elizabeth warren

Corizon Reaches Bankruptcy Deal That May Allow It to “Profit at the Expense of Creditors”

    • Leading prison health provider Corizon Health split last year and filed one company, called Tehum, into bankruptcy
    • Sources tell Insider the parties reached a tentative settlement of $30 million, a small fraction of the company’s debt
    • That deal could leave hospitals and hundreds of prisoners who claim they were harmed by Corizon with tiny settlements
    • Sen. Elizabeth Warren is now looking into Corizon’s use of a controversial legal maneuver called the Texas Two-Step

Corizon Health, once the nation’s largest prison healthcare provider, reached a tentative bankruptcy deal last week that could leave hundreds of prisoners with pennies on the dollar for their medical malpractice claims. 

If the settlement is approved, it would mean that Corizon’s owners succeeded in their use of a controversial financial maneuver called the Texas Two-Step. In a recent civil complaint, Isaac Lefkowitz, a company representative, said the Two-Step is used to “force plaintiffs into accepting lower payments.”

Sen. Elizabeth Warren has called Corizon’s use of the Two-Step “an alarming red flag.”

According to two people close to the negotiations, the settlement figure

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It’s a ‘severe problem’ that student-loan borrowers are still facing roadblocks getting rid of their debt through bankruptcy, Elizabeth Warren says

Sen. Elizabeth Warren

Sen. Elizabeth Warren.Tom Williams/CQ-Roll Call, Inc via Getty Images

  • Elizabeth Warren called on the Justice Department to restore bankruptcy protections for student-loan borrowers.

  • Borrowers currently have to prove a difficult standard in court to get rid of their debt.

  • Biden’s administration has promised reform, but the process continues to be slow-moving.

Massachusetts Sen. Elizabeth Warren is renewing the call to restore bankruptcy protections for student-loan borrowers.

Last week, President Joe Biden took a major step in providing relief to millions of borrowers by announcing up to $20,000 in student-loan forgiveness for those making under $125,000 a year. While that relief is expected to wipe out balances for 20 million borrowers, the majority will still have debt balances that some might seek to discharge in court through bankruptcy. But doing so has historically been very difficult, and Warren wants Attorney General Merrick Garland to ensure bankruptcy becomes a viable route to providing relief.

“To support the administration’s efforts to overhaul the student loan system and ensure that bankruptcy relief is a viable option for borrowers in severe financial straits, it is critical that you issue and implement this updated guidance without delay,” Warren wrote in a Thursday letter

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