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IN THE UNITED STATES BANKRUPTCY COURT

FOR THE NORTHERN DISTRICT OF TEXAS

FORT WORTH DIVISION

In re: )

)

LION STAR NACOGDOCHES HOSPITAL, 

LLC d/b/a NACOGDOCHES MEMORIAL 

HOSPITAL

)

)

)

Case No. 23-43535-mxm

Chapter 11 Case

)

Debtor. )

STIPULATION AND AGREED ORDER 

CONFIRMING CASH RECEIVED FROM SUPPLEMENTAL FEE PROGRAMS

CONSTITUTES “DIP COLLATERAL” AND GRANTING RELATED RELIEF

This stipulation and agreed order (the “Stipulation and Agreed Order”) is made by and 

between Lion Star Nacogdoches Hospital, LLC (the “Debtor”) and eCapital Healthcare, Corp. 

(“DIP Lender”, and with the Debtor, the “Parties”).

A. On December 22, 2023, the Court entered the Final Order (I) Authorizing the 

Debtor to Obtain Postpetition Financing on a Secured, Superpriority Basis; (II) Authorizing the 

Debtor to Use Cash Collateral; (III) Modifying the Automatic Stay, and (IV) Granting Related Relief

[Docket No. 127] (the “DIP Order”), which authorized the Debtor’s entry into the Superpriority 

The following constitutes the ruling of the court and has the force and effect therein described.

Signed February 1, 2024

_____________________________________________________________________

____________________________

United States Bankruptcy Judge

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Debtor-In-Possession Credit and Security Agreement between the Debtor and the DIP Lender

(the “DIP Credit and Security Agreement”).1

B. The Debtor routinely participates in various state-wide supplemental and direct 

payment programs managed by the Texas Health and Human Services Commission which allow 

for supplemental Medicaid fees to be paid to participating health care providers, including, without 

limitation, such programs as the Uncompensated Care Program (UC), the Hospital Augmented 

Reimbursement Program (HARP), Disproportionate Share Hospitals Funding (DSH), the 

Comprehensive Hospital Increase Reimbursement Program (CHIRP) and similar programs 

(collectively, the “Supplemental Payment Programs”). Payments made and to be made to the 

Debtor pursuant to the Supplemental Payment Programs are defined herein as “Supplemental 

Payments.” For example, payments under the UC Payment Program may be used by 

participating hospitals to reduce the actual uncompensated cost of medical services provided to 

uninsured individuals who meet a provider’s charity care policy. The Debtor expects to receive 

at least $2,100,000 in Supplemental Payments pursuant to the UC Program in the first quarter of 

2024. 

NOW, THEREFORE, in consideration of the Recitals set forth above, which are 

incorporated herein by this reference, the Parties hereby stipulate and agree, and the Court 

ORDERS, as follows:

1. All of the Debtor’s Supplemental Payments and proceeds thereof received 

pursuant to the Supplemental Payment Programs are included in the definition of “DIP Collateral”

(as defined in the DIP Order). 

2. The DIP Liens (as defined in the DIP Order) are secured by the Supplemental 

Payments and the proceeds thereof, in addition to the other items included in the definition of DIP 

Collateral as set forth in the DIP Order and the DIP Credit and Security Agreement.

1 Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to such 

terms in the DIP Order or the DIP Credit and Security Agreement, as applicable.

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3. The inclusion of the Supplemental Payments and the proceeds thereof in the 

calculation of the Borrowing Base is subject to the DIP Lender’s sole and absolute discretion. 

4. The Parties are authorized to execute and deliver any documents and take such 

other actions as necessary or appropriate to implement and effectuate the relief granted by this 

Stipulation and Agreed Order.

5. Nothing in this Order shall be deemed to limit the DIP Superiority Claim or the DIP 

Collateral.

6. All rights and relief granted in the DIP Order to the DIP Lender related to the DIP 

Liens, DIP Superpriority Claim, and DIP Collateral shall apply to the Supplemental Payments and 

the proceeds thereof.

7. This Court shall retain jurisdiction to hear and determine all matters arising from or 

related to the implementation, interpretation, or enforcement of this Stipulation and Agreed Order.

### END OF ORDER ###

Approved, Stipulated, and Agreed By:

/s/ Lynda L. Lankford

Jeff P. Prostok

State Bar No. 16352500

Lynda L. Lankford

State Bar No. 11935020

FORSHEY & PROSTOK LLP

777 Main St., Suite 1550

Fort Worth, TX 76102

Telephone: 817-877-8855

Facsimile: 817-877-4151

jprostok@forsheyprostok.com

llankford@forsheyprostok.com

COUNSEL TO DEBTOR

/s/ Edward J. Green 

Edward J. Green (Admitted Pro Hac Vice)

FOLEY & LARDNER LLP

321 N. Clark Street, Suite 3000

Chicago, IL 60654

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Tel: (312) 832-4500

Fax: (312) 832-4700

Email: egreen@foley.com

COUNSEL FOR ECAPITAL HEALTHCARE CORP.

L:\JPROSTOK\Lion Star Nacogdoches Hospital, LLC #6429\Pleadings\Stipulation and AO re Supplemental Fees 2.1.24.docx

Alissa M. Nann (Admitted Pro Hac Vice)

FOLEY & LARDNER LLP

90 Park Avenue

New York, NY 10016

Tel: (212) 682-7474

Fax: (212) 687-2329

Email: anann@foley.com

Jake W. Gordon (Admitted Pro Hac Vice)

FOLEY & LARDNER LLP

500 Woodward Avenue, Suite 2700

Detroit, MI 48226

Tel: (313) 234-7100

Fax: (313) 234-2800

Email: jake.gordon@foley.com

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