National Top Ten Medical College

Testifying Expert - Hospital Operations and Faculty Practice Plan Financial Management

In the course of terminating a 50-year academic affiliation, a prominent hospital system and a medical college were caught in a dispute over the ownership of certain faculty practice, endowment and research funds held by the parties that aggregated more than $150 million.  HMP was retained by the medical college to research the source and uses of those funds and opine as to the ownership of each individual fund. 

Issues

• Because of the length of the relationship, many of the funds had little formal documentation governing the ownership of the funds or the distribution of the funds in the event that the relationship was terminated.
• Because many of the funds had evolved over many years as both parties expanded their respective operations, the source and use of cash flowing through the funds had to be analyzed.

Approach

• We at HMP utilized our accounting knowledge and expertise in the inner workings of hospital finance to determine the flow of funds and ultimately the ownership of those funds.
• Our approach was to “follow the money” to its source and determine what actions generated the funds, what the intent of the payor or donor was, as well as how the funds were historically accounted for by both parties.
• HMP prepared an expert report, and one of our managing directors testified for two days and also attended all 15 days of the arbitration proceeding where he assisted counsel.

Result