Governance / Not for Profit

Client: Community-based hospital

Situation: Client separating from larger health care system

  • Three hospital health care system disaffiliating
  • Client was smallest of three entities, disproportionately reliant on parent organization
  • Constituent organizations built and maintained joint data center and technology platform, which needed to be divided to enable disaffiliation
  • Parent organization insisted upon payment of outstanding inter-company indebtedness
  • All negotiations made more complex because some negotiations were among former health system entities, and some were between the former health system and its chosen outsource vendor

Legal issues:

  • Former parent effectively threatens ongoing viability of client’s IT infrastructure and potentially its ability to provide patient care
  • Client need to negotiate division of assets and phase out of existing IT infrastructure and support from former parent organization
  • Need to negotiate with vendor to outsource data center operations
  • Negotiations were made more complex because some negotiations were adversarial among the disaffiliating partners
  • Client needed to independently replace hardware and software platform, including
  • license clinical, financial, radiology, laboratory and departmental systems
  • Need to negotiate with parent transitional arrangements pending cut over to negotiated systems pending go-live of its new IT infrastructure
  • System transition could not impair patient care or ability of client to bill and collect for its services

Legal solutions/strategies:

  • Collaborate with health system team on negotiation of replacement outsourced data center meeting all IT needs
  • Negotiate with outsource vendor for specific client needs
  • Negotiate with software providers for clinical and financial IT licenses on an urgent basis to implement new platform
  • Negotiate with former parent organization for temporary continuance of access to former data and support platform during transition to new platform

Outcome:

Successful implementation of new IT infrastructure

 


 

Client: Financially-challenged hospital

Situation: Hospital facing unanticipated $15 million exposure

  • 10-year-old GL claim being defended by hospital’s former GL carrier
  • Transition in hospital’s risk management department resulted in loss of institutional memory and records regarding claim
  • Client unaware that hospital excess carrier disclaimed coverage
  • Client unaware that insurance counsel lost trial as to liability
  • Insurance counsel contacted hospital for at end of damages trial — and on the day before a holiday weekend — to obtain client funds for settlement
  • Based upon available information, client refused to provide funds; attorney lost damages trial, resulting in $15M exposure

Legal issues:

  • Need to reassert active oversight of matter through engagement of experienced trial and insurance coverage counsel
  • Need to persuade excess coverage carrier of their inability to disclaim coverage in order to reduce client exposure

Legal solution/strategy:

  • Reconstruct claim history
  • Engage new counsel and develop legal strategy
  • Address excess carrier’s untenable position and convince all of client’s inability to contribute to settlement

Outcome:

  • Excess carrier was brought to table and assumed liability
  • Case was settled with no out of pocket expense for client
 


 

Client: Community-based not-for-profit/religious organization

Situation: Client displaced from home, unable to further its mission

  • Client has owned property for over 50 years
  • Property was only asset
  • Building destroyed by fire, insurance unavailable

Legal Issues:

  • Client had allowed intellectual infrastructure to become seriously outdated
  • Property subject to various government sanctions
  • Client had limited access to potential donors
  • Client needs to partner with developer to redevelop property and rebuild

Legal Solution/Strategy:

  • Update governance documents, including bylaws and investment policies
  • Resolve outstanding citations and real estate tax exemption issues
  • Recruit team and create strategy to redevelop property so it can both house client’s mission and provide a sustainable income stream to client
  • Reach out to potential funders

Outcome:

Project ongoing.

 


 

Client: Hospital in medically-underserved community

Situation: Financially unstable hospital needed to finance acquisition of new diagnostic equipment

  • Limited ability to raise capital through usual means (e.g. bonds)
  • Received multiple New York City Council capital allocations, which remained unfunded

Legal issues:

  • Inefficient City processes delayed urgently-needed capital funding for years
  • Regulators required client to own and possess equipment prior to drawing funding
  • Interim unsecured equipment financing required
  • Acquisition and equipment maintenance agreements required

Legal solution/strategy:

  • Anticipate City needs and rigidly organize all submissions to proactively address NYC concerns
  • Negotiate equipment acquisition, financing and support agreements with vendor
  • Ensure that vendor needs were met by initially securing the loans and client needs met by an early release of lien in order to satisfy City

Outcomes:

  • Client deployed sophisticated medical equipment to help its inner-city patients


 

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