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Attorney General Precedent For Review
Former Attorney General Frank Kelley first invoked the Attorney General's authority over threatened charitable hospital assets in 1996, challenging the attempted acquisition of the nonprofit Michigan Capital Medical Center by a for-profit joint venture of Columbia Health System. When the parties failed to adequately respond and continued towards a sale, the Attorney General filed a complaint in Ingham County Circuit Court to block the sale. Ultimately, the court blocked the sale, granting Summary Judgment for the Attorney General, ruling that the charitable assets could not be used to generate profits for Columbia.
Against this backdrop, in 2010, nonprofit Detroit Medical Center (DMC) and for-profit Vanguard Health Services sought Attorney General Mike Cox's review of DMC's proposed sale to Vanguard. Moreover, as part of the purchase agreement, the parties required the Attorney General's approval as a condition precedent to the sale. The Attorney General's review was extensive. The Charitable Trust Section led the months-long review and collaborated with other Department attorneys, including the Chief Deputy. The review considered many matters, including reasons for the sale, financial data, and public commentary. The Attorney General also required buyer Vanguard to fund two experts to independently review and value the transaction. Ultimately, the Attorney General issued a lengthy report detailing the review process and conditionally approving the sale.