LifeCare Says US Can’t Freeze Funds From $320M Carlyle Deal

Law360, Wilmington (June 5, 2013, 4:29 PM EDT) -- LifeCare Holdings Inc. urged a Delaware bankruptcy judge Tuesday to ignore the federal government's attempt to block proceeds from the hospital chain's $320 million sale to Carlyle Group LP from being paid, arguing the U.S. is wrong about who actually owns the money.

LifeCare closed the sale Friday, two months after U.S. Bankruptcy Judge Kevin Gross gave it the green light over the government's objection that the credit bid from the private equity firm leaves the estate unable to pay $24 million in taxes, making it administratively insolvent.

The feds are attempting to overturn the sale by appealing to the U.S....

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