Hospital Closings and Restricted Assets

Position Paper

Muhlenberg Regional Medical Center,

Plainfield, New Jersey

June 11, 2010

On behalf of the Public Interest, we respectfully request that the New Jersey Attorney General's Office conduct a forensic audit of the Permanently Restricted Assets/Permanently Endowed Funds of Muhlenberg Regional Medical Center (MRMC), also known as Muhlenberg Hospital.

We make this request to resolve the unanswered issue of the fiduciary responsibility of the Muhlenberg Board of Trustees and Solaris Health System Board of Trustees. Did the Muhlenberg Board act independently, or were they subservient to the dictates of Solaris Health System and their Board of Trustees? The location and disposition of these permanently restricted assets/permanently endowed funds were overlooked, not addressed, or simply forgotten by the Certificate of Need Closure document of the former Commissioner of Health Heather Howard in her letter of July 29, 2008, and the recent court proceedings.

The amount of assets documented by IRS Forms 990 is between $4.2 Million and $6.7 Million [Exhibit 1] and may not be limited to those amounts because permanently endowed assets can possibly be held by other entities, such as: the Muhlenberg Foundation (established in 1977) and the Plainfield Foundation (dating to 1920), Muhlenberg Auxiliary, etc.

At the Muhlenberg public hearings, members of the public testified about the endangered endowed assets. Prior to that a letter dated April 7, 2008, was written to the then Attorney General by the New Jersey Appleseed Public Interest Law Center. [Exhibit 2] The Public would like to know what has happened to the permanently endowed assets/funds. The April 7, 2008, letter was written prior to the passage of P. L. 2009, c.64, "Uniform Prudent Managment of Institutional Funds Act." At no point did anyone go before the Courts as required by cy pres, for the legal transfer of gifted assets.

Muhlenberg was a beloved hospital during its 130 years of existence. Through those years thousands upon thousands of individuals, businesses, corporations, churches, community groups and organizations, foundations, municipalities, and government agencies donated funds to keep Muhlenberg financially viable. In fact the land that the hospital buildings are located on was purchased with public subscriptions.

Extensive research has found a sampling of probated wills and refunding of bonds and releases naming Muhlenberg Hospital, specifically, as beneficary of those probated wills:

· John M. Whiton Bequest $9,500 Memorial Fund $425,944 [Exhibit 3] Please note that Mr. Whiton was at one time a Councilman of Plainfield.

· Albert C. Stebbins Residue of estate $226,000 Permanent Endowment [Exhibit 4] Please note that Mr. Stebbins served on the Plainfield Common Council.

· Leighton Calkins Bequest $5,000 Endowed room with tablet inscribed [Exhibit 5] Please note that Mr. Calkins was a Mayor of Plainfield.

· Annie M. Hyler Bequest $5,000 Endowed Room with tablet inscribed [Exhibit 6] · Roger Murray Bequest $1,000 Permanently endowed funds [Exhibit 7] Please note that Mr. Murray was a NJ Assemblyman.

· Leonore Darrow White $ 500 Private room with tablet inscribed [Exhibit 8]

Many other community minded people left unrestricted monetary amounts to Muhlenberg when they could have further enriched their family and friends. Many people thought their funds to Muhlenberg were safe and did not restrict their funds because they could never imagine that Muhlenberg would close. People who made provisions for alternative recipients in case the primary recipient no longer existed did not feel the need to make the same provisions for Muhlenberg.

The six deceased cited above did not leave their wealth unrestricted. The review of this small sampling of wills should spark a look back at the location of the permanently restricted assets/funds. We would hope that all of the permanently restricted assets would be adequately protected by your office.

As life long residents of Plainfield, we would like all permanently endowed assets/funds returned to the Plainfield community in trust for healthcare needs, and a community board of private citizens established to oversee those assets. It is our belief that the intent of the donors was not to enrich another community in another county whose demographics do not in any way match the level of diversity that exists in the Plainfield area.

[Please note back-up documentation can be provided upon request]

The Muhlenberg Research Group

The Muhlenberg Independents