Attorney General First Information and Documents Request 6/17/10

In formulating your response, organize and refer to responsive materials by paragraph numbers.

 

1.0.  Purchase and Sale Agreement and Related Agreements.

1.1.  The Purchase and Sale Agreement, including all referenced Schedules.

1.2.   All proposed written agreements, letters of intent,

        memoranda of understanding, or other agreements

        entered into or to be entered into by the transacting

        parties which relate to or effectuate any part of the

        proposed transaction.

1.3.   All documents referenced in the agreement as being

        exchanged between the parties including but not limited

        to business agreements, cost reports, plans of corrections,

        etc. referred to in sections 3.16, 3.17, and 3.18.

 

2.0.  Process Review  Outline of the process which determined the

                                   sale and selection of VHS including: 

2.1.   Due diligence documentation.

2.2.   All third party reports including any fairness opinions

         rendered in the transaction and corresponding work papers.

2.3.   Board minutes, committee minutes, correspondence, and

         meeting packages.

2.4.   Minutes and meeting packages of DMC's Finance

         Committee and any other committees or task force

         formed to study the proposed transaction or any similar

         transaction contemplated in the past three years.

2.5.   Financial proformas.

2.6.   Financial projections.

2.7.   Actual historical weekly cash flows.

2.8.   Conflicts reviews, including the name, phone number, and

         occupation of all officers, members of the board of directors,

         trustees, executive and senior level management of the

         transacting parties, including for each position, current

         persons and person holding the position during the last year.

2.9.    Presentations made by DMC to any third party that relate

         to the transaction.

2.10.  Documents related to the creation of the Renaissance

         Zone.

2.11.  Listing of all parties interested in acquiring DMC and a

         summary of information received on the sale opportunity.

2.12.  Documents related to alternatives considered by Detroit

         Medical Center (e.g., offering memoranda or other

         documents sent to potential acquirers, list of potential

         acquirers, etc.).

2.13.  Any bona fide offers to purchase the system, or individual

         Hospitals, within the last three years including bid

         packages.

2.14.  Any consulting studies prepared in the last three years

         related to the financial performance of Detroit Medical

         Center and/or the proposed transaction.

2.15.  DMC's current organizational chart and contact

         information.

2.16.  Outline of proposed organizational structure under VHS.

2.17.  Strategy and agreements to retain existing management

         team.

 

3.0.  Transaction Review

3.1.   Sources and uses of sale proceeds from DMC perspective.

3.2.   Weekly cash flow statements: 26-weeks of actual weekly

        cash flows and 13-weeks of forecast weekly cash flows.  

3.3.   Budgets for current year by location and by department.

3.4.   Complete listings of corporate entities, operating units and

         locations with notations on which will be acquired,

         transferred, disposed, retained or otherwise arranged for.

3.5.   The following historical statistical information for Detroit

         Medical Center by location, by department;  monthly,

         three-year historical, and current year-to-date.

3.5.1. Census, ED visits, discharges, ALOS,

         surgeries and other procedures, clinic

         encounters, imaging procedures by type,

         any other statistical information (e.g.

         births, ICU census).

3.5.2. Detailed staffing levels.

3.5.3. Gross charges and net revenue by payor.

3.6.   Listing of services offered by each hospital.  Include

        services offered that are shared with any other entity,

        community or civic group, or governmental unit.

3.7.   List of all DMC assets and identification of any not

        contemplated as being part of the sale.  Detail any

        plans for disposition or continued operation and

        maintenance of all assets.

3.8.   Documentation regarding any currently existing foundations

        related to DMC including financials, operations, originating

        documents, bylaws, Board of Trustees, and the sources

        and uses of funds.

3.9.   All assumed contracts and agreements related to the

        proposed transaction including but not limited to physician

        agreements, research programs, benefit plans, all contracts

        contemplated in agreement section 3.18, etc.

3.10. Agreements with Wayne State or other educational

        programs regarding GME or other training.

3.11. Any significant existing contracts (employment agreements,

        covenants not to compete, agreements with physician

        groups, supplier agreements, loan or lease agreements,

        labor contracts etc.).

3.12. DMC charitable care policy and procedures.

3.13. Charity care gross charges and costs by service and

        location.

3.14. Outline of all operational programs.

3.15. Outline of planned physician changes, growth and

        reductions.

3.16. Information regarding any governmental contributions or

        support (Federal, State municipal, district or county).

3.17. Financial information related to GME or other educational

        agreements.

3.18. Any current appraisals or valuations of real estate or other

        assets.

3.19. Operating statistics for the last five years (i.e., payor mix,

        utilization statistics).

3.20. Latest interim operating statistics and interim operating

        statistics for the comparable period for the prior year.

3.21. Post-closing plan and information on any surviving DMC

        entities.

 

4.0.  DMC Financial Information and Valuation

4.1.  Audited financial statements and consolidating schedules for

        the last five years for Detroit Medical Center on a consolidated

        basis.

4.2.   Financial statements for the last five years by month for

        each of the Hospitals and Hospital Businesses as defined

        in the Purchase and Sale Agreement, by location, by

        department on an individual and consolidating basis.

4.3.   Latest interim financial statements and interim financial

        statements for the comparable period for the prior year

        by month for each of the Hospitals and Hospital Businesses

        by location, by department on an individual and

        consolidating basis.

4.4.   Current budgets and/or projections for each of the Hospitals

        and Hospital Businesses by location, by department.

4.5.   List of subsidiaries or financial interests in other companies

        or joint ventures and corresponding financial statements for

        the last three years.

4.6.   Listing of any contingent or off-balance sheet liabilities.

4.7.   Listing of any non-operating assets or liabilities.

4.8.   Identify all financial relationships with for-profit entities

        where DMC serves as a source of funds or is allocated

        a share of profit/loss.  Include financial statements for

        three years for any identified entity.

4.9.   Accounts payable agings by vendor for the current month

        and previous three fiscal year ends.

4.10. Accounts receivable agings by payor for the current month

        and previous three fiscal year ends.

4.11. Background and operating performance information on

        captive insurance company.

4.12. Details on the defined benefit plan to include historical

        payments and current actuarial estimates.

4.13. Information on other employee benefit programs including

        retirement plans, 401K plans, insurance, PTO and any

        deferred compensation.

 

5.0.    Vanguard

5.1.   Monthly income statements, balance sheets, and cash flow

         statements for the current year and the past three years.

5.2.   Current budgets and financial projections for Vanguard

         Health Systems.

5.3.   Detailed capital expenditure budgets and projections.

5.4.   Summary of debt obligations and related financial

         covenants, maturities, etc.

5.5.   List of all prior non-profit acquisitions.

5.6.   Corporate and personnel organizational structure for the

         proposed VHS/DMC operation including any proposed

         organizational charts, location changes and currently

         identified managers.

5.7.   Proposed roles for DMC senior management personnel

         including any current senior management whose distinct

         role has not been identified, any senior management roles

         that are being filled by non-DMC personnel, and any roles

         that are necessary that have not been allocated to a

        specific person. 

5.8.   Proposed method(s) for monitoring levels and types of

        service, charity care levels, and any other contemplated

        commitments.

5.9.   Financial projections and feasibility studies regarding the

        operation of VHS/DMC.

5.10. Summary of future capital commitments by location, by

        service line.

5.11. Sources and uses of funds analysis.

5.12. Any pro forma analyses prepared in connection with the

        proposed transaction.

5.13. Credit analyst reports on Vanguard.

5.14. Ratings agency reports on Vanguard.

5.15. Any recent consulting studies rendered on the financial

         performance of Vanguard.

5.16. Any strategic plans for Vanguard Health Systems.

5.17. List of other proposed or contemplated acquisitions in the

         next five years.

 

6.0.  Foundation

6.1.  For the proposed conversion of corporate DMC to a

        foundation, any documentation regarding its restructuring,

        amended or restated corporate documents, and

        proposed operation.

6.2.   Investment policies.

6.3.   Grant mandates.

6.4.   Documents that will identify the amounts and purposes of all

        board designated and donor restricted assets to be retained

        and held by the foundation.

6.5.   Accountings for all restricted and board designated

        charitable assets for the three years preceding the

        Purchase and Sale Agreement including, but not

        limited to, endowments, restricted, unrestricted,

        and specific purpose funds as each relates to the

        Purchase and Sale Agreement, whether held by DMC,

        an affiliated foundation, or any independently held trusts.  

6.6.  Governance and Board of Trustees outline.

6.7.  Plan for transferring or disposing of charitable assets.