In making a decision whether to object to a proposed public benefit hospital conveyance transaction, the attorney general and reporter shall consider:

(1) Whether the public benefit hospital entity will receive full and fair market value for its charitable or social welfare assets;
non profit

Need help reviewing 501c forms?
Have it reviewed by a lawyer, get answers to your questions and move forward with confidence.
Connect with a lawyer now

Terms Used In Tennessee Code 48-68-206

  • Acquiring entity: means the person who gains ownership or control of a public benefit hospital entity as a result of a public benefit hospital conveyance transaction. See Tennessee Code 48-68-202
  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Contract: A legal written agreement that becomes binding when signed.
  • Directors: means natural persons, designated in the charter or bylaws or elected or appointed by the incorporators, and their successors and natural persons elected or appointed to act as members of the board, irrespective of the names or titles by which such persons are described. See Tennessee Code 48-51-201
  • Entity: includes the following, whether foreign or domestic: LLCs. See Tennessee Code 48-202-101
  • Fair market value: The price at which an asset would change hands in a transaction between a willing, informed buyer and a willing, informed seller.
  • Fiduciary: A trustee, executor, or administrator.
  • Governing body: means the board of governors in the case of a board-managed LLC, the members in the case of a member-managed LLC, and the board of directors in the case of a corporation. See Tennessee Code 48-202-101
  • Interest: means either or both of the following rights under the organic law of an unincorporated entity:
    (A) The right to receive distributions from the entity either in the ordinary course or upon liquidation. See Tennessee Code 48-11-201
  • Person: means any individual, partnership, trust, estate, corporation, association, joint venture, joint stock company or other organization. See Tennessee Code 48-68-202
  • Public benefit hospital conveyance transaction: includes any transaction described in subdivision (3)(A)(i) or (3)(A)(ii) that is entered into by the public benefit hospital entity or by any entity that controls, is controlled by or is under common control with such public benefit hospital entity. See Tennessee Code 48-68-202
  • Public benefit hospital entity: means any public benefit corporation, as defined in chapter 51, part 2 of this title, or any governmental entity that is licensed as a hospital under title 68, chapter 11, part 2, or considered a hospital under title 33, chapter 1, including entities affiliated with any of these through ownership, governance, or membership, such as a holding company or subsidiary. See Tennessee Code 48-68-202
  • Reporter: Makes a record of court proceedings and prepares a transcript, and also publishes the court's opinions or decisions (in the courts of appeals).
  • Representative: means a governor, manager, employee or other agent of a foreign LLC. See Tennessee Code 48-202-101
(2) Whether the fair market value of the public benefit hospital entity‘s assets to be transferred has been manipulated by the actions of the parties in a manner that causes the fair market value of the assets to decrease;
(3) Whether the proceeds of the proposed public benefit hospital conveyance transaction will be used consistent with the trust under which the assets are held by the public benefit hospital entity;
(4) Whether the proceeds are used by a county or municipality for general or special revenue obligations not expressly provided for when the hospital was established;
(5) Whether the proceeds will be controlled as funds independently of the acquiring or related entities; provided, however, no proceeds shall be returned to any county or municipal government except to the extent necessary to pay lawful obligations to such county or municipal government;
(6) Whether the proposed public benefit hospital conveyance transaction will result in a breach of fiduciary duty, as determined by the attorney general and reporter, including conflicts of interest related to payments or benefits to officers, directors, board members, executives and experts employed or retained by the parties;
(7) Whether the governing body of the public benefit hospital entity exercised due diligence in deciding to dispose of the public benefit hospital entity’s assets, selecting the acquiring entity, and negotiating the terms and conditions of the disposition;
(8) Whether the public benefit hospital conveyance transaction will result in private inurement to any person;
(9) Whether health care providers will be offered the opportunity to invest or own an interest in the acquiring entity or a related party, and whether procedures or safeguards are in place to avoid conflict of interest in patient referrals;
(10) Whether the terms of any management or services contract negotiated in conjunction with the proposed public benefit hospital conveyance transaction are reasonable;
(11) Whether any foundation established to hold the proceeds of the public benefit hospital conveyance transaction will be broadly based in the community and be representative of the affected community, taking into consideration the structure and governance of the foundation;
(12) Whether the attorney general and reporter has been provided with sufficient information and data by the public benefit hospital entity to adequately evaluate the proposed public benefit hospital conveyance transaction or the effects of the transaction on the public; provided, that the attorney general and reporter has notified the public benefit hospital entity or the acquiring entity of any inadequacy of the information or data and has provided a reasonable opportunity to remedy the inadequacy; and
(13) Any other criteria the attorney general and reporter considers necessary to determine whether the public benefit hospital entity will receive full and fair market value for its assets to be transferred, as required in rules adopted by the attorney general and reporter under § 48-68-208.
  Previous section
Next section  
 Part 2 Contents