Free Appendix - District Court of Delaware - Delaware

Case 1:04-cv-01565-SLR

Document 125

Filed 04/17/2007

Page 1 of 37

Case 1:04-cv-01565-SLR

Document 125

Filed 04/17/2007

Page 2 of 37

Case 1:04-cv-01565-SLR

Document 125

Filed 04/17/2007

Page 3 of 37

Case 1:04-cv-01565-SLR

Document 125

Filed 04/17/2007

Page 4 of 37

JTES.OFAMEETJNG

OF THE BOABD OF DIRECTORS

OF

CO RAM HEALTHCARE
July

CORPORATION

312000

meeting was 1301 convened
at

of

the

Board

oDirectOrS

of

Coram
at

Healthcare

CoOratiOfl Torres

the CompaflY
Friedman

approximatelY
the

1100

a.m
Floor

Avenue

of

Americas

36

EDT New
Daniel

KasowitZ

Benson
York

LLP
10

York New
Crowley
Ainaral

10019

Participating

the

Chairman

of

the

Board
Peter meeting

Chief Smith

meeting Executive

were the following
Officer and and Sandra

DitectorS

President it

Donald

William Also

Casey
in the

were

Srholey

telephOniCallY and
Scott

partidipating Senior

telephonicallY
Allen and

Marabito Executive
Chief Accounting

Vice

President Also

It Danitz were
the Torres

Vice President
legal

Finance
financial

following

and

Officer

participating

advisors

David

Benson Friedman Esquire of lCasowitz
Director Chanin
Capital

Fijedman

LLP Russell
Senior Vice Chanin Tiliman

Beliusky President
Capital

eniorManagi0g
Chanin
Capital Christina

Partners

Eric

Scroggins Healthcare and

Partners Rober Morrison

Stobo

Vice

President

Group
Eugene

of Deutsche

Banc

A1ex

Brown

Partners

Esquire of

Reed Smith

Shaw

McClay L.L.P Board
convened
the

Mr
secreta
at

Crowley Chairman
the meeting

of

meeting

and

Mr

Marabito

acted

as

the

REVIEWD
Upon
Audit

APPROVAL
motion
dated duly

MiNUTES
made and

FROM
the

pQETG
minutes

seonded
of
the

from

the

prior

meetings

of

thern

Committee and
as

March 2000
having

2000 and
been

Board

of

Directors to the

dated

May 17 2000

June

2000
approved

Lhne
preseitted

prevjously

provided

Board were

unanimoUslY

FUANCLLREPOT
Mr
jformation Danitzs
operating quarter

..
discussion

Crowley
as

requested

the

financial

report presently

Mr

Danitz to

led the

of

the

financial

previously included
for the

presented

and
other

updated
information including

Board

of

Directors
the for

Mr
second to the

and

schedules
to

Companys
the

report results

among
month

financial

ended and
the

June30
year-to-date includiiig

2000

actual

budget Also
quarter

ended were 2000

June

30 2000
of
the

ended second

June

30 2000
2000
to
first

reported

2000

second June

Board
quarter

analyses
to

variances 1999

quarter June

second

and

quarter

year-to-date to the

30 2000
through

to

spear-to-date

30
the

i999
results

Messrs Danitz and Crowley
Discussion
results

responded
the

Board

discussion

of

the

financial

was had concerning
of

financial

results with

and without

the.inclusiOfl

of

operating

Coram

Prescription

Services

CPS
COR-EQTy

0014762

o4k
A537

EXHIBIT

Case 1:04-cv-01565-SLR

Document 125

Filed 04/17/2007

Page 5 of 37

Minutes

oftheBoard

of

Directors

Jtily3l2000 Page

Discussion
that

continued
inclusion cost

concerning

the

trends

evident

in the

operating

results

It

was noted
obtained other

without

the

of

CPS
as

the

Companys
to

EBITDA
growth
its It

was
It

ahead

of

budget

thnmgh
factors1

continued
the

savings

opposed
to

revenue

was noted
in

that

among

Company
for the

was

continuing inventoly

improve
clinical research

and lower expenses
for the

costs

such

operating net

categories

as drugs

supplies payroll
infusion

and

was noted
ended
it

that

revenues

were
In

under .budget coinparisOnof

and

cliniial

period

June noted

30
that

2000
revenue

year-to-date percent

2000

to year-to-date

1999
other

revenue
flcctors

was

was

approximately two in
the

less reduced quarter

by ambng CPS

the runoff
in in as

of the Aetna.busineSs

Companys
ofthe
the

second

There has been
without

70% dudn
$35
the

improvement
reductions

EBITDA
revenues

over having

1999
been At

inclusive offiet

MIP

accrual

and

proceeds
out

The

by

cost

reductions has

that

were
rate to next

carried

this

period

described
inclusive discussion

before of
the

midyear
accrual description additional

the

Company

run

produce turned
to

miIion

EBIIDA
The Bpard
in the

MIP

Discussion of
the

and

balance
to

sheet-

included indicated that creates the

analysis

projected

balance

sheets to

provided

the

Mr
the and

Danitz

sche4ules of
the

would
current

be

sent

the of

Board

It

was

noted of
as

discussion notes

reclassification greater short-term

maturities

the

long-term current

debt
ratio

liability

that

produces

negative

of June

30 2000

CPSSALE
The Company
with gain
to the represented

by Deutsche
518.5

Banc Net

Alex Brown
proceeds of
the arc

sold

CIS

for to

$41.3

million

Company
Senior million

of

million and

intended

pay down
in the debt

the

Companys
of
at

Revolving $38

Credit

Facility

portion

Series

Notes

amount would
Stark for

approximately

combined
million notes

COmbined

Series the sale

and
is

remaining
to

remain pay
the

approximately on
the

5252

The

equity the

from
call

insufficient

meet

11

ballon

Series

or satisfy

of

the

Series

notes scheduled

May

272001
Beyond Company
and
the to the presently the intended

debt repayments
the

discussion

concerned $168
million

the

necessity

of

the

address

payment of
the

of

note Notes
fl

at

approximately

on

May 27 2001
may be
called

potential

default

Series Stark

of approximately
equityrequirernentS

$92

million

which

I1ay

27 2001

and

the

so-called

net

2000

2001

BUSINESS PLAN
rericwed
with the
its

Mr
business regarding principal at obtain business the
its

Crowley
for the strengths interest
It

Board

an

overview

of the

operational

and

financial discussed including

plan

Company
and
It

and

underlying
including

assumptions
its

The business plan was
to

weaknesses
noted the that

capacity sale

make
the

debt

service

and

was

even

after plan

the

of

CPS

equity the

of

the

Company
earnings

is

deficit

was noted
equity

that

business

cannot year

demonstrate

required the

to

positive plans in are

in.the positive

current the

calendar plans

Further

although
the

2000

and

2001 due on of
the

cash

business

cannot overcome

balloon payment the
implications

notes

May 200

without

new financing

The Board

discussed

COR-EQ

00t4763

A538

Case 1:04-cv-01565-SLR

Document 125

Filed 04/17/2007

Page 6 of 37

Minutes

of

the

Board

of

Directors

July31 2000
Page

business

plans

that

show
the

after

improved does

cash

flow

the

sale

of

CPS

the

reduction to

of debt
the

and Stark

improved problem

operations or meet
the

Company

not have

the

financial other

wherewithal options

resolve

balloon payment

when due

without

STARK

11

EpTJrrvREOIJIREMENTS

Christina

Morrison

joined

the

meeting

c2

STkRI

II

EOUITY

ANALYSIS
with
discussion for

In connction
cash

the

of

Companys
and 2001

business

plan

and

projected

earnings
the

flow

and
the

financial

position

2000

an4MTill-P
the the

Board
to

examined

analysis the

provided

by Management
exception were
forecasted debt

regarding Stark
II at

proposed
end

equity years

reuired 2000
plan

be

compliant with

public the sale various

company
calculations

of

of

the

and

2001

To

aid

the

analysis

presented

under

various
at

business

pro formas of
the
at

beginning
with

with

the

of

CPS
levels

and of

operatingreveflues

100%

and

90h
to

forecast

and

without

restructuring requires at the

The

Board

was

referred

prepared
forecasted discussed

materials revenue
the

The 100% of forecast $110000000
and
equity

scenario infusion

giOO000000
of
II

equity

infusion

and

90%
Stark

forecasted analysis rates

revenue
that

The Board
several debt

assumptions debt

additional

models and

of

proposed

note

and

revolver capacities

restructuring the business

levels

assumed

interest

along

with

estimated

carrying

under

plan

COR-EQTY

0014764

A539

Case 1:04-cv-01565-SLR

Document 125

Filed 04/17/2007

Page 7 of 37

Minutes

of

the

Board

of Directors

July31 2000 Page4

STRATEGIC

FIIANC1AL

ALTERMTWES
Deutsche

The Company
options in

requested

Banc

Alex Brown
its

to

analyze
Stark

the

Companys

financial

view

of

the

Companys

inability to

meet

debt

apd

II obligations

Christina alternatives

Monison of Deutsche
to the

Banc
to

Alex

Brown

addressed
capital to

the

Board
the

on

financial equity

available

Company
of

raise the

necessary

obtain the

required

under

Stark

nd

the refinancing

its

current

debt

obligations

under

business

plan

Ms
considered

Morrison by Deutsche

addressed

the

Board

on

the

additional referred to

financing materials to

alternatives previously

that

had been
to the

Banc
led

Alex Brown
discussion included investment with

She
the

provided on

Board
the

Ms..Morrison
raising
rig_s

Board responding
such

their inquiries offering

each

of

capital 2fferi

alternatives sccategic

in her

analyses
thitd

as follow-on

alternatives

and

debt

and

equity

capitaTWreT
discussion regarding

by

party and

The
responded

Board

compared

and

contrasted-

the

options
noted

Christina that
at

Morrison
forecasted

to questions
for

the viability existingdebt capital

of each of
the
its

Ms

Morrison
in the

the

EBITDA
not discussed the

2000
to

and

2001

and

Company
additional

range

of

feasible

raise the

conventional the her

for her

financing

needs

it is S250000000 -Ms Morrison

with

Board on

culmination recent

of

perceptions

of

the

fiiancial
in

markets
seeking

aailable
capital
is

to for

Company

based

experience

and
stated

present the range

experience for the
is

healthcare generally avaiLability

related

companies
times
in

Ms
4-to

Morrison
4.5 times

investment terms bank
are debt

capital stringent
in

small
the

from

two

to

EBITDA
available

and

and

uncertain to 2.5 times

healthcare

The

more

capital

amounts

in the

range

of

EBITDA
considered follow-on equity offering

The Board Morrisons

discussion

and

the

points

raised

in

Ms

prsenta1ion

The
existing

Board

futher for

discussed the

the

possibility

of

rights capital

offering infusion

to

raise requiced

equity for

with Stark

the
II

shareholders $2.00

estimated

SlOO000000

approximately

share

The buyers
auction debt
all

Board

discussed

an

auction

as

an of

alternative potential for

Christina

Morrison
timing

opined

the

limited public

in

this

market

the financial

troubles

buyers

the

requirements existing

of

and

the

uncertainty
this

of anyone
not viable

paying

100% of

equity

with an

5250000000

suggested

was

alternative

The another
generator value as

Board of
the

considered

partial

liquidation

for

ecample
is

selling

the

Hemophilia and growing

business

or

part

Company
and

However
its

Hemophiliac would

performing reduce
-the

and

cash concern

for the

Company

absence

likely

Companys

going

would

other

piecemeal

sales

dr liquidations

COR-EQ1-Y

0O14765

A540

Case 1:04-cv-01565-SLR

Document 125

Filed 04/17/2007

Page 8 of 37

Minutes
July

of

the

Board of

Directors

31 2000

Pages

In
alternatives that

response
available

to

inquiries described

from
in

the

Board

Ms
Banc

Morrison

advised

the

Board
in

on

the

as

her

presentations in

Ms

Morisun

concluded opinion

discussion

none

of the
its

alternatives

were

viable

Deutsche

Alex Browns

The Board
examined meeting

having
the

had

questions options

answered under
Stark

regarding Ii
At.tbis

strategic

financing

alternatives

further the

Companys
ii

time

Ms Morrison was

excusedfrom

STARK

ALTERNATIVES

REORGANIZATION VALII
The Company
advise the

had with
the

asked
respect

Chanin
to its

Capiial

Partners the going the

an

independent value to

financial

advisor

to

Company
requested

opinion of
help

concern value

of

the

Company
by
the

The

Company
interests

evaluation

to

determine

be

realized

various

Eric
materials

Scroggins Board

explained
at

the

materials

provided

to

the

Board

and

he

updated

the

for the

the

meeting

in serial fashion

He
financial projections evolved R-Jlet

discussed

with

the

Board

the

process

foflowed

lathe

valuation

study

and

the

types of

and

operating

information of such and
the

comparative
information various

information that

economic
reviewed

information analyzed

company
Discussion

and

the sources
valuation operations

were

and

regarding
finances

methodologies

The

evaluation

excludes

CPS

and

and

resulting

in estimated

me

rates

for the

two primary

business

lines

therapy and
contrast the

services

and

CTL
cash

The Chanin
flow
analysis arrive lines their
at

representatives public the

addressed

through

comparIson and the

discounted
analysis

company
enterprise

comparable
value

analysis

comparable
million for

functional the

used

to

of approximately described outcomes
the

$207.0 various

Companys
their results

primary

of

business on
the the three

Chanin
valuation valuation and not

methodologies
million evaluation

and

components from of
the the

and

effect

The S207.0
It is

weighted
projected

average

of

methodologies what
the

cashflow
sell

run

rate valuation

go forward with

business

Company
to the

for

Thern

Chanin
the

representatives evaluation

along
the

Mr
its

Friedman

responded

may hoards

questions

regarding

and

process

and

assumptions

COR-EQTY

0014766

A541

Case 1:04-cv-01565-SLR

Document 125

Filed 04/17/2007

Page 9 of 37

Minutes

of the Board

of

Directors

July31 2000

Page6

Following
capacity capacity

discussion

of

valuations the

the interest

Board
rate

inquired

about
tables

the and
for

Companys
the range of

debt
debt

Mr
based

Scroggins upon

addressed

sensitivity as

EBITDA
the

and
debt

EBITDA_CAPEX
load the

projected

2000

and

2001
flture

Discussion income

ensued

regarding

Company

can

meet

from

anticipated

LEGAL RIGBTS RESPONSLBLrrmS
In of
its

AKD ALTERNATIVES
in furtherance outside atlvisors the

privileged

and
advice his

confidential
of.its

communication and
legal

of

the

Boards

evaluation

the

Board requested
with

options
to

and

the

financial

Friedman Friedman

provide

legal further

advise

and

opinions

Following

communication

Mr Mr

the Board

had

discussion

1EBT

cApAcII
Chanin
reiterated
its

analysis ranges

of of

the debe

debt
load

capacity

of

the

Company

DiscussiO.fl

of market and

interest

rates

ensued

and

the

with and

without

amortization

of

principal

the

Companys
legal

capital

needs The

and Board

projected discussed

revolver possible the

requirements ranges
sale

Mr
was

Friedman
for the that

provided remaining
default

of conversion
It

additional

advice
in Series force

S252.0

milli9n

and
involuntary

notes

following

of

CPS

noted

on

the notes

could

an

bankrutcy

RtORGANIZATION

PROCEEDINGS

4ffAND SBAREIIOLDER
Based approxImatelY on $45
balance

VALUE
value debt without contingent by
the liabilities
is

Chanins
million sheet

evaluation less than insolvency

the the

enterprise

S252.0
current

million

owed

Company
three

and

the

Company
3sets

has

with

liabilities

approximately

times

Current

Board members reviewed
shareholders

with

David
the

Friedman
creditors

their

responsibilities

to the

the

Companys
lii

and
in

the

relationship

between

and

shareholders

of

Company
with
legal

Fnedrnan

privileged

and

confidential

communication

p1ovided

the

Board

advice

COR-EQTY

0014767

A542

Case 1:04-cv-01565-SLR

Document 125

Filed 04/17/2007

Page 10 of 37

Minutes

of

the

Board

ofDtCtOrs

Jul3L2OOO Pag7

regarding the

the

righta

of

creditors

and sharehode1S
to the

and

the

CopaY5
Friedman

potential

negotiation

with
existing

debt

holders

regarding

value

shareholders

Mr
the

also

advised

on

the

shareholder group

sPC1AL Mr
Companys
discussed whiclt the

CO
represented

by

Mr Levy

Esq

and

commUniati0nS

he had with

Mr

Levy

Friedman bank
the

proposed

resolution

intended advice

to

create the

spLthal

committee advisors
negotiations

to

review

the

indebtedness
for

based

on the
to

Companys
the
initial

The Board
folibwing

procedure

the committee

proceed

with

following

retolution

was unanimoUslY

approved

WHEREAS
identified capital the necessity to structure

Corarn estrucWre with

Healthcare
its

Corporation indebtedness statute

the

Company
to

has
its

bank
TI

in order

improve

and comply

the

Stark

WHEREAS
of
the

in the

first

instance

it

is

appropriate

for

management
bank

Company to initiate the Bank Group indebtedness
of
acceptable

discussions

with view

the

holders

of

the

Companys

with

towards

achieving

an understanding
the

parameters and
the the

for valuation

restniwling
bpinion

consistent

With

Companys
by Chanin

provided advisor

to the

Company

financial Capital

resources

Partners

LLC

companys

financial

WHEREAS
of
Directors

it

is

appropriate

that

special to

committee review and any
the

of

the

Board

be
or the

appointed

the

Special

Committee

preliminary

agreement
to assess

understanding
overall to are

reached
to

between the
if to

management of any
to

ank

Group
or or

fairness

Company any make

such

agreement agreement
to the

umlerstanding understanding Board of

determine
appropriate

what
and

changes
its

such

entire

recoinmefldation5

Directors

with

respect

thereto Donald

NOW
Peter

THEREFORE
Casey and

BE

IT

RESOLVED

that

Amaral

Smith
to the

William
Special

Sandra

hereby are Smoley be and they

Committee
its

appointed

RESOLVED
functions
financial control the Special legal the

FURTHER
shall to

that

in

performing
access

appointed

Committee
advisors

have such
Special

unrestricted other

io the in the

Companys
custody or or

and of

and
as

information

Company

the

Committee

deems

necessary

appropriate

RESOLVED
back
to the entire the

FURTHER
Directors

that

the

special

Committee of
its

shall

report

Board

of of

ipon
shall

the

completion such

appointed
steps

tasks
as are

whereupon

Board

Directors

consider

additioflil

COR-EQTy

0014768

A543

Case 1:04-cv-01565-SLR

Document 125

Filed 04/17/2007

Page 11 of 37

Minutes

of

the

Board

of Directors

July3l2000 Pagel
with
existing

regarding
the debt

the

iights

of

creditors

and to

shareholders the

and

the

Companys
Friedman

potential also

negotiation

holders

regarding

value by

shareholders

Mr
the

advised

on

the

shareholder group

represented

Mr

Levy Esq and

communications

he had with

Mr

Levy

$PECAL

COM1ffl

EDACT
the

The Board
following

discussed

the

procedure

for

committee

to

proceed

with

the

initial

negotiations

which

the

following

resolution

was unanimously

approved.

WHEREAS
identifled capital the necessity to structure

Coram Healthcare
restructure
its

Corporation indebtedness statute

the
in

Company
to

has
its

bank
11

order

improve

and

comjaly

with

the

Stark

WHEREAS
of
the

In

the

first

instance with view
the

it

is

appropriate

for

management
bank

Company

to

initiate

discussions

holders

of

the

Companys

indebtedness

the Bank

Group
for

with

towards

achieving

an understanding
the

of

acceptable

parameters and the

estmctUdflg

consistent to the

with

Companys
by Chanin

valuation

opinion provided
financial

Company

financial Capital

resources

Partners

LLC

the

companys

advisor Board

WHEREAS
of
Directors

it

is

appropriate

that

special to

committee review and any
the

of

the

be
or the

appointed

the

Special

Committee

preliminarY

Bank

agreement
to assess

understanding
overall to are

reached
to

between
the if to

management of any
to

Group
or or

fairness

Company any make

such
such

agreement agreement
to the

understanding understanding Board of

determine
appropriate witl respect

what
and

changes
its

recommendations

entire

Directors

thereto Donald
they

NOW
Peter Smith appointed
to the

THEREFORE BE
Casey

IT

R.ESOL\ED
Smoley

that

Amaral
hereby are

William
Special

and SandraL

be

and

Committee

RESOLVED
functions
financial control the SpeciaL legal the

FURTHER
shall to the

that

in performing
access to
in

its

appointed

the the

Committee
advisors

have such
Special

unrestricted other

Companys
custody
or or

aid of

and
as

information

Company

Committee

deems

necessarY

appropriate

RESOLVED FURTHER
back
to

that

the

special

Committee of
its

shall

report

the

entire the

Board

of of

Directors

upon
shall

the

completion such

appointed steps

tasks
as are

whereupon

Board

Directors

considef

additional

COR-EQTY

0014766

A544

Case 1:04-cv-01565-SLR

Document 125

Filed 04/17/2007

Page 12 of 37

nutes.of

the

Board

ofDireCtOrS

July31 2000 PageS

necessary

or

appropriate

to

implement

restructuring

of

the

Companys

bank

indebtedness

QA1 REDACTEC
The
discussion unanimously
holders insolvency to consider cash agreed to cause in the

Board

accepted

this

recommendatiOn

and
principal despite that

after debt the arise

Company

to request

the to

Companys
shareholders dispute

payment
in order

some reasoanbie
quickly

amount

the

of

the

Company

to resolve

and

efficiently

any

may

with

the

shareholders

ENTION
Mr
employees

OF

ELOES
discussed the the necessity facing that the

of
the

Crowley
during

retaining

and

motivating

management
also considered

and

uncertainties

Company
enter into

The

Board

recommendation

from

Mr

Crowley
also

Company
the

an employment
retention

agreement
plan

with

Mr
the that

Danitz proposed

Mr

Crowley and

discussed

with

Board
outside

management
Directors

along

with

terms

suggested should

participants

The

were would

also

of

the

consensus
the action

retention

bonus

be

considered

fo Mr

Crowley

and

consider

further

The approved
the

Board

following

its

discussion

and

its

questions

being

answered

unanimously

following

resolution

RESOLVED
that
it

Ihat

the

Board of

of
the

Directors

of
to

the

Company
into

hereby

deems

is

in

the

best
its

interests

Company

enter

an

Employment
Officer

Agreement
Scott

with

Senior

Vice President

Fmance and Chief Accounting

Danitz Chief Executive
Senior Officer

and
the

FURTHER
President the

RESOLVED
Vice

that

the

Chairman
or

Executive

President are

any

Vice

President

of

Company
and

the Authorized
to negotiate

Officers

each

hereby
as

authorized
the act

empowered
deed of
the

directed

make

execute

and

deliver the

and
Scott

Company
incorporating other terms

an employment
the principal conditions

agreement
terms as set

between
forth

Company
hereto Offlcer

am

Danitz with such necessarY

on Exhibitb Authorized

together

and

any

such

deems

appropriate

or expedient

for

such

employment

agreement

COREQTY

0014769

A545

Case 1:04-cv-01565-SLR

Document 125

Filed 04/17/2007

Page 13 of 37

Minutes July31 Page

of

the

Board of

Directors

2000

FURTHER
authorized
deliver

RESOLVED
and

that

the to

AuthOriZed prepare documents

Officers

are

each

hereby and be
the

empowered

directed

negotiate or issuance
listed

make
agrcements and

execute
as

on behalf of the Company
appropriate in

such

may
of
hereto

necessary

or

expedient

cause to
the

the

payment

Stay Bonuses
the principal

such

amounts

and

persons and

on

Exhibit

on

terms described

on such

hibitA

FURTHER RESOLVED
authorized
the act

that

the

Authorized
negotiate

Officers

are

each and

hereby
as

empowered
deed
as

and

directed

to prepare such
other

execute

deliver

and

of

the

Company
necessary
at
this

documefltS or
expedient

certifliates to effect

motions
the intent

or oF

agreements
all

may be
adopted

appropriate

resolutiOns

meeting

OTRRJJSh1ESS
There being no
further

busiress

the

meeLin was adjourned

RespecttilllY

A.
submitted Allen J.MarabLtO

ecretayoftheMceg

COR-.EQTY

0014770

A546

Case 1:04-cv-01565-SLR

Document 125

Filed 04/17/2007

Page 14 of 37

F.XIIBITA

ALCOEIP
To r iden0r
rtainty that Coraxa

He

hcare of
the
is

will

have

management

both

in

any CompanY
offered

place ana proper1

focused
the

on

the

business

1cwæng pmceedin
Compro1

jowing

proposal

contraCW

comeflt
Tifl

as

follows

Is
one1 year contract wjthonelYe3rsPa
change
year eff 8-1

al

Scott

Cef Accountant

of control

one

Severance

if tenned for sale

wlo

rsn

$200000

bouuS

alloWaflC S900 month car

Bonus toram 1ovid Stay
but

with
not

50%

paid

on

successful

emergence

from
the

earlier

than

Dacembr

31 200 nd

any

resnnMifl8

icarninging

paid

to those at

of2001 Bonus business day 50% paid on th last day employed by succes5filY who listed who remain
the

proceeiflg

would onl be
are

Cor and

acvelY

wo on

de

of payment

50%
jfle

IL
S150.000

MaabitOAlk
DanhtZ
Scott

Eec.VP
Chief AcCt

S75000 S50000 $40000 $25000 S40000 S40000 $40000 S40000 S40000 S40000 S25000 $25000 $15000

$100000 80000 50000 80000 80000 80000 80000 80000 80000 50000 50000 30000

pozio Geige Meyer
Sarraco
Ellis

Vito
Fraxilc

SVPHumanc
Prchasing

Debbie Micael

SVP SVP

Field

Sales

Spec
tIps tIps

rods East

John Richard Kate

AVP AVP

West
Svcs

læye

DonZlaSS H111EIiC Reynolds Wright

VP

Cliæcial

VPHemOPlltba
Gerald

VpCont10l

Rodney
John

VP Collections
VPTeasWer

Mcintyre

COR-EQTY

0014771

A547

Case 1:04-cv-01565-SLR

Document 125

Filed 04/17/2007

Page 15 of 37

DkectOTan
SlvoæJoe SOtt MocILer
Scbott

S15000
SI

30000

5000

3000g
30000

DjrectorT

Ale
Beth

DirCCtO0m151OO

Jaw

Rg
Winnie

Sales $ale3

S15000

30000 30000 30000

i50D0
$15000 $15000 $15000 $15000 $15000
SI

SOlOW5k1

ThomnsE11een
Voflmer Dennis Craig Debbie

pRgn1S3
VP RgI Sales VP RgnlSaie5
Mgd Mgd Mgd Mgd Mgd

30.000

30000
-5

JunicejaYfle poillon

VPRS
Care cons3lt

30P0

3000
30000 30000 30000 30000 30000 30000 20000

Ru
Johnson Turner

Roy
Janet

Ce Cofllt
Care Caje consult

5000

Sl500
S15000 S15000 S15000 Si5000
10.000

Lisa

ConUIt

Tumble Angela
Susan

Care ConSOlt

VPRSI1IOPS Andrew
Melissa

LampartCax.I

DePalfl

VP Rgnl
Mgr Mgr

Ops

CoUeC0flS

Nechafllktf

Sl0000
Collections Collections

20000

Velella Angela Mater
Chris

Mgr

iQQ0O

200o

ooo5300O0
Other Chairmen

CEO

pres

NA
myself

NA
leave that

CrowleY Dan

NOTE
rnaUer

iamnotmn1
upto

commendation

ror

Bod

fok

its

conside0

any

areflJ

am rewaded

solely

thEB1ThA wc.b
proeediflg

0U

EBA
earn

do

no

to
That sald
as

my

oside0
Agment
follows

the

impa
the

of
is

Ban1PtCY
thatl

uith

Board

have

th

opporlo

BoUSe3

oflg
25% of

for the

EB1A beloW
EBTTDA
Bonus
above
if

EBITDA
of
The or

Sl4Mi0fl S35MIIIIOUEBTTDA at $I41li0a and capped S35Mi1lio is abovc of the eater
one
of

$SMilliOfl

one and

half the

%%

percent aJier

bonus
after

esg
equity

rsC

uring the

1%

percent

on
the

e..if

debt

remag afte
closg
post

reC
or
for

debt

remU11$
is

Sl5OMi1Ii0fl

would

receive for

$l.5MiUi0n.8t

2001

oflg

remflZaS

COR-EQTY

0014772

A548

Case 1:04-cv-01565-SLR

Document 125

Filed 04/17/2007

Page 16 of 37

MItfJTJS

OFA ThLEPIEONjc MEETING
OF

OF TE BOARD OF DIRECTORS
COItAM

BFALTRCARE CORPORATION
August
20.00

telephonic

meeting
at

of the Board

of Directors

of

Coram
in

Healthcare

Company
Iirectors

was

convene4

305 p.m

MDT
and

Corporation

the

Participating

the meeting

were

the

foIlowiig President absent

Daniel

Crowley
William

Chairman of the Board Casey
Sandra

Chief Executive

Officer

and

Donald

Amaral

Smoley
Executive Officer

Peter

Smith

was

Participating Senior

telephonically

were Allen
and

Marabito

Vice Presideiit
and Scott

Scott

Danit
of

Vice President
General

Finance and

Chief Accounting Robert

Larson Senior Vice and Russ
Bellnsky

PresIdent

Ccuithl

Secretary.

Stobo Eric Scroggins
and

Chanin Capital Partners and

David Friedman
in

Esq

Adam

Shiff

Tones

Esq of Kasowitz Benson
as

Friedman LLP alsoparticipated

the meetihg

Mr

meetingand

Mr
first

Crowley acted

Chafrman

of the

Larson kept

the

minutes

The

item of business was hereto that
that
all

review
distributed

an4
to

discussion
the

of the proposed of Directors

resolutions

set

forth on Exhibit
It

had

been

oard

prior to

the meeting proposed had

was

confirmed and
at

of the

members

of

the

Beard had received
and
discibsure

copies statement

of the
that

resolutions discussed

the

proposed

plan

of reorganization

been

the AugUst

2000

meeting.

David Friedman was
discussion

invited

to disCuss
incjuirLd

and

explain

each of the proposed Amaral
July 3.1 or any

resolutions.

Prior to such

Mr

Crowley

whether
at

Mr
the

of the other members
meeting of the

of the pecial
of Diretors debt

committee

that

had been

established

200O
the
as

Board

Committee
to
provide

had reeivØd
value
that to the

ahy

word

regarding

Committees

request

for the

holders

Companys

stockholders received

partof the plan of reorganization

Mr

Amaral confirmed

no word had been

by the Commnittee

an extension of the management retntion notion was made to approve program bonus for Mr. Crowley fifty percent of which would be paid on December 31 2000 and fifty percent of which.be December 31 2001 The total amount of the bonus would paid on be $800000 Chanin Capital Partners having opined that the bonu.s amount was reasonable After the motion was seconded and after Messrs Amaral and Casey and Ms Smoley discussion voted in favor of bonus for Mr Crowley providing such Mr Crowley abstained from the voting retention

As

Mr
explanation
set

Friedman

then

proceedel
resolutions

with

privileged

and

confidential

of the proposed

nd

summary
resolutions

and
is

plan of reorganization
that to
if

forth on Exhibit

hereto

Mr

copy of such

Friedman explained
counsel

the resolutions

were adopted
court
file

that

he and members and
as
it

of his firm and
and

local

would go

the bankruptcy

the

petition 11

first

day motions

otherwise
this

take the actions

necessary to

commence
regarding

the Chapter the contents

case

has been discussed with

Board

discussion

occurred

of the

TRUSTU00945
04-1

A549

Case 1:04-cv-01565-SLR

Document 125

Filed 04/17/2007

Page 17 of 37

Miiiutesof

the Board of Directors

August

2O00

Page2

first

day

motion
that

the related

press

release

the debtor ii possession financin agreement
It

and

the

time frathe without

was

ºxpected.for the day-to-day

these matters operations

was

alsc

stated

that

th

filings

should

occur

interrupt3hg

of the Cohipany

subsidiries

discussio
officers liability

enuedrearding among
would remain
in in

other things

whether

the

Companys
that

directors

and such
in

coverage
reniailt

force

Mr Fnedman
that

responded

he

believed

coverage time to

would

force

He

also

confirmed

the necessary papers would be ready
thotion

CQmmenoe
set fptth

the filing on the following

day

Upon
adopted

duly made

and

seconded

the

resolutions

on Exhibit Awere unanimously

and

cotifirmed

Mr
explailied

Friedman confirmed
tqcaUse
release

that

with the

adoption
in

of

suh

resolutions

he

would make the

necessary arrangementS
thtt

the filing to

be made

Delaware day The
the

on the following
text

day

It

was was

press

would be issuedon
discussion

such

of the press
release

release

eviewed
approved

by the Board by the Board

After

and questions

press

was

unathmousy

There

no

futther

business

the meeting

was

adjourned

at

approximately

415 p.m

MDT
Respectftilly

submitted

ScottT

Larson

Secretary of the Meeting

TRUSTEILOO94S2 USIJC-DE 04-1565

A550

Case 1:04-cv-01565-SLR

Document 125

Filed 04/17/2007

Page 18 of 37

EXHIIBITA

RESOLVED that
the best
interest that

in

the it

cigmet
creditors

of the Board ofDirectors stockhlders
relief

it

is.deirable and

in

of this

Cpmpany
filed

ethployees under
is

and

other interested of chapter

parties
Title

petition Sthtes

be

by the Company seeking
3ankruptcy

the provisions

11

11

United

Code the
that

Code
of the

and

it

thrther

RESO.LVEI
is authorized
petition to

the Officers

Company be
the

and

eabh one

of them iereby and
verify

and directed
chapter

behalf

of and

hi the

name of
in

Company

to execote
to

under

11 of the Bankruptcy
States petition

Code

such

appropriate
District shall

form and

cause the
at
it

same

be

fRed

with

the tJnited
said

Bankruptcy Court on behalf of
this

for the

ofDelaware

such

time as

the Officerexecuting

Company

determine and

s.ftirthor

R1iSQLVED
.1301

that

the law firms of

Kasowit Benson
and

Torres

Friedntan

LLP

Avenue

of the Americas

New York New
Streeti Suite retainers

York 10019 16QQ

Pachulaid

Stang Ziehi Young
19801

Jones P.C. 919 NQrth Market
hereby the
final

Wilmington
for

1e1awar

be
case

aid they with

are

employed

under

geiieval

as attorpeys

the Conip any in connection of the chapter
ii

preparation

of the petition the commencement
and in
all

nd
and
it

pursuit
is

through

determination

related

proceedings

further

RESOLVED
Street
special

that

the law

firm of Reed
it

Smith Shaw
is

MaClay
under in
all

LLP

1301
as

N.W
ftirther

Washington

regulatory cOunsel

D.C 20005 be and fr the Company in

hereby

employed
11 case and

gerial
related

retainer

the chapter

proceedings

and

it is

EESOLVED
Monica

thai

the consulting firm of Chanin Capital Partners

11100
as

Santa

Blvd
for

Suite 830 Los the

Angeles
in

CA

90025 be and
11 case and

it

hereby
all

is

employed

financial

consultants
further

Company

tue chapter

in

related

proceedings

and

it

is

RESOLVED
Company
Associates

that

the

communications

consulting

firms

Gavin Anderson

220 East 42nd Street 1850
Street

New York New York10017 and Chiopak Leonard Schehter NW Suite 550 Washington D.C 20036 be and they hereby are
as

employed
chapter
11

under

general
all

retainer

communications consultants and
it is

for the

Company

in

the

case and in

related

proceedings

further

RESOLVED
Americas

that

the accounting

firm Ernst
it

Young
is

LLP
as

1285

Aventie

of the
for the

New York New
in

York

10036
in
all

be

and

hereby

employed
and
it is

accountants

Company

the chapter

ii case and

related

proceedings

further

RESOLVED
Of them
hereby is applications in-possession
retain
all

that

the Officers to
execi.ite for

of this

Company
all

or any

one

of them

be

and

each
lists

authorized

and

file

petitions

schedules
as

motions
and

pleadings

and other papers
11

and

on behalf of the Company

debtor
to

debtor-

under chapter by
legal

of the Bankruptcy accountants
in

Code
or other

anclin that
professionals

connection

employ and
and
all

assistance

counsel

and

to

take any with

action which they deem

necessary and proper

connection

with the chapter

11 case

view

TRUSTEEOO9483

USDC-DE

04-1565

A551

Case 1:04-cv-01565-SLR

Document 125

Filed 04/17/2007

Page 19 of 37

to

the appropriate

puisuit

and

conclusion and
it

such

case

their

authority

thereunto

to

be

evidenced

by th9 taking

of such

actions

is

further

RESOLV1FD
chapter such 11 of the Bankruptcy

that

the

Company be
and

as

debtor

and

debtor-in-possession
to

under
in

Code
and

shall

hereby as

is authorized approved of the

borrow funds
or more

amounts
as

from such
reasonably

lenders

on such
for

terms

may be
conduct
into

by any one
affairs in

of

the Officers

neessary
such

the

continuing
to enter to

of the

Company
with any
as

Ii
such

to

open

and.maintaiii

bank accowits

agreemcnt

connection

bank

Æccouiits

and

to

effect

funds transfers

and
as

withdrawals

from any such
to
all

accounts

may be

approved

by any one

or more Of the Officers
to

teasoiibly .necssary
in

the onduct

of

the affairs of the
all

Cpmp

any

and
as

grant security be

interests

and

liens

upon

or substantially

of the Companys
in

assets .with

may

deemed

reasonably

necessary by any one Or more of the with obtaining authority
to

Officers cpllateral

connection

such and
it

borrowings
is

or in connection

use

cash

or otherwise

further

RESOLVED that
and the

the Officers
certitr
file

shall

be and
record under

each and

of them hereby

is authorized

empowered

to as

execute dthtor

deliver and

and/or

perform
11

for

and

on behalf

of

Company

debto-in-possOssion
affidavits

chapter

of the Bankruptcy and
all

Code

agreements
necessary

insttuments

motions
to

applications

and any

other

do.cumnts
resolution

or appropriate

facilitate

the transactiOns Financing

contemplated

by the fOregoing
such

the Financing
conditions appropriate
itisfijrther

DOcument
the

and

that

Documents
as

.contahing be

provisions

ternis or and

covenants

warranties and
dfficers

represegtations

may

deemed
aie

reasonable

necessary

by

Offieror

so acting

be and

hereby

authorized

and approved

RESOLVED that
filed

the

Officers

are hereby
for

authorized

to execute
in

and to cause
the

to

the

Plan

of Reorganization

the

Plan
any

the

COmiiany
Disclosure

substantiafly

form
all

presented necessary

to thO Board of Directors
ancillary

together with including

related

Statement

and any and

documents
and
to

and
to

all

modificatiOng Bankruptcy and

supplements Court approval

and of

amendments

thereto

take

all

appropriate of the

actions

obtain

the Plan and the successful

conclusion

Companys

reorganization

itis further

RESOLVED
directors
all

that

any

and of and

all

past

actions

heretofore taken
in

by

officers

and

of the Company

in

the name or

on behalf
contemplated

of the Company
thereby

furtherance the

of any or
are

of the preceding
confirmed

resolutions

actions

be

and

sam6

hereby

ratified

and

approved

TR1JSTE0094S4

USDC-D

04-1565

A552

Case 1:04-cv-01565-SLR

Document 125

Filed 04/17/2007

Page 20 of 37

ACCEPTANCES OR OR REJECTION OF THE PLAN STATEMENT HAS BEEN APPROVED BY THE BANKRUPTCY COURT THIS DISCLOSURE STATEMENT IS BEING SUBMITTED FOR APPROVAL BUTHASNOT BEEN APPROVED BY THE COURT ALL INFORMATION HEREIN is SUBJECT TO CHANGE AND SHOULD NOT INVESTMENT OR BE RELIED UPON IN MAKING ANY OTllF4 DECISION
THIS
IS

NOT

SOLICITATION
ElK

OF

ACCEPTANCE
UNTIL

REJECTIONS

MAY NOT

SOLICITED

DISCLOSURE

ml THE UNITED

STATES BANKRUPTCY
DISTRICT

COURT

FOR
hire

TI-IE

OF DELAWARE
CD

CORAM HEALTHCARE CORP
CORAMllIC

and

Chapter 11

Case Debtors

Nos O0-_

through 00-

Jointly

Administered

PURSUANT TO DISCLOSURE STATEMENT CODE SECTION 1125 OF THE IIANKRUPTCY

KASOWITZ BENSON TORRES
FRIEDMAN
David

LLP

Friedman
Shiff

Adam
Robert
1301

Novick
the

Avenue of

Americas 10019

New York New
212506-1700

York

EXHIBIT

arid

5LtLI

___________

PACHULSKI

STANG ZIEHL
Jones
Street Suite

YOUNG
Laura Davis

JONES P.C
1600

919 North Market Wilmington

Delaware

19801

302652-4100

CO-COUNSEL TO DEBTORS AND
DEBTORS-IN-POSSESSION

2r

A553

Case 1:04-cv-01565-SLR

Document 125

Filed 04/17/2007

Page 21 of 37

Executive

Officer

LetterlRecommeridationj

Company
2000

August

To

the Creditors

of Coram Healthcare

Corporation

and

Coram

Inc

We

are pleased

to

report

that

Corarn Healtheare
are enthusiastically the

Corporation

Coram
their joint

CHC
to
solicit

and

Coram

Inc of

together
plan

the

Debtors

prepared

your acceptance

of reorganization

under which only months

Debtors will emerge from their bankruptcy
reorganization current plan

cases

which

were

commenced

ago The proposed by

which
is

will lead to the cancellation

of the equity and

interests held negotiations

CHCs
is that

shareholders
full

the

product of many Debtors

hours of hard work
the

and

presented

with the

support

of the

largest creditors will

Noteholder Group
to

We

believe

the enclosed
11

Plan of
strong

Reorganization and provide the
strongly

form the basis for Corain

emerge from chapter
for creditors

as

company
Therefore

maximum recovery
to

and distribution of the Plan

of

CHC

and

Coram

we

urge you

vote

in

favor

of Reorganization

The

following

documents

are contained

in

the attached

materials

the

Debtors

Joint

Plan of Reorganization

Pursuant

to

Chapter

11

of the

Bankruptcy

Code the

Plan
respect Plan

the Disclosure

Statement with

the Disclosure

Statement

notice hearing States

providing
at

information Eastern

regarding

Plan

__

voting

and

announcing
in the

the

Time on _____________2000
District

United

Bankruptcy
to

Court for the
confirmation

of Delaware

the Bankruptcy

Court

consider

of the Plan and

for the creditors

entitled

to

vote

on the Plan

ballot

and

return

envelope

As
result believe various

noted above the Plan
negotiations

is

supported the

by the Debtors

largest

Creditors

The

Plan

is

the

of extensive
that the

among

Debtors and the Noteholder Group and appropriate of
all

The Debtors

Plan represents and
will

fair reasonable

resolution

of issues among the

constituencies

maximize

recoveries

stakeholders

The
federal equity

overall

purposes
so
that

of the Plan
ii

are

to

cause
its

Coram
core the

to

remain

in

compliance

with public

the

Stark II law
holders

can

lawfully

maintain

businesses

by eliminating balance
sheets
to

who may be
their

referring chapter
to Il

physicians
cases with

alter

Debtors

permit the

them
value

to

emerge from

enhanced on
fair

financial

strength

maximize

of the ultimate

recoveries dispose

all

stalceholders claims

and and

equitable
interests

basis and
in

settle

compromise or

otherwise

of certain

against

he

Debtors

As

A554

Case 1:04-cv-01565-SLR

Document 125

Filed 04/17/2007

Page 22 of 37

described

in

detail

in the Disclosure

Statement the Debtors
and
in

believe

that

this

course
estates

of action and

is

necessary reasonable appropriate
creditors

the best

interests

of

their

respective

THAT THE PLAN IS IN THE BEST INTERESTS OF CREDITORS AN OTHER STAKEHOLDERS ALL CREDITORS ENTITLED TO VOTE ON THE PLAN ARE URGED TO VOTE TO ACCEPT THE PLAN BY RETURNING BALLOTS IN ACCORDANCE WITH THE BALLOT INSTRUCTIONS CREDiTORS COMMITIEE HAS INDEPENDENTLY CONCLUDED THE THAT PLAN IS THE BEST INTERESTS OF THEIR RESPECTIVE CONSTITUENCIES AN HAS CONSENTED TO THE TERMS OF THE PLAN
THE OF THE DEBTORS
BELIEVES
For further information
Disclosure well as the Statement concerning the

MANAGEMENT

Plan you are encouraged
the

to

read

carefully the

which

was approved by
also should read

Bankruptcy

Court on __________
attached to the enclosed If

2000
ballad

as
for

Plan

itself

You
the

the instructions

information questions

regarding regarding

proper

completion

and submission
call

of

ballot

you have

any and

voting

procedures you may

the

Debtors balloting

agent

phone

number of

balloting

agent

PLEASE NOTE THAT TO BE COUNTED YOUR BALLOT MUST BE ACTUALLY 2000 OR SUCH RECEIVED NO LATER THAN 500 P.M EASTERN TIME ON OTHER DATE AND TIME THAT ARE IDENTIHJD ON YOUR BALLOT WE URGE YOU TO READ THE BALLOT INSTRUCTIONS CAREFULLY BEFORE VOTING

Sincerely

yours

DanielD.Crowley Chairman
President Corani

of the Board Chief Executive and
Director

Officer

Healthcare

Corp

A555

Case 1:04-cv-01565-SLR

Document 125

Filed 04/17/2007

Page 23 of 37

Table

of

Contents

A556

Case 1:04-cv-01565-SLR

Document 125

Filed 04/17/2007

Page 24 of 37

DiSCLOSURE STATEMENT DATED AUGUST
Solicitation of

2000

Votes

with Respect

to

the

Joint

Plan of Reorganization

of

CORAM

IIEALTIICARE CORPORATION

CORAM INC

THE UNITED STATES

BANKRUPTCY

COURT

HAVING

JURISDICTION

COURT FOR THE OVER THE CHAPTER

DISTUJCT
II

CASES

OF DELAWARE THE BANKRUPTCY OF CORAM HEALTHCARE

AND CORAM INC COLLECTIVELY THE DEBTORS HAS ESTABLISHED AS THE DATE OF THE HEARING AT WHICH THE BANKRUPTCY 2000J cOURT WILL HEAR UNITED STATES CODE THE THE DEBTORS REQUEST PURSUANT TO SECTION 1125 OF TITLE BANKRUPTCY CODE TO APPROVE THIS DJSCLOSURE STATEMENT PRIOR TO THE HEARiNG SEEKING APPROVAL OF THIS DISCLOSURE THERETO AS AUTHORIZED STATEMENT OR SUBSEQUENT BY Th2BANKRUPTCYCOURTTHEDEBTORS MAY ALTER AMEND OR SUPPLEMENT1HIS DISCLOSURE STATEMENT ONE OR MORE TIMES WITHOUT FURTHER NOTICE EXCEPT AS REQUIRED BY TUE BANKRUPTCY CODE OR THE BANKRUPTCY COURT CORPORATION
ISEPTEMBER

ITHIS

DISCLOSURE
O1l

ENTERED

MEANING

BY ORDER OF TIlE BANKRUPTCY COURT STATEMENT HAS BEEN APPROVED INFORMATION WiTHIN THE ISEPTEMBER 2000 AS CONTAINING ADEQUATE OF.SECTION 1125 OF TIlE BANKRUPTCY CODE FOR USE IN THE SOLICITATION OF

ON THE JOINT PLAN OF REORGANIZATION THE PLAN THE BANKRUPTCY COuRTS STATEMENT DOES NOT HOWEVER INDICATE THAT THE APPROVAL OF TIlE DISCLOSURE OR REJECTION OF TIlE PLAN OR OF ANY BANKRUPTCY COURT RECOMMENDS EITHER ACCEPTANCE TIlE BANKRUPTCY COURT HAS DETERMINED ONLY THAT THE DISCLOSURE ALTERNATIVE THERETO STATEMENT CONTAINS ADEQUATE INFORMATION TO PERMIT VOTING HOLDERS OF ALLOWED AS TO WHETHER TO ACCEPT OR REJECT THE PLAN THE CLAIMS TO MAKE AN INFORMED J1JDGMENT BANKRUPTCY COURT HAS SET AT 500 P.M NEW YORK TIME TIlE VOTING DEADLINE AS _2000 THE DEADLINE FOR VOTING ON THE PLAN FOR DESCRIPTION OF VOTING PROCEDURES SEE OF THE PLAN VOTING PROCEDURES AND REQUIREMENTS THE VOTING AND CONFIRMATION 2000 AT .M AS THE TIME AND DATE FOR TUE HEARING ON BANKRUPTCY COURT HAS SET HEARING MAY BE ADJOURNED FROM TIME TO CONFIRMATION OF THE PLAN THE CONFIRMATION IN OPEN COURT TIME WITHOUT FURTHER NOTICE OTHER THAN AS PROViDED
ACCEPTANCES

THIS DISCLOSURE

DOCUMENT

ATFACIIED HERETO IS THE ONLY STATEMENT INCLUDING THE EXHIBITS WITH THE AUTHORIZED BY TIlE BANKRUPTCY COURT TO BE USED IN CONNECTION OF VOTES ON THE PLAN MOST STATEMENTS AND FINANCIAL iNFORMATION HEREIN SOLICITATION FROM DOCUMENTS AND INFORMATION PREPARED ABOUT THE DEBTORS HAVE BEEN OBTAINED BY OR ON BEHALF OF THE DEBTORS THE STATEMENTS CONTAiNED IN TIllS DISCLOSURE STATEMENT ARE

A557

Case 1:04-cv-01565-SLR

Document 125

Filed 04/17/2007

Page 25 of 37

MADE AS OF THE DATE HEREOF.UNLESS ANOTHER TIME IS SPECIFIED THE DELIVERY OR FILING OF THIS DISCLOSURE STATEMENT SHALL UNDER NO CIRCUMSTANCES CONSTITUTE REPRESENTATION THAT THERE HAS BEEN NO CHANGE IN THE INFORMATION SET FORTH HEREJN SINCE THE DATE OF OF THIS DISCLOSURE STATEMENT AND THE MATERIALS RELIED UPON IN COMPLATION PREPARATION OF THIS DISCLOSURE STATEMENT NOTHING CONTAINED IN THIS DISCLOSURE STATEMENT SHALL CONSTITUTE AN ADMISSION OF ANY FACT OR LIABILITY BY ANY PARTY BE ADMISSIBLE IN ANY PROCEEDING INVOLVING THE DEBTORS OR ANY OTHER PARTY OR lIE DEEMED CONCLUSIVE EVIDENCE OF TIlE TAX OR OTHER LEGAL EFFECTS OF THE REORGANIZATION OF THE DEBTORS UNDER THE PLAN

NO PERSON IS AUTHORIZED BY THE DEBTORS IN CONNECTiON WITH THE PLAN OR THE SOLICITATION OF VOTES FOR THE PLAN TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION OTHER STATEMENT AND THE EXHIBITS ATTACHED HERETO IF THAN AS CONTAINED iN THIS DISCLOSURE ANY SUCH INFORMATION OR REPRESENTATIONS ARE GWEN OR MADE THEY MAY NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE DEBTORS WHILE THE DEBTORS WILL FURNISH TO CREDITORS ENTITLED TO VOTE ON ACCEPTANCE OF TilE PLAN ANY SUCH ADDITIONAL INFORMATION LAW OR BY THE BANKRUPTCY COURT PRIOR TO THE VOTING AS MAY liE REQUIRED BY APPLICABLE STATEMENT SHALL NOT UNDER ANY DEADLINE THE DELIVERY OF THIS DISCLOSURE IMPLY THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT CIRCUMSTANCES HEREOF TOTI-JEDATE

THIS DISCLOSURE STATEMENT HAS NOT BEEN APPROVED OR DISAPPROVED BY TUE SECURITIES AND NOR HAS THE COMMISSION EXCHANGE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THE STATEMENTS CONTAINED HEREIN

A558

Case 1:04-cv-01565-SLR

Document 125

Filed 04/17/2007

Page 26 of 37

iNTRODUCTION
Coram Inc
Delaware
the Healthcare

Corporation

Delaware

corporation debtors

CHC
pursuant terms

and

Coram

Corporation

Coram
jointly

the above-captioned
this

and debtors-in-possession
to section

collectively

DDebtorsI

snbmit

Disclosure

Statement

1125

of the Bankruptcy
additional

Code

This Disclosure
with

Statement

describes

the material

of and provides
dated
as

important

information

respect to the Joint Plan of Reorganization

as

of

August
Exhibit

200

the

Plan

copy

of

which

is

attached

to

this

Disclosure

Statement

The Debtors urge
Disclosure not include Statement

all

voting

creditors

and other parties-in-interest
entirety

to

read

this

and

the

Plan carefully and and every by the
term

in their

This Disclosure

Statement

does

description
is

of each
qualified

of the Plan

Accordingly
is

the description

of the

Plan
into

set this

forth herein Disclosure

entirety

of the Plan which

incorporated

by reference

Statement

All capitalized defined herein

terms

used

in

this

Disclosure
in

Statement

that

are not otherwise

have

the

meanings

ascribed

to

them

the

Plan

What

is

Chapter

11
is

Chapter

11

the principal

reorganization

chapter
in

of the Federal Bankruptcy which
their to

Code
and
to

Under review

Chapter
their

11

the

Debtors are permitted
in

period
to

organize

their

affairs

assets Chapter

and obligations
11 cases

order

reorganize

businesses
for
relief

The Debtors
under

commenced
11

their

on

August

2000

by

filing

petitions

Chapter

with

the

Bankruptcy

Court

The
the

commencement

of the

Debtors Chapter

Il

cases

triggered automatic

the application stay halts

of

automatic

stay under section
all

362

of the Bankruptcy
to collect

Code

The

with or

certain

exceptions substantially
to

attempts the

pre-petition

claims

from the Debtors

attempts

otherwise

interfere with

Debtors property

What

is

Plan of Reorganization

The
of reorganization

principal

purpose

of

Chapter

11

case of

is

to permit

the formulation and such

of

plan
if

which

provides

for the restructuring Plan

debtors

liabilities that

the treatment restructuring

any of
will

its

equity

interests

The

proposed

by the Debtors provides

be accomplished

principally

through

the elimination cash
to

of existing equity

interests

and the

issuance

of new equity

new

secured

notes and

the

Debtors unsecured

non-priority

A559

Case 1:04-cv-01565-SLR

Document 125

Filed 04/17/2007

Page 27 of 37

creditors

For

discussion Pursuant

of the new equity

to

be issued pursuant to the Plan see

New

Coram

Stock To Be Issued

To The Plan

The Plan proposed
Confirmation
subsidiaries regulatory regulatory
arid

by

the

Debtors further provides

among
its

other

things that

after

consummation be able
that to

of the Plan Reorganized
their their

Coram and

non-debtor operating
indebtedness

shall

operate

businesses petitions

free

from the excessive For

and

concerns
factors

necessitated

for relief

discussion see

of the key of Stark
II

bearing

on the viability of the Debtors

business

Discussion

Issues

What

is

Disclosure

Statement

After equity interests

plan

of reorganization
that

has

been proposed
the

the holders

of claims
that

against

or

in

the debtors

are

impaired by

terms of the plan and

are to receive
to

distributions

in cash

or securities

under the plan are entitled to vote
disclosure of the

on whether
to all

accept

the

plan

The Bankruptcy
and
equity

Code
holders

requires

of adequate

information

such voting
the plan

creditors

byway
votes-

court-approved

disclosure statement

before
that

proponents
statement practicable

may solicit
contain
in

any

on

plan kind

The

Bankruptcy

Code

provides as
far

disclosure reasonably

must

information of

and in sufficient and

detail

as

is

light

of the nature and
enable class
to

history of the debtor reasonable

the condition typical the

of the debtors books of claims
or

and records
interests

that

would

hypothetical

investor about

of holders

of the relevant

make an informed judgment

plan
holders

The Debtors
Claims against Code
an the

present
in

this to

Disclosure

Statement

to

the voting

of Allowed

Debtors

order

satisfy the disclosure

requirements with sufficient

of the Bankruptcy
information
to

by providing each
as

voting
to

holder
to

of an Allowed
accept or
reject

Claim
the

make

informed decision

whether

Plan

How

Does

One Vote
Allowed
that

Only persons
impaired to

holding

Claims as
receive except

defined

in the

Plan

in

Classes are
entitled

under

the terms the

of the Plan
afl

are

to

distribution Classes

under

the Plan

vote

Under

Plan

Classes

are impaired

CRC

CHC
Coram

Allowed

Priority Priority

Non-Tax Non-Tax
General

Claims

CHC

Allowed

CHC

Secured

Claims Coram

Allowed

Claims Coram
Unsecured

Allowed Coram Secured Claims and Coram
Equity Interests under
their

Allowed Coram
and

Claims Holders ofAllowed
the Plan

Classes Cl-IC
to reject

Coram
without

will receive the

no distribution
solicitation

and are therefore

deemed
in

the Plan

need

for

of

votes

Holders of AllowedCjaims

Classes

CRC

and

Coram

Allowed

Priority

Non-Tax

Claims

CRC

and Coram

Secured

Claims and Coram
presumed
to

General

Unsecured

Claims are unimpaired and

are therefore

conclusively

accept

A560

Case 1:04-cv-01565-SLR

Document 125

Filed 04/17/2007

Page 28 of 37

the Plan

without

the

need

for

solicitation

of

their

votes

Bolders of Allowed

Claims Corani

in

CHC

CHC General
Claims
are

Unsecured
solicited

Claims CIIC
to vote

CHC Note

Claims and Coram

Note

being

on the Plan

To
Ballot
set

vote

on the Plan
this

voting

holder

of an Allowed
mail
it

Claim must
that
it

complete
at

the

enclosed

with

Disclosure

Statement and

to

so

is

received

the address

forth

on the enclosed
Eastern

pre-addressedenvelope by no

later

than

the

Voting Deadline

which

is

500

P.M

Daylight the

Time

on

___________
all

2000
holders

Votes

cannot be transmitted Claims to return
voting
their

orally

Accordingly

Debtors urge

voting

of Allowed

signed

and completed

Ballots

promptly

For more detailed
--

information and

regarding

on

the

Plan see

uVoting and Confirmation

of the Plan

Voting Procedures

Requirements

SUMMARY OF THE PLAN AND THE REORGANIZATION
Summary
The overview
hereto
as
is

of the

Plan

following
in
its

is

brief

overview

of certain
to

material

provisions

of the Plan
is

This

qualified

entirety

by

reference contained

the provisions
in

of the Plan which which

attached

Exhibit

and

the
at

documents

the

Plan Supplement
Court
for

will

be 844

available

for inspection

the

United States Bankruptcy

the District

of Delaware Jones

King Street 919

Wilmington
Street

Delaware
Suite

19801 and Pachulski Stang
Delaware

Ziehl Young

P.C

North Market

1600 Wilmington

19801

Generally

The
satisfaction

Plan

proposed
all

by the Debtors

provides

for among other things nonpriori1y
indebtedness

the through

of substantially of cash

of the

Debtors unsecured of New

combination
cancellation

payments

issuance interests

Coram

Stock

and

New

Secured are

Notes

and

of existing equity

The overall puioses

of the Plan

to

cause

and permit
for

Coram
to

to

continue
its

to

comply
infusion

with

the provisions

of Stark

II

necessary

Coram

continue

core

therapies

business

to reduce other

the

amount

of debt

in the

Debtors

capital

structure

and

alter

certain

obligations

of the

Debtors

and

to

maximize the value
fair

of the ultimate

recoveries

to

all

creditors

of the Debtors on

and equitable

basis

A561

Case 1:04-cv-01565-SLR

Document 125

Filed 04/17/2007

Page 29 of 37

The Plan means
to

represents allocate

the culmination
to

of management analyses
creditors in

regarding

the best

maximize

and

value

the

Debtors

accordance

with their legal and

contractual will

priorities pursuant

Management
to

has

determined

that

the enterprise

value of the Debtors that through whole
or

be created

the

Plan greatly exceeds any values Confirmation

achievable
--

piecemeal liquidation Accordingly
the

See Voting and

of the Plan

Liquidation

Analysis

Plan proposed

by

the

Debtors

permits

Corarn and

its

operating

subsidiaries

to continue

their business

operations

eliminates indebtedness

substantially

all

of the Debtors
for the

existing

unsecured

non-priority of New and

and provides

payment
to

of cash and

the issuance

Coram Stock and New Secured Notes

the holders

of such indebtedness

extinguishes

all

existing equity

interests

of the Debtors

Summary
Under
into Classes according the
to

of Classes

and

Treatment

Plan Claims against
their

and

Allowed

Interests

in

the

Debtors are divided
the particular

similarity with other

Claims and
in

Allowed
the

Interests

Debtor against
asserted

which

the

Claims may be asserted and
legal

which

Allowed

Interests Interests

may be

and

the relative

and

contractual

priorities

of the Claims and

In provides Priority
that

accordance

with mandatory

provisions

of the Bankruptcy

Code

the Plan

holders

of certain

Claims Allowed Administrative
Priority

Claims Allowed Non-Tax
to

Claims and Allowed Tax

Tax

Claims will be

entitled

immediate or

in

the case

of

Allowed

Claims deferred

cash

distributions

The
Debtors upon
estimates

aggregate

amount

of Claims estimated of Claims
that

in

each

Class

is

based upon
will

the

of the aggregate
that

amounts
the

the

Debtors believe Claims

be asserted of these

resolution

of any Claims

Debtors believe
the
total

will

be Disputed

Certain

Disputed Claims may be material

and
total

amount

of

all

such Claims including
in the

Disputed development

Claims may
of the Plan

materially

exceed ihe

amount

of AiJowed

Claims assumed

The
below
are

estimated the

Aggregated

Amount of Claims Estimated
review of the Debtors bar dates and

depicted

in

the table and detailed

based upon

Debtors
the passage
in

preliminary

books

and

records

may be revised
analysis

following

of

all

applicable

the

completion

of

bf

all

Claims

filed

the

Cases

A562

Case 1:04-cv-01565-SLR

Document 125

Filed 04/17/2007

Page 30 of 37

Description Claims

and Amount

of

Treatment

of Interests

Administrative

Expense

Unimpaired payment
Effective

in

full

in

Cash

on the

later

of the

Claims Unclassified

Date

and

the date

such Claim becomes
to

an

Allowed
parties

Claim ofii on such other terms
provided

which

the

agree

however

that Administrative course

Expense
will

Claims incurred

in the ordinary

of business
in

be paid as such Claims become
course of

due and

payable

the

ordinary

business

Aggregate Estimated

Amount of Claims
$__________

Recovery

Estimated

100%

__________________________
Priority

Ownership

of Reorganized
the

Coram 0%
or

Tax Claims

Unimpaired option
later

at

Debtors

Reorganized
in full
in

Coranis

Unclassified

as applicable

payment Date

Cash on

the

of the Effective

and the date Note

such Claim becomes
to

an

Allowed

Claim ii

Tax

equal

the

full

amount
other

of such holders
terms as

Priority Tax
to

Claim or iii on
by the holder

such

mutually agreed

of an Allowed

Tax

Claim

and the Debtors or Reorganized

Coram

Aggregate Estimated

Amount of Claims
$____________

Recovery

Estimated

100%

Ownership Class

of

Reorganized on the Effective

Corarn

0%
at

CHC

Allowed

CHC

Unimpaired Debtors
Effective

Date
in

the option
later

of the
of the an

Priority

Non-Tax

Claims

payment

in

full

Cash

on the

Date or the date
or

such Claim becomes
treatment
to

Allowed Allowed

Priority Non-Tax against

Claims

Claim

ii

such

other

render

such

CRC
Amount of Claims
101

CRC

Priority

Non-Tax

Claim unimpaired

Aggregate Estimated

Recovery

Estimated

100%

__________________________

Ownership

of Reorganized

Coram 0%

A563

Case 1:04-cv-01565-SLR

Document 125

Filed 04/17/2007

Page 31 of 37

Class

CHC

Allowed

CHC

Unimpaired Debtors
Effective

on the Effective payment
in full

Date
in

at

the option the
later

of the of the
an

Secured

Claims

Cash on

Date

or the date other

such Claim
treatment
to

becomes
render

Allowed

Secured

Claims against

CHC

Claim or ii such

such Allowed

CHC
Amount of Claims

Secured

Claim unimpaired

Aggregate Estimated

Recovery

Estimated

100

$jO
Ownership of Reorganized

Coram
votes to accept the Plan

Class

CHC

Allowed

CHC

Impaired

If Class

CHC

by the

General Unsecured

Claims

majorities required

by section

1126c

of the Bankruptcy General Unsecured

Code
General Unsecured
against

each holder
receive
its

of an Allowed of

CHC

Claims

shall

Pro Rata share and
the

the

CHC

General

CHC

Unsecured

Consideration

ii the CHC
to

Noteholder cash pool of $2
the

Consideration million

equal

in

aggregate
to accept

If Class
set

CHC
in

fails

the Plan

by

majorities

forth

section

1126c

of the Bankruptcy General Unsecured

Code

each

holder

of an Allowed

CHC

Claim will receive Unsecured

Pro Rata share

of the

CHC

General

Consideration

Class favor

CHC

receives

an enhanced

distribution

if

it

votes

in

of the Plan

Aggregate Estimated

Amount of Claims
______________

Recovery

Estimated

_%

if if

accepting

Plan

rejecting Plan

____________________________
Class

Ownership Impaired recovery
share

of Reorganized
if

Coram 0%
votes
fails to to

CHC

Allowed

CHC

Class

Notes

Claims

If Class

CHC CHC

accept accept

the the

Plan no Plan pro
rata

of the Noteholder Consideration

Allowed Claims
the

arising

under

Notes

against

CHC
Recovery

Aggregate Estimated

Amount of Claims
$12521

Estimated

if

Class

CHC
of

accepts

Plan

million
rata cash Plan share
if

$2 million
Cl-IC rejects

pool

Class

___________________________

Ownership

of Reorganized

Coram 0%

A564

Case 1:04-cv-01565-SLR

Document 125

Filed 04/17/2007

Page 32 of 37

Class

CHC

Allowed

CHC

Impaired canceled

no distribution

and

all

rights

and

interests

Equity

Interests

All

equity

interests

in

CHC

Recovery

Estimated

Aggregate Estimated

Value

of Interests

Ownership

of Reorganized

Coram 0%

$0
Allowed
Unimpaired Debtors
Effective

Class

Coram

on the Effective payment
in full

Date
in

at the option

of the of the
an

Cora3n Priority Non-Tax

Cash

on the

later

Claims

Date
or

or the date

such Claim becomes
to

Allowed

Claim
Priority against

ii such other treatment
Non-Tax

render

such Allowed

Non-Tax Claims

Coram

Priority

Claim unimpaired

Coram

Aggregate Estimated
$f

Amount of Claims

Recovery

Estimated

100%

Ownership

of Reorganized on the Effective payment
in

Coram 0%
Date
Cash
at

Class

Coram

Allowed

Unimpaired Debtors
Effective

the option
later

of the of the
an

Coram Secured Claims

fill in

on the

Date or the date
or

such

Caim
to

becomes

Allowed

Allowed
against

Secured

Claims

Claim

ii such other treatment

render

such Allowed

Coram

Coram Secured Claim unimpaired

Aggregate Estimated

Amount of Claims
StOl

Recovery

Estimated

100%

Ownership

of Reorganized
each
its

Coram 0%
Coram Note Claim
the

Class

Coram

Allowed Claims

Impaired
shall

holder

of an Allowed of

Coram Note

receive

Pro Rata share

New Coram

Stock

and

ii the New

Secured Notes

Allowed Claims
the

arising

under

Notes

against

Coram

Aggregate Estimated

Amount of Claims

Recovery

Estimated

180 252

29

83%

$252

million

__________________________

Ownership

of Reorganized

Coram 100%

A565

Case 1:04-cv-01565-SLR

Document 125

Filed 04/17/2007

Page 33 of 37

Class

Coram

Allowed

Unimpaired

at

the option in
full

of Coram or Reorganized
in

Coram General Unsecured Claims

Coram
Effective

payment Date

Cash

on the

later

of the

or the date

such
or

Claim becomesan Allowed
treatment to

Claim ii Reinstatement
General Unsecured
against

iii such other

Claims

render

such Allowed

Coram General Unsecured

Claim

Coram

unimpaired

Aggregate Estimated

Amount of Claims

Recovery

Estimated

100% Coram 0%
and
all

___________________________
Class

Ownership

of Reorganized no
distribution

Coram

Allowed

Impaired canceled

rights

and

interests

Comm

Equity Interests

All equity

interests

in

Coram

Aggregate Estimated

Value

of Interests

Recovery

Estimated

___________________________

Ownership

of Reorganized

Coram

0%

THE TREATMENT AND DISTRIBUTION PROVDED TO HOLDERS OF ALLOWED CLAIMS AND EQUITY INTEREST PURSUANT TO THE PLAN ARE IN FULL AND COMPLETE SATISFACTION OF THE ALLOWED CLAIMS AND EQUITY INTERESTS
AS THE CASE

MAY BE ON ACCOUNT
ARE MADE
of

OF WHICH SUCH TREATMENT

IS

GIVEN AND

SUCH DISTRIBUTIONS
Sources

Cash

to

Make
cash

Plan Distributions

Coram
Unsecured
Classes the

will contribute

in the will
to

amount

of $2 million dollars
to

to

fund the Claims
in

Claims Reserve and
cash

which
Cl-IC to

monies
fails all

be distributed
the

the holders pursuant

of Allowed
to

CHC
The

if Class
required

accept

Plan
and

CHC
if

the provisions

of

Plan

make

other

payments

distributions

contemplated by the
the

Plan will be generated Financing
sufficient Facility cash
to

from on
to

the operations c