By Eddie Burkhalter, Appleseed Researcher
Medical workers inside Alabama prisons who were employed by the embattled company YesCare haven’t received their last paychecks, and the Alabama Department of Corrections is predicting “protracted litigation,” over millions of taxpayer dollars at issue following the sudden termination of the billion-dollar contract.
The hardship falling upon those prison health care workers comes despite the Alabama Department of Corrections (ADOC) having paid YesCare a final payment of $11 million in April with a “verbal agreement” that the money would be used to pay employee payrolls. That didn’t happen, leaving workers having to make difficult financial decisions for themselves and their families.
At Bullock Correctional Facility, nurses on all three shifts went on strike Tuesday, and although some returned to work Wednesday, one worker who did not return to the prison told Appleseed she’d remain at home until she received her pay. Most of those former YesCare workers are now employed by NaphCare, the Birmingham-based company that finalized an emergency contract with ADOC on April 30 to provide medical and mental health care in the state’s prisons.
Healthcare workers have been on strike at Bullock County prison because of unpaid labor.
The nurse told Appleseed on Wednesday that she hasn’t received a paycheck in almost a month.
“It’s taking everything you have in this economy to ‘stay above water’ and you miss a paycheck most of us are going to drown. As a result I have had to defer bills and incur unnecessary debt,” she said. “Gasoline is almost $5 a gallon and I have a 45 minute drive to work, and they expect us to still report to work and remain loyal to the cause.”
The state of Alabama should pay the workers, she said, and “should be held responsible for appointing these unreliable contractors who misuse the funds and are allowed to file bankruptcy and operate under a different name.”
In a statement from ADOC’s general counsel, Mary-Coleman Roberts, obtained by Appleseed, the department says YesCare failed to honor an agreement to pay the workers their last paychecks, and warns of possible litigation. The statement also includes a response from YesCare’s chief restructuring officer David Goldwasser.
“As a reminder, ADOC’s last payment to YesCare was made the week of April 20th with the express verbal agreement that YesCare would use that money to make the last two payrolls on April 24th and May 8th. Obviously, that did not happen. When I asked what the ADOC’s $11 million payment was used for, Mr. Goldwasser would only say that it was used for ‘emergency operations.’ This answer certainly does not sit well with the ADOC, and we will continue exploring all remedies available to us to assist with this payroll issue and the issue of outstanding debts to community providers. That said, we now believe this will likely result in protracted litigation and, unfortunately, there are no guarantees in litigation,” Roberts’ statement reads in part.
The logo for the bankrupt corporation whose employees have not been paid in weeks.
NaphCare said in a statement to Appleseed that the company is taking steps to help the impacted employees. The company filed a motion on Wednesday with a Florida bankruptcy court supporting YesCare’s request to pay its former employees using money set aside as collateral in YesCare’s bankruptcy proceedings.
“NaphCare will continue advocating to ensure our employees receive every dollar of compensation owed to them by YesCare. ADOC paid YesCare’s final invoice based on YesCare’s commitment to fulfill payroll obligations as part of the transition process. YesCare must honor that commitment, and we hope that the bankruptcy court will promptly approve YesCare’s motion to help ensure payment is made without further delay to the hundreds of healthcare workers across multiple states who are still awaiting compensation,” NaphCare’s statement reads.
NaphCare also implemented a $1,000 signing bonus, recognized employee paid leave balances from their time at YesCare and allows employees to access up to 70 percent of their pay prior to scheduled payroll dates.
Naphcare CEO Brad McLane added: “I believe our contract is on solid legal ground as a needed emergency contract.”
“ADOC should be commended for acting quickly, not criticized. If not for the swift action of the agency this would have been a humanitarian crisis beyond reckoning,” McLane said.
“There’s got to be a better process”
The financial meltdown has been years in the making. One key lawmaker warned that the $1.03 billion Alabama contract seemed shaky, but the state forged ahead.
New York City-based private equity firm Perigrove 1018, LLC, led by Isaac Lefkowitz, in December 2021 bought Corizon Health Inc., once the largest prison health care company in the U.S., which was facing more than $775 million in wrongful death and medical malpractice lawsuits.
Within months of acquiring Corizon, Lefkowitz and his ownership team used a controversial legal maneuver that’s been called the “Texas two-step” to saddle about $185 million of the company’s debt with a newly formed company, Tehum Care Services Inc., Bloomberg Law reported, and yet another newly formed company by Corizon, called YesCare, received the $1 billion contract to provide the Alabama Department of Corrections with medical service inside the state’s prisons. Tehum filed for Chapter 11 bankruptcy in February 2023.
According to Tehum’s bankruptcy settlement approximately $50 million was to be paid by YesCare and its subsidiaries, Bloomberg reported, but the company led by Lefkowitz, whom in bankruptcy court documents is listed as the directors of both Tehum and YesCare, in September 2025 began missing those payments. A total of five missed payments resulted in $5.7 million unpaid by YesCare, court records show. The victim creditor trusts, which were to be paid the money, declared default.
“But on May 8, the businesses built from Corizon’s rescued assets—YesCare Corp. and several affiliates—fell into Chapter 11, capping off years of litigation and financial struggles. The bankruptcy raises questions about the effectiveness of the legal strategy known as the Texas Two-Step, and whether incarcerated creditors may ever get paid,” Bloomberg Law reported.
Lefkowitz has in remarks disparaged incarcerated people whom his companies are contracted to care for, according to court records reported by Business Insider.
“These tort claimants are criminals, right; they’re in jail?” Lefkowitz said during a deposition, Business Insider reported. “These are criminals that file fictitious claims.”
Rep. Chris England in meetings prior to ADOC entering into the $1 billion contract with YesCare warned that the company, which previously had a contract with ADOC when it was called Corizon, was on shaky grounds and would likely fail to meet the terms of the new contract. England explained to Appleseed on Wednesday that his predictions were correct and his warnings should have been heeded.
“There’s got to be a better process where there’s more oversight, so we don’t enter into contracts with companies like YesCare again,” England said. “The Department of Corrections should not be able to enter into, negotiate contracts without some additional involvement or third party oversight to keep us from situations like this.”
Rep. Chris England has consistently scrutinized ADOC contracts and first raised concerns about YesCare’s viability in 2023.
England also expressed concern for the unpaid workers.
“They sacrificed as much as they have to care for people who are incarcerated. It should be commended and not forgotten. The state of Alabama should do whatever is necessary to make sure that they get those last two paychecks. No words to say how much we appreciate that sacrifice,” England said. “But at the same time, the state of Alabama, the Department of Corrections owes you better to not enter into deals with companies that are already insolvent, working through lawsuits all over the country, and only for us to pretend like this wasn’t foreseeable.”
On May 15, as the workers were dealing with another pay period with no pay, Goldwasser, YesCare’s Chief Restructuring Officer, sent a memo to employees across multiple states.
“To the providers, nurses, medical staff, and operations teams who have continued to show up for patients this week — I see you. The customers we serve see you. Our clinical work has not stopped, and that is because of you, doing your job under conditions no one should have to work under. You are the reason this company is worth saving, and it is the reason I am here doing this. I’m sorry you are going through this. I won’t insult you by saying anything more than that.”
His words were not persuasive to the nurse at Bullock Correctional.
“I have never experienced anything like this my entire 26 years of nursing. Working hard. Showing up. Doing what you are supposed to do, then having to beg for pay you have already earned, borrow money, and trying to explain to your family why bills can’t get paid?,” she said. “It strips away dignity and this entire situation is humiliating.”
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