Texas
How Texas’s bankruptcy courts are used to shield a prison healthcare provider
When late last year the largest provider of healthcare to inmates in jails and prisons in the US found itself facing an avalanche of medical malpractice lawsuits, its path forward was seemingly obvious.
By filing for Chapter 11 bankruptcy in Texas’s increasingly popular bankruptcy courts, Wellpath Holdings could restructure itself, in the process staying the 1,500 lawsuits it had been facing and limiting its exposure to more than $100m in potential liabilities.
Last month, a bankruptcy judge for the southern district of Texas in Houston extended those stays to give Wellpath additional time to propose how it might exit bankruptcy and continue operating.
But critics say that the move is a cynical attempt to avoid paying out to the families of people devastated by the company’s actions in a state increasingly seen as a safe haven for big corporations looking to avoid paying out to people and families their actions have harmed.
Among the cases stayed for Wellpath was one brought by Teesha Graham of Albuquerque. Her father Frankie died in 2022 after spending almost a week slumped in his San Juan county jail cell, covered in vomit and excrement as medical staff and prison guards refused his requests for help, an inmate in the jail told the Guardian.
Also stayed was a claim brought by Nicole Poppell of Colorado Springs. Her daughter Savannah died aged 24 just three days after she was booked into El Paso county jail in Colorado. Incessant vomiting caused by opiate withdrawal tore her esophagus and she bled to death in her cell.
“Now they’re filing bankruptcy the chances are I could get next to nothing but really I don’t even give a shit about the money,” said Nicole. “I just want to be heard.”
Poppell and Graham are just two grieving family members wanting the bankruptcy court to consider their claims against Wellpath because as “unsecured creditors”, but they’re at the bottom of the hierarchy when it comes to who gets paid from the limited funds that remain.
Last week they enjoyed a small victory as Wellpath dropped its request that the court approve some $5m in bonuses for 12 of its executives. “I’ll never understand it,” said Graham.
Attorneys representing claimants against Wellpath say its bankruptcy was a long time coming, and part of a cynical strategy that would see it minimize costs low with reduced staff and improper insurance coverage. Malpractice lawsuits would inevitably accumulate but using the Texas courts it could largely shed itself of those liabilities and exit from it all relatively unscathed.
“These companies keep their costs as low as possible and then rely on the bankruptcy courts in Houston to bail them out once they hit a critical mass of lawsuits,” said Adam Flores, a New Mexico attorney representing Graham.
Wellpath is a for-profit business headquartered in Nashville, Tennessee, and owned by private equity firm HIG Capital. It operates in jails and prisons across almost 40 states and is responsible for the care of hundreds of thousands of inmates.
Although bankruptcy is governed by federal code, jurisdictions will enforce it with varying lenience, and typically if a company has enough assets in a given state they can make use its courts.
In recent years, the southern district of Texas has become a go-to bankruptcy venue, displacing the southern district of New York as the second most popular in the country behind Delaware.
“The Southern District of Texas really blew up four or five years ago,” said RJ Shannon, a bankruptcy attorney in Houston who is representing almost 100 claimants in the Wellpath case. “It’s a debtor-friendly court, so it’s where all the big cases will be filed.”
Last year, the southern district of Texas saw some 31 filings for bankruptcy by companies with assets greater than $100m, whereas the southern district of New York saw just 11, according to figures from Bankruptcy Data.
Wellpath’s filing in November made it the second prison contractor to have used the court’s Houston division in just two years after prison healthcare firm Corizon filed for Chapter 11 in early 2023. The maneuver it attempted has been referred to as “the Texas Two-Step” and sees a company split itself into two, placing valuable assets in one and its liabilities in the other.
Although Wellpath is pursuing a simpler and more traditional Chapter 11 restructuring, its critics say the move is intended to have precisely the same effect.
“I think the reason Wellpath filed here [in Texas] is that they saw Corizon do it and they saw good things came of it,” said Shannon. He said that not only is the Houston court friendly to debtors, it’s also “user-friendly”, meaning proceedings can take place fast.
Anna Holland Edwards, a civil rights attorney in Denver who has brought a handful of cases against Wellpath over her career, said she saw its bankruptcy coming from a mile away. In early November her office asked a state court to issue sanctions on the company ahead of its expected bankruptcy.
Holland Edwards and other critics of Wellpath paint its use of Chapter 11 as a “business model” – both inevitable and symptomatic of the increasing extent to which America’s corporate assets have come under the ownership of private equity funds.
They argue that Wellpath, under private equity ownership, borrowed money to buy up regional facilities across the country and then underbid rivals and county services in order to win taxpayer-funded government contracts. Underbidding meant cost-cutting.
“If they don’t have enough money, maybe instead of having 10 nurses working in jail they’d only get five,” said Shannon.
According to Graham, it was a lack of staff in San Juan county jail that led to her father’s death: “They feel like they can send two people in there to care for over 500 humans?”
Another cost-cutting measure that may have brought Wellpath to its knees was its purchase of liability insurance policies that appeared to meet state and local government requirements but failed to establish any “true risk transfer”. As revealed in the ongoing bankruptcy proceedings, these policies only pay out if Wellpath covers a share of the damages, otherwise, no insurance kicks in.
And so tight were Wellpath’s purse strings that at the time of its bankruptcy it had left around 15 EMS providers in Michigan with more than $6m worth of unpaid bills, according to the Michigan Association of Ambulance Services.
Where the chips will now land remains uncertain, according to Shannon. As it stands, the ball is in Wellpath’s court, as prepares to issue a revised plan for how it will restructure and emerge out of Chapter 11 operational.
A recent ruling by bankruptcy Judge Alfredo R Perez of the southern district of Texas extended the stay on the pending lawsuits until at least 30 April.
In the meantime, unsecured creditors will fight to have as much money as possible set aside for their settlements. In many cases, especially those involving personal injury, once the stays are lifted plaintiffs’ right to seek damages will be restored, but the pool of funds from which to collect will be limited.
For Wellpath, the plan after Chapter 11 is to continue business as usual, and with Trump in office, there has never been a better climate in which for it to emerge from bankruptcy, according to Andy McNulty, another civil rights attorney based in Colorado.
“We saw when Donald Trump was elected that private prison company stocks soared to all-time highs so there’s no reason to believe that if Wellpath is allowed to continue operating it will not continue to profit off the suffering of inmates across the country,” he said.
A spokesperson for Wellpath said in a statement to the Guardian that it had filed for Chapter 11 in order to “strengthen our financial foundation without compromising our ability to deliver high-quality patient care”.
“We remain committed to providing vital healthcare services to underserved populations and are confident this process will allow us to continue to do so for years to come,” they added.
The company declined to say why it chose to file in the southern district of Texas or to answer questions about its liability insurance.
Savannah’s mother Nicole said she wants to see Wellpath dissolved for good. “For three days she was in there and she was begging for help, she was crying for help, and she was alone,” she said. “I want these people shut down.”
Texas
Most applicants for Texas school choice vouchers already attend private schools, state data shows
The deadline for Texas families to apply for Texas Education Freedom Accounts (TEFA), also known as school vouchers, is on March 17.
TEFA is the $1 billion program that provides families with taxpayer money to help pay for private school. A longtime priority of Gov. Greg Abbott, Texas Republicans were able to pass it through the Legislature in a special session in 2025 after years of opposition from a coalition of Democrats and some Republicans worried about it negatively impacting public schools.
In the period from when applications opened on Feb. 4 through March 8, more than 160,000 Texas families have applied for the vouchers. Acting Texas Comptroller Kelly Hancock expects the program to reach capacity in its first year.
Texas school voucher application data by income
According to data from the Comptroller’s Office, 79% of the applicants for TEFA are already in private school. Lawmakers who advocated for the program said it was designed to give public school and homeschooled students an opportunity to switch to a private education.
After applications close, the Comptroller’s Office will allocate funding to eligible families through a lottery that prioritizes students with disabilities first. Eleven percent of all applicants, about 18,000, are students with disabilities from families at or below 500% of the Federal Poverty Level.
Next on the priority list is students from low- and middle-income families. Just 35% of applicants are from households that earn 200% or less of the Federal Poverty Level:
- 200% or less of the Federal Poverty Level ($66,000 or less for a family of 4): 35%
- Between 200% and 500% of the Federal Poverty Level ($66,001-$164,999 for a family of 4): 36%
- 500% or more of the Federal Poverty Level: ($165,000 or more for a family of 4): 29%
The Comptroller’s Office will report the waitlist to the Texas Legislature to determine funding for future years.
Texas school voucher application data by grade
The highest share of applications are for students who will be entering pre-K in the fall. Nearly 21,000 applications, about 12.8%, are in that cohort. The number of applicants per grade level declines as the students get older:
- Pre-K: 20,975
- Kindergarten: 15,777
- First grade: 13,654
- Second grade: 13,035
- Third grade: 12,922
- Fourth grade: 12,449
- Fifth grade: 12,273
- Sixth grade: 12,262
- Seventh grade: 10,953
- Eighth grade: 9,600
- Ninth grade: 9,464
- Tenth grade: 7.921
- Eleventh grade: 6,731
- Twelfth grade: 5,347
Texas school voucher applications by school district
The Comptroller’s Office also released a list that broke down the number of applications submitted in each school district across the state.
How much money public school districts will miss out on will depend on how many enrolled or prospective students they lose to private school because of TEFA, since state funds follow the student. But since 79% of applicants are already in private school, the extent of the impact on public school funding may be limited.
Here are the North Texas school districts with the most TEFA applications from within their boundaries:
- Dallas ISD: 5,267
- Fort Worth ISD: 3,151
- Plano ISD: 2,875
- Richardson ISD: 1,803
- Frisco ISD: 1,793
- Arlington ISD: 1,746
- Northwest ISD: 1,661
- Garland ISD: 1,622
- Lewisville ISD: 1,614
- Keller ISD: 1,541
Texas
Texas woman and dog killed in Arlington collision on Cooper Street
ARLINGTON, Texas – Arlington police are continuing to investigate a fatal crash that killed a 43-year-old woman on Friday afternoon, saying speed was a factor and that investigators are working to determine whether street racing was involved.
Surveillance video shows speeding before crash
What we know:
Tanya Cypert was less than a mile from her Arlington home when the collision occurred at the intersection of Cooper Street and Eden Road, authorities said. Cypert had been on her way to get something to eat before her shift at Great Wolf Lodge in Grapevine.
Police said surveillance video from a nearby business shows two vehicles speeding northbound on Cooper Street moments before the crash.
The footage shows a black sedan moving in and out of frame, followed by a second black sedan, identified by police as a 2025 Mercedes, weaving between other vehicles.
Another camera angle shows Cypert’s white Hyundai Tucson slowing to make a left turn onto Eden Road as the first black sedan passes through the intersection. Seconds later, the Mercedes enters the intersection and collides with Cypert’s vehicle.
The impact produced a cloud of smoke and caused an engine to detach and land on the road.
Arlington police investigate potential street racing
Dig deeper:
The 18-year-old driver of the Mercedes was injured and remains hospitalized with broken bones, police said. Investigators have not yet interviewed him.
Cypert was transported to a hospital, where she later died. Her French bulldog, which was in the vehicle with her, was also killed.
Victim’s family on the tragedy
What they’re saying:
Cypert’s sons, Chancellor and Ethan, said they returned to the crash site Monday to honor their mother’s memory.
“It was a regular day for her, and now it’s going to be memorialized as the worst day of our lives,” said Chancellor Cypert.
Chancellor said the family is seeking justice but not revenge.
“As much as we want justice and stuff, it’s not about seeking revenge. It’s about trying to honor her memory and how many people she loved,” he said. “She loved everybody.”
Ethan said the damage to the front of the vehicle was “crazy and mind-blowing,” adding, “There is no need for that amount of speed at all.”
A family friend, Karen Arce, described Cypert as selfless and supportive.
“The sun just shines a little less bright every day,” Arce said.
The family also said an off-duty Midlothian police officer witnessed the crash and was the first to exit his vehicle to try to help. They expressed gratitude for his efforts.
Charges pending in fatal Arlington collision
What’s next:
No arrests have been made, and no charges have been filed. Police said they are continuing to interview multiple witnesses and review surveillance video as the investigation remains active.
The Source: Information in this article was provided by FOX 4’s Peyton Yager.
Texas
Texas Officials Unveil Amended Hemp Rules With Strict ‘Total THC’ Limits But Lower Licensing Fee Than Previously Floated – Marijuana Moment
Texas officials have adopted a series of new rules for the state’s hemp market—with certain revisions that advocates and stakeholders call a “direct victory,” including changes to make participation in the industry more affordable, and other regulations that threaten to severely restrict product availability.
The Department of State Health Services (DSHS) unveiled the amended hemp rules on Friday, about two months after publishing proposed regulations with licensing fees and other changes that led organizations such as the Texas Cannabis Policy Center (TCPC) to sound the alarm.
In response, the department received more than 1,400 comments urging revisions.
“Revised rules have slashed manufacturer fees from $25,000 to $10,000 and retailer fees from $20,000 to $5,000. This is a direct victory for advocacy,” Heather Fazio, director of TCPC, said in an email to supporters on Monday. “However, significant challenges remain.”
Specifically, the agency decided to maintain language requiring hemp products to be tested for “total THC” content, including THCA, which means most cannabis flower would be considered non-compliant with limitations imposed under state law.
“We estimate this will hand 50 percent of the legal market to illicit operators, making our state less safe,” Fazio said.
TCPC and other groups such as the Texas Hemp Business Council (THBC) have also pointed out that there would be additional requirements imposed on hemp businesses with respect to product testing, labeling and record-keeping.
Separately, under a proposed rule from the Texas Alcoholic Beverage Commission (TABC) there would also be a “less consequential, but important” update to the hemp program, Fazio said, with the agency seeking to prohibit the on-site consumption of hemp at businesses where alcohol isn’t allowed. There would be no “sampling” exceptions in place, either.
(Disclosure: Fazio supports Marijuana Moment’s work with a monthly Patreon pledge.)
TCPC did share a piece of positive news for advocates, noting “steady progress” in expanding the state’s medical cannabis program under a law enacted last year. While adult-use legalization has continued to stall in the conservative legislature, the medical marijuana program is significantly expanding, with nine new licenses already approved and three more expected before April 1.
Meanwhile, last week, Texas voters approved a marijuana legalization question that appeared on the state’s Democratic primary ballot.
As part of the primary election on Tuesday, each major party was able to place several non-binding propositions on the ballot that allow voters show how they feel on key issues. The Texas Democratic Party used one of its propositions to find out where the electorate stands on legalizing cannabis and whether past convictions should be expunged.
For what it’s worth, a statewide poll released last month found that Texas voters don’t like how state leaders and lawmakers have handled marijuana and THC policy issues. In the survey, a plurality of voters (40 percent) said they disapprove of how their elected officials have approached the issue, according to the survey. Just 29 percent said they approve of how cannabis issues have been handled, while 31 percent said they didn’t have an opinion one way or another.
A separate poll released last year found that a plurality of Texas voters want the state’s marijuana laws to be made “less strict.” And among the legislative items lawmakers considered during recent special sessions, voters say a proposal to address hemp regulations was among the least important.
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Marijuana Moment is tracking hundreds of cannabis, psychedelics and drug policy bills in state legislatures and Congress this year. Patreon supporters pledging at least $25/month get access to our interactive maps, charts and hearing calendar so they don’t miss any developments.
Learn more about our marijuana bill tracker and become a supporter on Patreon to get access.
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For its part, the state Department of Public Safety in October adopted additional rules to increase the number of licensed dispensaries, establishing security requirements for “satellite” locations and authorizing the revocation of licenses for certain violations.
DSHS also recently finalized rules allowing doctors to recommend new qualifying conditions for cannabis patients and creating standards for allowable low-THC inhalation devices.
Meanwhile, bipartisan Texas lawmakers say the stage is set to advance legislation next session establishing regulations for hemp THC products, with growing understanding among their colleagues that prohibition fails to effectively address concerns about the cannabis market.
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