Tennessee § 48-68-206 - Considerations in making decision regarding proposed transaction.

§ 48-68-206. Considerations in making decision regarding proposed transaction.

In making a decision whether to object to a proposed public benefit hospital conveyance transaction, the attorney general and reporter shall consider: Whether the public benefit hospital entity will receive full and fair market value for its charitable or social welfare assets; 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; 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; 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; 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; 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; 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; Whether the public benefit hospital conveyance transaction will result in private inurement to any person; 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; Whether the terms of any management or services contract negotiated in conjunction with the proposed public benefit hospital conveyance transaction are reasonable; 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; 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 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. Acts 2006, ch. 930, § 7; 2012, ch. 929, §§ 1, 2. Compiler's Notes. Acts 2006, ch. 930, § 14 provided that a sale, lease, exchange or other disposition of any assets by an entity that was required to give notice to the attorney general and reporter prior to such sale, lease, exchange or other disposition before the enactment of this act shall be governed by the law in effect when such notice was sent. Acts 2012, ch. 929, § 3 provided that a sale, lease, exchange or other disposition of any assets by an entity which was required to give notice to the attorney general prior to such sale, lease, exchange or other disposition before May 10, 2012, shall be governed by the law in effect when such notice was sent.