LANSING, Mich. (Legal Newsline) - Michigan Attorney General Bill Schuette has approved the proposed sale of Marquette General Hospital to Duke Lifepoint LLC.
In a formal report released Thursday, Schuette concluded that Marquette's board of trustees "fulfilled its fiduciary duties, thereby preserving the hospital's charitable assets and interests."
Both parties had conditioned the sale on the attorney general's approval.
But before giving it the OK, Schuette assigned an eight-person review team to examine the proposed sale and retained independent experts to value the hospital's assets and review the sale process.
He also required the parties to include additional measures to protect the public interest, including:
- Duke Lifepoint must pay an additional $8 million toward the Marquette General Foundation, which will be renamed the Superior Health Foundation; a total of $23 million will now proceed to the foundation;
- Superior Health Foundation must reserve $1 million for enforcement purposes;
- Duke Lifepoint must provide Superior Health Foundation with detailed, periodic reports and other requested information regarding hospital operations for at least 10 years; and
- The parties must recognize Schuette's "continuing authority" to enforce the terms of the sale, including Duke Lifepoint's promises to provide charity care, continue core services and invest capital.
In addition, the attorney general, who approved the foundation's dual purpose, is allowed to designate a board member.
The sale of Marquette General Hospital, an Upper Peninsula nonprofit health care system, is valued at a total of $483 million.
According to Schuette's office, the sale allows the hospital to pay off its significant liabilities, including more than $100 million in long-term debts and unfunded pension liabilities.
It also provides $23 million to the Superior Health Foundation. The foundation will monitor and enforce Duke Lifepoint's promises, the attorney general explained.
The sale also provides hundreds of millions for hospital projects over the next 10 years. This allows the hospital to recruit physicians, preserve core services and improve quality, Schuette said.
"This deal will ensure continued access to quality health care for the people of Marquette," the attorney general said in a statement.
During its comprehensive review of the sale, Schuette's team focused on the "due diligence" of Marquette's board of trustees and the "overall fairness" of the sale.
The review team also directed the work of experts at Stout Risius Ross, a premier financial advisory firm that specializes in investment banking, valuation and financial opinions.
Schuette noted that the firm, which has an office in Detroit, was engaged at "no cost to taxpayers."
From Legal Newsline: Reach Jessica Karmasek by email at email@example.com.