Exempla Update: Arbitrator Vetoes Hospital Sale

Last week, Arbitrator William Meyer ruled that the Community First Foundation (formerly Lutheran Hospital Foundation) could not transfer for money or other consideration its interest in the Exempla Joint Venture. He thus stopped the $311 million sale to the Kansas-based Sisters of Charity of Leavenworth, which first had been publicly proposed in October 2007. He also ruled that should Sisters of Charity gain control of Lutheran Hospital, state law did not preclude it from instituting restrictions on the services to be provided as many Catholic hospitals do.

It is unclear what the next steps, if any, will be. There is a citizens suit pending in Boulder against the transaction, which has been stayed pending the outcome of the arbitration. Since the plaintiffs in that case were not parties to the arbitration, the plaintiffs in the Boulder case are not legally bound by the outcome of the arbitration. Lawyers for all parties in the arbitration and suit are evaluating the arbitrator's decision.

The Denver Post reported on the arbitration ruling here.