, officers, directors, principals and direct and indirect affiliates, are enjoined from acting to interfere with implementation or consummation of the plan. Existing stays and injunctions under sections 105 and 362 remain in effect until the effective date, when the plan's and confirmation order's injunctions take over.

Preserved Causes of Action

• All causes of action not released under Article VIII or transferred in the sale are preserved under section 1123(b)(3)(B), and the plan administrator may investigate, prosecute, settle, compromise, abandon or otherwise dispose of them. No preclusion doctrine — res judicata, collateral estoppel, issue or claim preclusion, or judicial or equitable estoppel — applies to them by reason of confirmation or consummation.

Conditions Precedent to the Effective Date

• Effectiveness turns on satisfaction or waiver of:
  • entry of an order approving the disclosure statement, in a form reasonably acceptable to the committee, as containing adequate information;
  • entry of the confirmation order in form and substance reasonably acceptable to the debtors, the buyer, the CVS entities, the committee and the DIP lender, unstayed, unmodified and not vacated on appeal;
  • closing of the sale, or the sale being capable of closing substantially simultaneously with the effective date;
  • approval of the DOJ agreement by final order and its effectiveness by its terms;
  • approval of the CVS agreement by final order and its effectiveness by its terms;
  • filing of the plan supplement in form and substance reasonably acceptable to the debtors, the buyer, the CVS entities, the committee and the DIP lender;
  • filing with and approval by the court of the amended APA and the transition services agreement, each in form and substance reasonably acceptable to those same parties; and
  • effectuation or execution and delivery of all other actions and documents needed to implement the plan.
• The debtors may waive any condition other than entry of the confirmation order with the consent of the DIP lender, the CVS entities, the buyer and the committee, without notice or further court action. The court found each condition reasonably likely to be satisfied or waived.

Revocation, Withdrawal and Modification

• The debtors may revoke or withdraw the plan before the effective date and may modify it before or after confirmation but before substantial consummation, in each case subject to the consent rights of the DIP lender, the buyer and the committee and to section 1127 and Bankruptcy Rule 3019. If the sale does not close by the date set in the sale order, as extended, the plan is deemed withdrawn and revoked.
• On revocation, withdrawal or vacatur of the confirmation order, the plan is null and void, any settlement or compromise embodied in it is null and void, and nothing in it waives or releases any claim, interest or cause of action.
• The court approved the plan modifications made since solicitation as technical or clarifying changes, changes made with the consent of affected holders, or changes not adversely affecting any other claim or interest. No additional disclosure or resolicitation is required, holders that voted to accept are deemed to accept the plan as modified, and no holder may change its vote on account of the modifications. The debtors may further modify or amend the plan supplement until the effective date, subject to the plan's consent requirements.

Severability, Governing Law and Effectiveness

• Each term of the plan, including the DOJ and CVS agreements, is valid and enforceable, integral to the plan and not subject to deletion or modification except under the terms of the plan and confirmation order or, for the settlements, the terms of the applicable agreement; the provisions are nonseverable and mutually dependent. Where any provision of the plan documents or the plan conflicts with the DOJ agreement, the DOJ agreement controls.
• The plan governs inconsistencies with the disclosure statement and plan exhibits; the plan supplement controls over the plan; the confirmation order controls over the plan; and nothing in either modifies the sale order except as expressly provided. The confirmation order supersedes any inconsistent prior order in the cases, again excepting the sale order.
• Texas law governs the plan and related agreements, and corporate governance matters, absent applicable federal law or a contrary choice of law in a particular agreement; the confirmation order, the plan, the plan supplement and related documents apply and are enforceable notwithstanding any otherwise applicable non-bankruptcy law.
• The court waived the 14-day stay under Bankruptcy Rule 3020(e) and, to the extent applicable, the stays under Rules 6004(h) and 6006(d) for cause, citing the need to consummate the sale promptly to preserve business value, maintain continuity of pharmacy services to long-term care facilities and limit administrative expense. The confirmation order is a final order, immediately effective, enforceable and self-executing; the debtors may consummate the plan at any time after entry, subject to the conditions precedent. On the effective date the plan is deemed substantially consummated under sections 1101(2) and 1127, and it binds the debtors, reorganized debtors, plan administrator, creditor representative, buyer, all holders of claims and interests regardless of impairment or vote, all parties to the plan's settlements, releases and injunctions, every entity acquiring property under the plan, and all non-debtor contract and lease counterparties.
• Transfers under, in contemplation of, or in connection with the plan — including the sale, the vesting of assets in the reorganized debtors, and any deed, bill of sale, assignment or other transfer instrument — are exempt under section 1146(a) from recording, stamp, conveyance, intangibles, mortgage, real estate transfer and mortgage recording taxes, UCC filing or recording fees and similar assessments, and state and local officials are directed to forgo collection and accept the instruments for filing without payment. The plan's own exemption provision also reaches sales and use taxes and regulatory filing or recording fees.
• The confirmation order constitutes every state or other governmental approval and consent required to implement the plan, except that it neither relieves any entity of an obligation under the United States reservation nor excuses compliance with regulatory requirements governing licensure, certification, enrollment or operation of the pharmacy businesses; every governmental agency is authorized to accept the documents, mortgages and instruments needed to consummate. The notice of effective date has the effect of a court order, constitutes sufficient notice of entry to filing and recording officers, and is a recordable instrument notwithstanding contrary non-bankruptcy law.

Committee Dissolution

• The committee dissolves on the effective date and its members are released and discharged from their rights and duties, except that it continues in existence with standing to pursue fee and expense applications for itself and its professionals and to participate in appeals of the confirmation order or in which it is a named party. The plan administrator pays the committee's reasonable post-effective-date fees and expenses incurred in connection with those limited matters.

Objections and Party-Specific Reservations

• All objections and reservations of rights not withdrawn, waived, settled or otherwise resolved were overruled on the merits with prejudice, including the objection of 1015 North Garrison, LLC (Docket No. 1256) to the extent not withdrawn.
• 1015 North Garrison, LLC d/b/a Vancouver Specialty and Rehabilitative Care may nonetheless assert defensive setoff and recoupment theories in any action the reorganized debtors or their successors commence or continue against it, including the pending action in Clark County Superior Court, Washington, to the extent those theories arise from the same transactions or occurrences as the reorganized debtor's claims.
• United States: Article XII.J governs as to the United States, its agencies and instrumentalities. Except as the DOJ agreement provides, nothing bars the United States from pursuing police, regulatory or criminal action, or discharges, releases, exculpates or impairs any obligation to the United States that is not a "claim" under section 101(5), any claim arising on or after the confirmation date, or any liability described in Article XII.J, subject to the provisos there. Nothing authorizes the assumption, assignment, sale or transfer of any federal interest — federal grants, registrations, billing numbers, national provider identifiers and provider transaction access numbers among them — without compliance with the terms of that interest and applicable non-bankruptcy law; nothing sets a cure amount for a federal interest or requires the United States to novate, approve or consent to a transfer; nothing constitutes an approval or consent by the United States, waives its property rights, or compromises any of its claims; and its setoff and recoupment rights against the reorganized debtors are preserved.
• State of Texas and its agencies, including the Texas Health & Human Services Commission: nothing discharges, releases, precludes or enjoins any obligation that is not a "claim" under section 101(5), any claim arising on or after the confirmation date, any obligation under police or regulatory statutes applicable to an entity as owner or operator of property after the confirmation date, or any obligation of any person other than the debtors, and the state may assert and enforce those obligations outside the bankruptcy court. Nothing authorizes the transfer or assignment of any license, permit, registration, authorization or approval the state issued, or the discontinuation of any obligation under one, without compliance with all applicable legal requirements and approvals under police or regulatory law; no entity is relieved of responding to the state's information requests; the state's setoff and recoupment rights are unaffected, with all parties' rights and defenses preserved; and no tribunal is divested of police or regulatory jurisdiction, though the court retains jurisdiction to interpret and enforce the plan and its own orders. Nothing in that paragraph affects the relief granted to the buyer or the purchased assets under the sale order.
• Texas Comptroller of Public Accounts: setoff rights are preserved under section 553; no request for payment is required under section 503(b)(1)(D) for amounts coming due post-petition on section 503(b)(1)(B) or (C) claims; all delinquent tax returns, including any final Omnicare franchise tax return, must be filed within 180 calendar days after the effective date, and any franchise tax return under a reporting extension must be filed by the extended due date and paid in full on filing; proofs of claim may be amended without leave or consent; and the bankruptcy has no effect on the Comptroller's rights against non-debtor third parties. Its priority tax claims are treated under section 1129(a)(9)(C) beginning on the effective date and its general unsecured claims under the Class 3 treatment. On any payment default, interest accrues at the statutory rate under section 111.060 of the Texas Tax Code and the Comptroller preserves all bankruptcy and state-law remedies, with the debtors' and the other plan parties' defenses likewise preserved.
• Tennessee Department of Revenue: consistent with section 503(b)(1)(D), it need not file a request for payment of an expense described in section 503(b)(1)(B) or (C).
• UnitedHealthcare Insurance Company, Change Healthcare Solutions LLC and their parents, subsidiaries, affiliates, successors and assigns: all setoff and recoupment defenses are preserved, and no court order or other relief is needed for them to assert those defenses in litigation or arbitration with the debtors, reorganized debtors or their successors.
• Consistent with section 525 and the Supremacy Clause, no person or governmental unit may discriminate against the debtors, reorganized debtors, plan administrator or buyer, or deny, revoke, suspend, refuse to renew or condition a license, permit, charter, franchise or similar grant, solely because the debtors were Chapter 11 debtors, were insolvent, or did not pay a dischargeable debt.

Retention of Jurisdiction

• The court retains jurisdiction over all matters arising out of or relating to the cases and the plan to the fullest extent permitted by law under sections 105(a) and 1142, including matters relating to the sale, the DOJ agreement and the CVS agreement; disputes over the plan's releases, injunctions and related provisions, with authority to enter orders implementing them; claim allowance, objection, subordination, estimation and distribution; contract assumption, assignment and cure disputes; professional fee applications; and enforcement of prior orders. Jurisdiction over the compromise order, the CVS agreement and the DOJ agreement is retained under the terms of the applicable order or agreement.

Post-Effective Date Notice and Reporting

• After the effective date, pleadings need be served only on the U.S. Trustee, the creditor representative, the plan administrator, any party known to be directly affected, and any party that requests notice in writing or files a Rule 2002 request after the effective date.
• The debtors and plan administrator have no obligation to provide reports otherwise required under the first and second day orders — though the debtors continue reporting to the committee until the effective date — or to file monthly operating reports, including for periods not covered before the effective date; U.S. Trustee quarterly reporting requirements continue to apply.
• Utilities and other parties holding a section 366 deposit or other adequate assurance must return it to the plan administrator promptly after the effective date if not already returned or applied.