Sale of Boston Catholic hospitals to private firm wins approval
CWN - October 07, 2010
The attorney general of Massachusetts has approved the sale of Boston’s Catholic health-care system to a private corporation that will convert the 6-hospital system into a for-profit venture.
Attorney General Martha Coakley gave her approval to the sale of the Caritas Christi system to Cerberus Capital Management, a New York-based investment firm, after the both parties agreed to modify a proposed purchase agreement, adding conditions to ensure the continued operation of all six hospitals for at least five years. The attorney general’s recommendation will be submitted to the state’s highest court, which must give final approval to the sale.
The Boston archdiocese has pressed for the sale of the Caritas Christi system, which faced enormous financial pressures from an unfunded pension program. The purchase agreement requires the new management to maintain the Catholic identity of the hospitals. However, a little-noted provision of the agreement allows the buyers to terminate that Catholic identity if, in their view, it becomes materially burdensome. Exercising that termination clause would require the Cerberus management to pay an additional $25 million, on top of the overall purchase price of $895 million.
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