Exhibit 2.1

             MAGELLAN HEALTH SERVICES RECEIVES FINAL COURT APPROVAL
                              IN CHAPTER 11 PROCESS
             -- Bankruptcy Court Confirms Plan of Reorganization --

COLUMBIA, Md. - October 8, 2003 - Magellan Health Services, Inc. (OCBB: MGLH)
today announced that the U.S. Bankruptcy Court for the Southern District of New
York entered an order confirming the Company's Third Amended Plan of
Reorganization, as modified. The Company's Plan of Reorganization received
overwhelming support from the Company's unsecured creditors and, at its
confirmation hearing today, the Court ruled that Magellan had met all of the
statutory requirements necessary for confirmation of its Plan of Reorganization.
The Company expects to consummate the reorganization during the fourth quarter.

Steven J. Shulman, chief executive officer of Magellan, said, "This is a great
day for Magellan. We appreciate the strong support our creditors, lenders and
new investors have demonstrated for Magellan and our Plan of Reorganization. We
also are grateful for the loyalty of our customers, members, providers and other
vendors, and for the outstanding efforts of our employees in ensuring that our
business continued to operate smoothly throughout our bankruptcy process. As a
result of this enormous and extremely successful effort, we are supremely
confident of our ability to achieve new goals. We are excited to focus our full
energies on our future as the `new Magellan,' delivering unparalleled service,
strength and solutions to all of our stakeholders."


Mark S. Demilio, chief financial officer, said, "Having reduced Magellan's debt
by approximately $600 million and attracted $150 million in new equity, Magellan
will exit Chapter 11 with a significantly strengthened capital structure that
will enable the Company to continue to enhance its market leadership position.
Further, we have the support of highly respected and sophisticated investors and
financial partners, such as Onex, who have demonstrated their confidence in the
Company and its prospects for the future."

"In just seven months, the nation's largest behavioral managed healthcare
company has successfully addressed its financial challenges and positioned
itself strongly for the future," said Robert Le Blanc, managing director of
Onex. "Magellan has a strong and profitable business model and an accomplished
management team and we are very pleased to be partnering with the Company to
realize its full potential in the future." As disclosed previously, Onex
Corporation will be making an equity investment in reorganized Magellan as part
of the Company's Plan of Reorganization.

Consummation of the Company's reorganization is subject to certain regulatory
approvals, including those required under the Hart-Scott-Rodino Act, and other
customary conditions.

About Magellan: Headquartered in Columbia, Md., Magellan Health Services (OCBB:
MGLH), is the country's leading behavioral managed care organization. Its
customers include health plans, corporations and government agencies.

Safe Harbor Statement: Certain of the statements made in this document including
the consummation of the Plan of Reorganization and success of any restructuring
constitute forward-looking statements contemplated under the Private Securities
Litigation Reform Act of 1995. These forward-looking statements are subject to
known and unknown uncertainties and risks which could cause actual results to
differ materially from those contemplated or implied by such forward-looking
statements including: ability to obtain all required regulatory approvals and to
satisfy all other conditions to consummation of the Plan of Reorganization,
service issues arising with certain customers, terminations by customers,
operating results or cash flows differing from those contemplated or implied by
such forward-looking statements, the impact of new or amended laws or
regulations, governmental inquiries, outcome of ongoing litigation, interest
rate increases, unanticipated increases in the costs of care and other factors.
Any forward-looking statements made in this document are also qualified in their
entirety by these risks and the complete discussion of risks set forth under the
caption "Cautionary Statements" in Magellan's Transition Report on Form 10-K for
the transition period from October 1, 2002 to December 31, 2002 filed with the
Securities and Exchange Commission on August 12, 2003.


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BONDHOLDER CONTACT:
Bill Forrest
Gleacher Partners, LLC
212-418-4200


SHAREHOLDER CONTACT:
Melissa Rose
410-953-1218


MEDIA CONTACT:
Erin Somers
410-953-2405