Pennsylvania Attorney General Mike Fisher has asked the Orphans Court in Philadelphia to approve the transfer of charitable assets of Allegheny Health, Education and Research Foundation's Philadelphia operations to two new not-for-profit corporations as part of AHERF's bankruptcy sale to for-profit Tenet Healthcare Corp.
By supporting the charitable asset transfer plan, Fisher removed his office as one of the last impediments to completing the bankruptcy sale.
At deadline, Orphans Court Judge Petrese Tucker had yet to sign an order approving the arrangement between Santa Barbara, Calif.-based Tenet and Fisher's office. She's expected to do so by Nov. 10, when Tenet's $345 million bid for AHERF's Philadelphia operations should close.
At issue are $50 million to $168 million in charitable assets controlled by the Allegheny University of the Health Sciences, and $22 million to $25 million in charitable assets belonging to the eight Philadelphia hospitals Tenet is buying. Final figures won't be known until financial audits are completed.
Fisher previously sought to have state review of the disposition of the charitable assets made a legal condition of sale. But U.S. Bankruptcy Court Judge Bruce McCullough rejected Fisher's pleas on Oct. 30. On Nov. 3 he approved a compromise charitable assets agreement hammered out between Tenet and Fisher's office. The attorney general then said he would not appeal McCullough's prior ruling that the U.S. Bankruptcy Court had "exclusive jurisdiction" over the asset transfer.
An appeal could have torpedoed the deal by stretching the completion date beyond AHERF's financial ability to continue operating the bankrupt facilities. The attorney general previously maintained that McCullough's stand could set a dangerous precedent by overriding state laws requiring the attorney general and Orphans Court to review the transfer of charitable assets.