WHERE IS $140,000,000 THAT DONALD AND MILDRED OTHMER BEQEATHED TO LONG ISLAND COLLEGE HOSPITAL?
(Note: King's County Surrogate's Court documents referred to here are from Files # 5101/95 and #1686/98; copies are available on the Concerned Physicians for LICH website - lichmedicalstaff.org)
1.Brooklyn Heights residents Dr. Donald and Mildred Othmer, upon their deaths in 1995 and 1998, bequeathed approximately $140 million to Long Island College Hospital (LICH), most of it to go to the Othmer Endowment Fund for the benefit of LICH , with the principal to be held in perpetuity and the income used for LICH.
2. “During their lifetimes, Dr. and Mrs. Othmer were closely associated with LICH and engaged in many activities to promote its existence and ensure its continuing medical service to the community. For many years, Dr. Othmer served on LICH's Board of Regents, its governing board, as well as numerous committees. They also made substantial monetary gifts to the hospital....” 2006 Surrogate's Court Order
3.In 2000 and again in 2006, LICH, by then owned by Continuum Health Partners, Inc., petitioned the Kings County Surrogate's Court under the legal doctrine of cy pres to break the terms of the Othmers' bequests and make the principal of the Othmer Endowment Fund immediately available, to be used primarily for loan collateral and a further loan (see specifics below) and then returned to the Othmer Endowment Fund.
4.The 2006 petition argued, “By granting the relief requested herein, LICH will be able to pay down its debts and obtain the additional funding it so urgently needs to implement well-planned strategic capital initiatives to permit LICH to regain financial strength over a relatively short term and to remain a premier medical facility serving the residents of Brooklyn . . . LICH, a crown jewel in Brooklyn's storied past for nearly a century and a half, will continue to be so for generations to come; the 1.5 million Brooklyn residents served by LICH will continue to receive...excellent medical care; and the Othmer name will be remembered as having saved Brooklyn's hallmark of medical care and service, which they worked so hard to preserve during their lives, from the financial ruin it now faces.” (p. 33)
5.In both 2000 and 2006, the New York State Attorney General's Office Charities Bureau, on behalf of the “ultimate charitable beneficiaries,” submitted affidavits to the court supporting the LICH petitions to break the terms of the Othmer bequests. In itts 2000 affidavit. The Attorney General's office referred to Continuum Health Partners, Inc. as “the sole member of LICH.” (p. 3) It stipulated extensive reporting to the Attorney General's Office and stated that “If Petitioner or any interested party should seek to modify any provisions [to protect the interests of unnamed charitable beneficiaries] the Attorney General respectfully requests notice and an opportunity to be heard.” (p. 4) The Attorney General's 2006 affidavit stated that “LICH has agreed to a repayent and reporting schedule that is satisfactory to the Attorney General.” (p. 3)
6. The 2000 and 2006 Surrogate's Court Orders granting LICH's petitions specifically noted the court's “reliance on the Attorney General's support of the relief requested.”
7.The cy pres petitions requested, the Attorney General's office supported, and the court granted the following:
2000 – (1) to use a portion of the Othmer Endowment Fund to secure (as collateral) $89. 1 million of new financing needed by LICH and (2) to expend approximately $15 million to acquire, renovate and improve a medical treatment facility located at 340 Court Street. (2000 Surrogate's Court Order ) As noted above, the Attorney General's supporting affidavit included extensive reporting and repayment requirements.
2006- to borrow $25 million from the Othmre Endowment Fund at 0% interest and graduated repayment of principal over 20 years. “LICH would be required to provide written notice to the Attorney Gneral's office of each repayment of principal and advance written notice to the Attorney General's office in the event it is unable to make a scheduled repayment. LICH also would be required to provied annual written reports to the Attorney General's office on or before Juen 30 of each year detailing LICH's financial status, the application of the loan proceeds and the repayment status of the loan.” (2006 cy pres petition, pp 1, 22)