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Post date: September 30 1999

Spitzer Opposes Sale Of Meeth

New York, New York -- State Attorney General Spitzer today filed court papers opposing the sale of all or substantially all of the assets of the Manhattan Eye, Ear & Throat Hospital (MEETH). In papers filed as a Third-Party Complaint, the Attorney General charged MEETH's Board of Directors and Executive Director with breach of fiduciary duty and waste of charitable assets. A motion for a preliminary injunction was also filed to preserve the charitable assets of the hospital and prevent MEETH's Board from closing the facility without the necessary approvals from state regulators.

MEETH -- a 130 year old hospital -- is attempting to sell its facilities located at 210 East 64th Street in Manhattan, which will have the effect of closing the hospital. The Attorney General alleges that MEETH's Board members breached their fiduciary responsibilities by failing to consider in good faith competing offers from Continuum Health Partners, Lenox Hill Hospital and the MEETH doctors themselves, which would allow MEETH to continue as an acute care specialty hospital and thereby fulfill its charitable purpose as mandated by its corporate charter.

The Attorney General has the duty to protect charitable assets for the benefit of all New Yorkers. "The people of New York have an interest in this venerable institution," Spitzer said. "It is my duty to ensure the fair value of MEETH and that any such transaction promotes its not-for-profit health purposes."

As a not-for-profit, charitable institution, MEETH cannot sell all or the majority of its assets unless the State Supreme Court finds the sale is fair and promotes the charitable purposes of the institution's corporate charter. Moreover, prior to closing its operations, MEETH must first gain permission from the State Department of Health (DOH) by submitting a proposed plan of closure. DOH has not approved MEETH's closure.
The Attorney General's opposition to MEETH's petition alleges that it has engaged in de facto closing of the hospital by systematically shutting down the hospital's operation, firing its residents, evicting its doctors and discontinuing and/or limiting the availability of essential services to its patients.

Founded in 1869, MEETH has been devoted exclusively to providing medical services, research and education for the treatment of eye, ear, nose and throat health concerns and for all types of reconstructive and plastic surgery. MEETH, treating more than 80,000 ambulatory patients per year, has been one of the most prestigious medical facilities in the country in its specialized medical fields, and has had an outstanding staff of attending physicians and specialists, residents and nurses and other professionals. MEETH is comprised of its hospital facility located at 210 East 64th Street and an out-patient ambulatory care clinic located at 124th Street in Harlem.

The case is being handled by Section Chiefs Robert Pigott and Paula Gellman, and Assistant Attorney General Sandra Giorno-Tocco of the AG's Charities Bureau, under the direction of Bureau Chief William Josephson, along with Special Counsel Howard Gootkin of the AG's Health Care Bureau.