The New York State Attorney General (the ”AG”) recently issued new standards of review for the sale of all or substantially all assets of not-for-profit nursing homes which should be of keen interest to both not-for-profit providers and prospective for-profit purchasers.  See http://www.charitiesnys.com/pdfs/NursingHomeSales.pdf (the “Guidance”). After noting the significant increase in efforts to sell nonprofit nursing homes to for-profit entities since 2014 in New York, the Guidance expresses “significant concern”  regarding the “effort and success” by not-for-profit Boards of Directors and their advisors in evaluating whether the terms of the sale or transfer, and the intended use of the proceeds of the sale, will “promote the mission and purposes “ of the charity.  The Guidance recommends “best practices” for nursing home Boards and their advisors in considering a sale to assist them in the exercise of their fiduciary duties to charitable beneficiaries, including nursing home residents.

It also sets forth specific new factual representations that the AG will require to be made by the seller seeking approval of the sale of all or substantially all nursing home assets. Not-for-profit providers in New York State and any entity interested in a transfer of the assets of such providers are well advised to seek legal, financial and other professional assistance to prepare for the due diligence now required by the Guidance.

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Photo of Stephanie Marcantonio Stephanie Marcantonio

Stephanie Marcantonio is a partner at Crowell & Moring’s New York office. Stephanie advises health care providers, payers, and tax-exempt entities on corporate, transactional, regulatory, and governance matters, including structuring and negotiating acquisitions, divestitures, and joint ventures. She also represents lenders and borrowers in health care financings, and has acted as regulatory counsel to lenders such as Credit Suisse, Deutsche Bank, J.P. Morgan, and Morgan Stanley in connection with numerous nine- and 10-figure financings of nursing facilities, assisted-living facilities, and other health care providers, and the related securitizations.

 

Photo of Paul Mourning Paul Mourning

Paul Mourning is a partner in the New York office of Crowell & Moring. Paul has a multidimensional practice focused on health care and nonprofit organizations, particularly relating to corporate, regulatory, and transactional matters. Clients include acute care, residential long-term care, home care, and hospice providers, as well as managed care and other health insurance organizations. Paul has served as National Legal Counsel to The Salvation Army for many years. He advises a variety of tax-exempt clients in a number of service areas, including religious organizations, foundations, educational institutions, museums, social service agencies, and trade associations.

 

Photo of Kathy H. Chin Kathy H. Chin

Kathy Hirata Chin is a partner at Crowell & Moring’s New York office. Kathy concentrates her practice in health care and real estate litigation. Kathy has successfully represented individual health care providers and associations of such providers in challenges to actions taken by state and federal agencies, including multiple suits regarding Medicaid reimbursement issues. Kathy has also defended an international dialysis services provider against RICO claims in federal court based on allegedly fraudulent billing activity; represented a pharmaceutical services provider in a billing dispute with a chain of nursing homes; defended home health agencies in suits brought by employees pursuant to the Fair Labor Standards Act; and represented other providers and associations of providers as plaintiffs and defendants in a variety of matters in federal and state court involving issues ranging from contract interpretation to cash receipts assessments to the federal Individuals with Disabilities Education Act.

 

Photo of Jared Facher Jared Facher

Jared L. Facher is a senior counsel in the New York office of Crowell & Moring and is in the Health Care Group. Jared’s practice focuses on representing health care organizations, insurance companies, for-profit and tax-exempt entities in a wide array of litigation, transactional and regulatory matters. His practice includes advising clients with respect to health care fraud and abuse issues and reimbursement matters, as well as representing providers in government audits and investigations. Prior to beginning his law career, Jared was a practicing physical therapist.

 

Photo of Marsena Farris Marsena Farris

Marsena Farris is a counsel in the New York office and a member of Crowell & Moring’s Health Care Group. Her practice focuses on the representation of nonprofit entities such as foundations, religious organizations, and health care providers licensed as home health agencies, hospices, assisted living facilities, continuing care retirement communities, nursing homes and managed care organizations.

 

Photo of Pamela Landman Pamela Landman

Pamela Landman is a senior counsel in the New York office and is a member of Crowell & Moring’s Health Care Group. Her practice focuses on corporate governance, transactional, employment, and compliance matters involving charitable, religious, educational, and health care organizations.  Her practice includes the structuring and negotiation of sophisticated transactions for health care providers and tax-exempt entities, including acquisitions, joint ventures, development projects, and asset purchases and sales.