An arbitration judge has ruled that a foundation cannot sell its sponsorship of Denver-based Exempla Healthcare to a Catholic health system.
In September 2006, Community First Foundation of Arvada, Colo., sought to sell its sponsorship agreement in Exempla to the hospital systems other sponsor, the Sisters of Charity of Leavenworth Health System, Lenexa, Kan., for $311 million. Exempla sued, arguing that the transfer was illegal under rules for not-for-profit entities and a breach of Exemplas fiduciary duties.
It would have, in effect, given total control of the system to Sisters of Charity and make all our hospitals Catholic, said Exempla CEO Jeff Selberg.
The judge ruled that Community First Foundation could transfer its sponsorship to Sisters of Charity, but for no monetary sum.
In light of the arbitrators stipulation that no value can be assigned to the transfer, the leadership of both organizations is working diligently to determine next steps, according to a joint statement from the foundation and Sisters of Charity. The sponsors remain united in their view that the membership transfer is necessary to maintain the vitality of Exempla hospitals and support critical services in the broader Denver metropolitan community.