Review of Caritas transfer begins with formal filing of sale
May. 6, 2010
A for-profit equity firm’s proposal to acquire Caritas Christi, the Catholic hospital network that owns and operates the Carney and five other hospitals, was formally filed Thursday with the state attorney general’s office, launching a review process that will include a hearing on the proposal in Dorchester.
Under state law, any transfer of a non-profit acute care hospital to a for-profit entity requires the review of the attorney general’s office. The Supreme Judicial Court, the state’s highest court, Catholic church officials and the state Department of Public Health will also have to sign off on the $830 million deal with Cerberus Capital Management LP for it to go ahead.
The hearing in Dorchester, along with five others in the communities served by Caritas hospitals, will be scheduled at a later date.
In a release, Attorney General Martha Coakley’s office said the review would take “a number of months.” Coakley’s office has set up a website for its review of the deal, located at: www.mass.gov/ago/caritas.
Coakley’s review will include a look at how the deal squares with applicable non-profit and charities law; procedural due care; management of conflict of interests; fair and reasonable compensation; and the public interest.
In its filing with Coakley’s office, the firm representing Caritas, McDermott, Will and Emery, said the deal will give the Caritas system the ability to fund capital projects and other expenditures.
Ralph de la Torre, the head of the Caritas system, told the Reporter last month that the Carney could see up to $20 million in capital investment. According to the filing on initial capital projects, Carney would receive a $10.2 million operating room.
Overall, $400 million will be spent across the system within four years of the deal’s approval, including $110 million in facility improvements will allow the Caritas system to "provide state-of-the-art facilities to some of the poorest communities in Massachusetts,” according to the filing.
The improvements are expected to bring between 3,000 to 4,000 new construction jobs.
The deal also “guarantees that Carney, along with each of the Caritas hospitals, will continue to operate as a general acute care hospital for at least three years,” the filing says.
Caritas employs 12,000 people and serves three million individuals.
Check in with DotNews.com for further developments on the Caritas-Cerberus deal.