Montana Code 50-4-715. Criteria for attorney general approval of conversion transaction
50-4-715. Criteria for attorney general approval of conversion transaction. (1) The attorney general may not approve a conversion transaction except upon a finding that the conversion transaction is in the public interest. If the attorney general or a court pursuant to 50-4-704 determines that the transaction does not involve public assets, the attorney general may not disapprove the conversion transaction under the provisions of this part.
Terms Used In Montana Code 50-4-715
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Contract: A legal written agreement that becomes binding when signed.
- conversion transaction: means the sale, transfer, lease, exchange, transfer by exercise of an option, optioning, conveyance, merger, affiliation, mutualization, joint venture, or other disposition by a nonprofit health entity or another person or entity resulting in the transfer of control or governance to a person or entity other than the nonprofit health entity of the lesser of:
(i)more than 10% in fair market value of the assets or operations of a nonprofit health entity; or
(ii)assets of a nonprofit health entity amounting to a fair market value of $5 million or more. See Montana Code 50-4-701
- Fair market value: The price at which an asset would change hands in a transaction between a willing, informed buyer and a willing, informed seller.
- Fair market value: means the fair market value as of the date of the transaction or proposed transaction as determined by an independent appraisal of the assets or operations performed and communicated by a qualified appraiser according to applicable professional appraisal standards. See Montana Code 50-4-701
- Nonprofit health entity: means :
(i)a nonprofit health maintenance organization; or
(ii)a nonprofit health service corporation. See Montana Code 50-4-701
- Person: includes a corporation or other entity as well as a natural person. See Montana Code 1-1-201
- Public assets: include :
(a)assets held for the benefit of the public or the community;
(b)assets in which the public has an ownership interest;
(c)assets owned by a governmental entity; and
(d)assets owned by a nonprofit corporation to the extent that the corporation holds assets in a charitable trust. See Montana Code 50-4-701
- Transferee: means the person in a conversion transaction that receives the ownership or control of the nonprofit health entity that is the subject of the conversion transaction or of the nonprofit health entity's assets. See Montana Code 50-4-701
- Transferor: means the nonprofit health entity that is the subject of the conversion transaction or the corporation that owns the nonprofit health entity that is the subject of the conversion transaction. See Montana Code 50-4-701
- Trustee: A person or institution holding and administering property in trust.
(2)In determining whether a conversion transaction is in the public interest, the attorney general shall require that:
(a)the fair market value of public assets is preserved and protected;
(b)the fair market value of public assets is expended or invested with reasonable and prudent consideration of the potential risk of financial loss associated with the conversion transaction;
(c)the fair market value of the public assets of a nonprofit health entity will be distributed as provided in 50-4-720;
(d)no part of the public assets of the transferor inure directly or indirectly to an officer, director, or trustee of the transferor or to the transferee or an officer, director, trustee, shareholder, or employee of the transferee or to any other person that is not a foundation or nonprofit organization approved to receive the assets by the attorney general; and
(e)an officer, director, or trustee of the nonprofit health entity does not receive any immediate or future remuneration as a result of a proposed conversion transaction except for the reasonable value of services rendered pursuant to a valid contract between the officer, director, or trustee and the nonprofit health entity.
(3)For purposes of the attorney general’s review under 35-2-609, 35-2-617, and this section, there is a rebuttable presumption that the assets of a nonprofit health entity are public assets.