Muhlenberg - Courier - 'Buy Muhlenberg' to launch

Published in the Courier News, Saturday, April 19, 2008

Group eyes Muhlenberg
$100M purchase effort launches

By CLEM FIORENTINO
STAFF WRITER

A grassroots group made up of business leaders, politicians, clergy, community activists and other concerned citizens has launched a "Buy Muhlenberg!" campaign, designed to raise $100 million and halt the announced closure of the acute-care facility.

The fundraising effort will kick off at noon today during the "Hour of Power Prayer Vigil to Save Muhlenberg" at the corner of Randolph Road and Park Avenue in Plainfield.

The group will be selling "shares" at $20 each with the rallying cry: "Everyone can own a piece of their community hospital and have a voice."

In the forefront of the movment is Olive Lynch, an IT compliance consultant in the banking industry who recently filed a petition to run for City Council (to represent the Third Ward) in the Democratic primary in June. She has assumed the role of coordinator.

Lynch says she went to an organizational meeting for the prayer vigil last Monday and was struck by the sense of defeat in the room.

"If another buyer can't be found and if the community doesn't want to lose the hospital, let's buy it," she said. "We have to come up with creative solutions. That's what America is built on. We have to put together a business model and talk to people in the trenches."

Lynch said she has scheduled meetings to put together the medical, legal and professional people needed to sustain the movement.

Today, her group will be looking for signatures on a letter to the State Department of Health and Senior Services, asking Commissioner Heather Howard to halt consideration of the application for closure filed by Solaris Health System, Muhlenberg's parent company, in March. And they'll be selling "Buy Muhlenberg!" T-shirts.

Lynch said she has talked with several "serious investors" and has talked with Cain Brothers, the investment bankers enlisted by Solaris last November in an effort to sell the 130-year-old facility. When no offers were received, Solaris announced the downsizing of the facility in February and filed a certificate of need for closure in March. Last week, letters were sent to Muhlenberg's 1,100 employees, informing them that downsizing could begin on June 16.

Lynch said she spoke with representatives of Pine Creek Capital (an investment group from Nashville, Tenn., specializing in distressed hospital properties) that expressed interest in buying Muhlenberg but was denied due diligence by Solaris.

"Before making a serious offer, they have to look around at what's there," Lynch said. "But Solaris wouldn't disclose anything."

Larry Bashe, an investment banker who lives in Plainfield and works for Raymond James and Associates (of which Pine Creek Capital is a subsidiary) confirmed Lynch's contentions.

"She and others called me and I said I would help," Bashe said. "Solaris stopped us from completing our due diligence. Solaris thought there wasn't enough time to put together a capitalization plan. Pine Creek thought the hospital could survive if we recapitalize. To create a new entity, we would have had to have concessions."

Solaris officials were quick to counter those statements.

"At the time that Pine Creek originally contacted Cain Brothers, they did not provide the name or names of the principals who were going to be part of any offer or contract," said Steven Weiss, a Solaris spokesman. "Because of that, there could be no additional conversation with them with regards to a hospital purchase. We have recently advised them that they are certainly free to speak to Cain Brothers and disclose their principals' experience and finances that meet the criteria for an offer."

Bashe, referring to Commissioner Howard's remarks that Solaris would be strengthened by Muhlenberg's closing, conceded that the campaign is a "a longshot — especially when the state has already said it should be closed."

Lynch says the effort is completely non-partisan.

"People feel disenfranchised," she said. "They are being betrayed by the state. A big non-profit is effectively taking business away from Muhlenberg. It's really disturbing. They are shutting down the hospital as we speak. We are demanding that Solaris stop taking assets out of the hospital."

Solaris officials unequivocally denied Lynch's charges.

"There has been no transfer of assets from Muhlenberg to anywhere else," Weiss said. "Solaris has always directed any party who was interested in purchasing the hospital to speak directly to the investment banking firm (Cain Brothers) that is handling Muhlenberg. Until a buyer provides the investment banking firm with financials and the names of their principals and meets the strict guidelines set down by the state and attorney general for a hospital purchase, Solaris will continue to move forward with our plans to provide health care to our community."

If this effort fails, Lynch says her group has yet another idea.

"If it ends up that Solaris will not sell, we go to the state and ask them to let us open our own hospital," she said. "If we have $100 million in hand and Solaris is going to be a jerk, then we go to the state and demand that we want a hospital in our area. If you're going to allow this entity to close, then allow us to build a hospital of our own."

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