Case Information
*0 FILED IN 15th COURT OF APPEALS AUSTIN, TEXAS 6/30/2025 3:47:07 PM CHRISTOPHER A. PRINE Clerk *1 ACCEPTED 15-25-00108-CV FIFTEENTH COURT OF APPEALS AUSTIN, TEXAS 6/30/2025 3:47 PM NO. 15-25-00092-CV CHRISTOPHER A. PRINE CLERK ______________________________________________ IN THE FIFTEENTH COURT OF APPEALS AUSTIN, TEXAS
______________________________________________ BRIGHT HEALTH MANAGEMENT, INC.
V.
CANTILO & BENNETT, LLP, SPECIAL DEPUTY RECEIVER FOR BRIGHT
HEALTHCARE INSURANCE COMPANY OF TEXAS AND
NO. 15-25-00108-CV ______________________________________________ IN THE FIFTEENTH COURT OF APPEALS AUSTIN, TEXAS
______________________________________________ IN RE BRIGHT HEALTH MANAGEMENT, INC. ___________________________________________ RESPONSE TO EMERGENCY MOTION FOR STAY ______________________________________________
Cantilo & Bennett, LLP, Special Deputy Receiver for Bright Healthcare Insurance Company of Texas (the “SDR”) files this response to the Emergency
Motion for a Stay filed by Bright Health Management, Inc. (“BHM”). At issue in
these parallel matters is an order rendered by a receivership court requiring BHM to
turn over books and records of Bright Healthcare Insurance Company of Texas
(“Bright Healthcare”) to the SDR (the “Order”). 4CR1705-08; Ex.1. The stay motion
4896-7693-8321
ignores that fundamental nature of the Order and instead tries to characterize it as
nothing more than a plain-vanilla discovery ruling that the Court should readily stay
pending review. In fact, the Order has nothing to do with discovery but rather
enforces statutory receivership functions that, the facts show, must proceed with
urgency. Moreover, though the Order was signed May 6, 2025, it enforces a
permanent injunction rendered by the receivership court in November 2023 that
ordered turnover of the books and records. There has thus already been significant
delay in providing the books and records to the SDR, and BHM has had plenty of
time to gather those materials. The Court should deny the stay motion.
ARGUMENT
A. The Order enforces the SDR’s statutory right—which is reflected in the
receivership court’s permanent injunction—to take control of Bright Healthcare’s books and records.
In November 2023, the Texas Department of Insurance (“TDI”) filed an original petition to place Bright Healthcare into liquidation because it is insolvent.
1CR3. The receivership court granted TDI’s petition and rendered an order that: (1)
appointed the Commissioner of the TDI as Liquidator of Bright Healthcare pursuant
to Tex. Ins. Code §443.151; (2) granted the Liquidator title to “all of Bright
Healthcare’s] property,” and ordered that the Liquidator “is authorized to take
control and possession of Defendant’s property, wherever located, and remove all
such property from Defendant’s premises;” and (3) authorized appointment of the
SDR to perform the Liquidator’s functions regarding Bright Healthcare. 2CR316-27
(the “Receivership Order”).
Critical to these parallel actions, the Receivership Order included a permanent injunction applicable to BHM and other affiliates of Bright Healthcare. 2CR321-22.
Under the permanent injunction, BHM was enjoined from “[d]oing anything to
prevent the Liquidator or the Liquidator’s designees from gaining access to,
acquiring, examining, or investigating any of Defendant's property or any other
property, books, documents, records, or other materials concerning Defendant’s
business, under whatever name they may be found.” 2CR323. BHM was also
ordered to “make available and disclose to the Liquidator or the Liquidator’s
designees the nature, amount, and location of Defendant’s property, and promptly
surrender all such property to the Liquidator or the Liquidator’s designees .” Id .
(emphasis added).
BHM did not appeal the Receivership Order or its permanent injunction. [1] *4 The same day it signed the Receivership Order, the receivership court signed an Order of Reference to Master designating Tom Collins as Special Master for the
Bright Healthcare receivership. 2CR307. The Receivership Court explained that a
Special Master is appointed in every receivership brought under Chapter 443 of the
Insurance Code: “Insurance receiverships are inherently exceptional cases requiring
expert review by the Receivership Court. Insurance Code Chapter 443 imposes a
duty on the Receivership Court to direct and approve numerous complex actions
during the delinquency proceeding. Therefore, to provide the requisite judicial
supervision of this proceeding, the Court finds that it is necessary to appoint a master
herein under Rule 171 of the Texas Rules of Civil Procedure.” Id .
The Special Master described the SDR’s first steps after the Receivership Order was signed: “One of the fundamentals of a receivership is that the receiver,
here the SDR, suddenly charged with taking over a business has as one of its first
orders of business the duty to take immediate possession of all the books and records
of the company. For obvious reasons, this is an essential and critical first step.”
3CR613. The SDR thus sought to take possession of the books and records of Bright
Healthcare—as a fundamental first step—so that he could identify the assets and
liabilities and perform the functions of liquidating Bright Healthcare.
BHM, which had performed management functions for Bright Healthcare and other affiliated entities before the receivership, had possession of the bulk of Bright
Healthcare’s books and records. Despite the mandates of the Receivership Order and
its permanent injunction to “promptly” turn over Bright Healthcare’s property, BHM
doled out only bits and pieces of Bright Healthcare’s books and records to the SDR
based on what it thought the SDR might need. Because the lack of complete files
makes it impossible for the SDR to perform his functions, he filed a motion to
enforce the permanent injunction and asked the receivership court to order BHM to
turn over all Bright Healthcare’s books and records within 10 days, including “[a]ll
books and records relating to all debts owed to [Bright Healthcare] by BHM affiliate,
Neuehealth Partners Texas RBE, LLC.” 3CR339. The books and records relating to
Neuehealth are particularly urgent because Bright Healthcare has a $125 million
receivable against Neuehealth—a major potential asset of the receivership estate—
but the SDR has been unable to secure books and records relating to that receivable
from BHM.
The SDR filed his motion to enforce in July 2024, more than six months after the Receivership Order and its permanent injunction first required BHM to
“promptly” turn over the books and records to the SDR. 3CR339. The process
seeking books and records from BHM has thus not been precipitous; indeed, it has
been excessively delayed.
The Order granting the motion to enforce was the product of a lengthy and deliberative process. After the SDR filed the motion to enforce, there was an
evidentiary proceeding before the Special Master, who has significant experience
handling statutory receivership proceedings. The Special Master held an evidentiary
hearing in September 2024, 3RR, then issued a thoughtful and thorough
Memorandum Report and Recommendation to the receivership court in January
2025. 3CR612-36 (the “Special Master Report”). The Special Master Report
explained that BHM is obligated to “promptly” and “immediately” turn over the
books and records to the SDR by provisions of the Texas Insurance Code, the terms
of the Receivership Order and its permanent injunction, and a Management Services
Agreement between BHM and Bright Healthcare (the “MSA”). [2] 3CR618-25.
Under the MSA, BHM was required to keep “sufficient” books and records reflecting the “nature and details of the management services and financial
transactions undertaken for” Bright Healthcare. MSA ¶¶5, 1.2, 1.4, 1.7. The MSA
further provided that all such “books and records” are and shall remain the
“property” of Bright Healthcare, and BHM shall maintain them in a “fiduciary
capacity.” MSA ¶5. The MSA also echoed the Receivership Order’s timing mandate
and requires that BHM “immediately” turn over Bright Healthcare’s books and
records in the event of a receivership:
*7 MSA ¶9.
The Special Master Report reflects that he considered BHM’s obligation to “promptly” and “immediately” turn over Bright Healthcare’s books and records, the
SDR’s imminent need for the books and records, and the procedural complexities
created by BHM’s own management practices that failed to maintain separate records of its various affiliates. The Special Master Report acknowledged the
technical challenges involved, but explained that time is of the essence in turning
over Bright Healthcare’s books and records to the SDR:
This Estate now is over one year old. Claims are being filed. The Court has set a claims filing deadline of February 3, 2025. Precious time has been lost regarding turning over the required information. Time thus is of the essence for the categories of records described above to be turned over.
The Special Master appreciates the very substantial time, effort, manpower and cost required for Bright Management to retrieve and sort the Estate's records and information from that of all its other subsidiary *8 companies. . . . Bright Management cannot be heard to complain that this ninety (90) day deadline is unrealistic, because that deadline far exceeds the “immediate” turnover that Bright Management promised, and that the Texas Insurance Code and Permanent Injunction contemplate.
3CR632-35 (emphasis added).
After the Special Master Report, the receivership court held an additional hearing and considered the issue de novo . 2RR. The entire evidentiary record from
the proceedings before the Special Master was admitted into evidence at the hearing
before the receivership court. 3RR; 2RR8-9; 4CR1706. The receivership court
adopted the recommendation of the Special Master Report and ordered BHM to turn
over Bright Healthcare’s books and records within 90 days and provide a status
report every 20 days. 4CR1705. That deadline is 20 months after the Receivership
Order first required BHM to turn over the books and records, thirteen months after
the SDR filed his motion to enforce the Receivership Order and its permanent
injunction, and eight months after the Special Master Report ordered that relief.
B. Neither the permanent injunction in the Receivership Order nor the Order
enforcing that permanent injunction are subject to the “scope” or “relevance” parameters that apply to discovery orders.
Throughout the stay motion, BHM seeks to characterize the Order as a discovery order, insisting that any obligation it has to turn over the books and records
of Bright Healthcare be subject to relevance and proportionality limits. That is the
fundamental premise of BHM’s entire argument—that this Court should somehow
limit which Bright Healthcare books and records it must turn over to the SDR.
That premise is false and conflicts with Texas law, the permanent injunction in the Receivership Order, and the MSA. The Receivership Order repeatedly
references Bright Healthcare’s “property.” The books and records that are the subject
of the Order fall squarely within the Texas Insurer Receivership Act’s definition of
“property of the insurer” and “property of the estate,” which includes “ all records
and data that are otherwise the property of the insurer, in whatever form maintained,
within the possession, custody, or control of a managing general agent, third-party
administrator, management company, data processing company, accountant,
attorney, affiliate, or other person.” Tex. Ins. Code §443.004(a)(20)(C) (emphasis
added). Moreover, multiple provisions of the Act obligate BHM to turn over all of
Bright Healthcare’s records to the SDR. See, e.g., Tex. Ins. Code §§
443.010(a)(2)(B) (requiring promptly making available to the SDR books, accounts,
documents, or other records pertaining to the insurer); 443.017(a) (SDR may
immediately take possession of all records of insurer and persons holding such
records required to release them to SDR); 443.151(a) (liquidation order vests
ownership of records in SDR); and 443.154(n) (SDR entitled to take possession of
records). Reflecting those statutory mandates, the Receivership Order requires that
BHM turn over all of that property to the SDR. And through the MSA, BHM
contractually promised to do the same.
All of Bright Healthcare’s books and records—not just those that may be relevant to any particular matter or claim—are subject to statute, the MSA, and the
permanent injunction’s requirement that BHM turn them over to the SDR. Without
all of the books and records, the SDR cannot do his fundamental work of marshalling
assets of Bright Healthcare (including the substantial NeueHealth receivable),
resolving liabilities, and liquidating the company.
CONCLUSION
The Court should deny the stay motion because BHM is required to turn over all of Bright Healthcare’s property to the SDR, and that property includes Bright
Healthcare’s books and records. The statutory, contractual, and injunctive mandates
are not subject to limits of relevance or proportionality as a discovery order might
be. Moreover, BHM has had close to two years to gather and sort those books and
records. The Court should deny the stay motion, end the delay, and allow the SDR
to move forward with his important work.
WHEREFORE, Cantilo & Bennett, LLP, Special Deputy Receiver for Bright Healthcare Insurance Company of Texas, respectfully prays that the Court deny
BHM’s stay motion in these parallel matters.
Respectfully submitted,
By:__________
Jane Webre State Bar No. 21050060 Email: jwebre@scottdoug.com Scott Douglass & McConnico LLP 303 Colorado Street, Suite 2400 Austin, TX 78701
Telephone: (512) 495-6300 Facsimile: (512) 495-6399 Gregory A. Pierce
State Bar No. 15994250
P.O. Box 40
Austin, Texas 78767
Tel: (512) 474-2154
gpierce@gpiercelaw.com Attorneys for Appellee/Real Party in Interest Cantilo & Bennett, L.L.P., Special Deputy Receiver of Bright Healthcare Insurance Company of Texas CERTIFICATE OF SERVICE I certify that this pleading was served on all counsel of record through the electronic filing system on June 30, 2025.
Jane Webre *12 Automated Certificate of eService This automated certificate of service was created by the efiling system.
The filer served this document via email generated by the efiling system
on the date and to the persons listed below. The rules governing
certificates of service have not changed. Filers must still provide a
certificate of service that complies with all applicable rules.
Michaelle Peters on behalf of Jane Webre
Bar No. 21050060
mpeters@scottdoug.com
Envelope ID: 102603869
Filing Code Description: Response
Filing Description: Response to Emergency Motion for Stay
Status as of 6/30/2025 3:54 PM CST
Case Contacts
Name BarNumber Email TimestampSubmitted Status
Michaelle Peters mpeters@scottdoug.com 6/30/2025 3:47:07 PM SENT
Patricia Muniz pmuniz@inquestresources.com 6/30/2025 3:47:07 PM SENT
Brian Falligant bfalligant@inquestresources.com 6/30/2025 3:47:07 PM SENT
Abril Rivera arivera@scottdoug.com 6/30/2025 3:47:07 PM SENT
Associated Case Party: Cantilo & Bennet, LLP as Specialty Deputy Receiver of
Bright Health Insurance Company of Texas
Name BarNumber Email TimestampSubmitted Status
Christopher Fuller 7515500 cfuller@fullerlaw.org 6/30/2025 3:47:07 PM SENT
Jane M. Webre 21050060 jwebre@scottdoug.com 6/30/2025 3:47:07 PM SENT
Gregory Pierce 15994250 gpierce@gpiercelaw.com 6/30/2025 3:47:07 PM SENT
Associated Case Party: Bright Health Management, Inc.
Name BarNumber Email TimestampSubmitted Status
Barbara Chapman BChapman@maynardnexsen.com 6/30/2025 3:47:07 PM SENT
Lauren Feldott lfeldott@maynardnexsen.com 6/30/2025 3:47:07 PM SENT
Carlos R.Soltero CSoltero@MaynardNexsen.com 6/30/2025 3:47:07 PM SENT
Max Mendel mmendel@maynardnexsen.com 6/30/2025 3:47:07 PM SENT
[1] BHM filed a mandamus petition and a parallel interlocutory appeal seeking review of the Order. In its docketing statement in the interlocutory appeal, BHM stated that the basis for appellate jurisdiction is Tex. Civ. Prac. & Rem. Code § 51.014(a)(1), which is the provision authorizing an interlocutory appeal from an order that “appoints a receiver or trustee.” But the Order does not appoint a receiver or trustee. The Receivership Order did that, and BHM did not appeal the Receivership Order or the permanent injunction included in the Receivership Order. That basis for interlocutory appellate jurisdiction is therefore inapplicable, and this Court lacks jurisdiction over the parallel interlocutory appeal. The Court should dismiss it or, at a minimum, require BHM to show cause why it should not be dismissed.
[2] The MSA can be found at 3RR, SDR Ex.2.