Who Will Be Held Liable If Summers Can't Deliver on His Promise of a $120 Million Deal Based Upon His Expert Valuation?

[Brian Essi]

Recent Hospital Sales August 2014-Subsidium.JPG (102.71 KiB) Viewed 3330 times

This Subsidium slide above shows that the average selling price for Lakewood Hospital should be $71,874,729.00 (not counting the cash reserves)

1/2 of St. John's Hospital (220 beds) just sold last month for $45M--so that smaller hospital is worth $90M---that proves that Subsidium's valuation was low.

So If we use the lower number of $70M as the value of the hospital and add the $50M in cash and liquid investments LHA had as of 9/30/15, then Lakewood has assets with a total value of $120M.

Summers promised he had a $120M deal in January--its still on the onelakewood.com website.

1. Keep in mind this $120M value does not count Lakewood Hospital Foundation's investments of $33M as of 9/30/15.

2. Also, keep in mind that Subsidium and Huron Consulting were NOT engaged to look BACKWARD and assess the damage that CCF did to the hospital. So the $120M valuation of assets does not take into account any damage to the assets caused by CCF due to decanting (stealing programs and services).

Who will be liable if we don't get what the experts said was the FAIR VALUE i.e. the $120M Summers promised us in January?

[Bill Call]

The answer is..... nobody.

An employee of the Clinic who has passed on bits and pieces over the years said the Clinic is seeking to be held harmless under any agreement. Since this person speaks in codes I'm going to guess that the Clinic wants a secret side a agreement that relieves the Clinic of any financial obligation if the lawsuit goes against them.

All Lakewood will get is a second rate medical office building on the corner of Belle and Detroit.

Just remember all the promises made about the Vision for Tomorrow. Even as they made those promises the Clinic was planning to decant the Hospital. I suspect that they are already planning to "decant" the medical office building.

After four years of planning and plotting the Mayor still has no idea what is going to be built on all of that vacant land.

[Brian Essi]

The answer is..... nobody.

An employee of the Clinic who has passed on bits and pieces over the years said the Clinic is seeking to be held harmless under any agreement. Since this person speaks in codes I'm going to guess that the Clinic wants a secret side a agreement that relieves the Clinic of any financial obligation if the lawsuit goes against them.

I certainly would like to hear from well informed folks like Corey Rossen and his buddy Jay Carson, but two thoughts occur to me:

Firstly, there are government folks like Atty. Gen. DeWine, the FTC, the Ethics Commission and maybe other agencies that might take notice of a group of actors transferring public assets and surrendering rights at $100M below market with multiple conflicts in play and fleece lined pockets bulging.

Secondly, the original LOI contained a $2.5M insurance premium to defend the bad actors. I am told that CCF has captive offshore Cayman Island insurance companies that will underwrite the bad actors' malfeasance. For example, Bill Gorton (the longest standing LHA trustee) boasts of his relationship with CCF and his involvement with offshore Cayman Island insurance entities. Insurance like that makes some plaintiffs' attorneys drool.

The taxpayer lawsuit might seem like a preseason exhibition game when we look back five years from now at government investigations and the chaos of litigation a bunch a lawyers could ignite.

$100M is a lot of money to some people.

[cameron karslake]

Brian,

Have you heard from Dr. Terrance Kilroy lately? Last monday, after getting kicked out of another C.O.W. meeting, those of us from SLH hung out in the stairwell of city hall and talked. Dr. Kilroy was there and he said some pretty scary things. He says (and I hope I have this correct ) that since the LOI has expired, the Clinic is promising NOTHING to Lakewood. Council did not approve the LOI therefore all the items in that document are off the table. The "good news" the mayor spoke of in January is up in smoke and the city is negotiating from scratch.

Somehow though this deal, $120 million of public assets will be distilled down to $25 million (how does THAT happen?) for the "wellness" foundation that the CCF will control. This foundation money only goes up to the $35 million when the Clinic kicks in $1million/year over next 10 years. What an awesome deal! The CCF gets out of it's lease valued at $200 million over ten years and only has to kick in $1 million over ten years. Who generally sets the terms of leases, the lessor or the lessee? We all know that in this case it's the lessee (CCF).

Dr. Kilroy is convinced this deal has criminal implications. Laundering money from 120 million in public money down to 25 million for a private non-profit is illegal. This is where the Attorney General Dewine should step in. This is where the FTC should step in.

How long is the Clinic's reach?

[Lori Allen _]

Why is Summers refusing to get CCF to sign off and allow the city an open bidding process which should have been done in the first place? If Summer's deal goes through, the only medical services of any kind in the entire city of Lakewood will be CCF. Mike Dewine is a start, I believe that what the Mayor,other city officials , and the Mayor's best buds appear to be doing is criminal and there should be a federal investigation done.

Has anyone done any research on the Cleveland Foundation? I tried to do some research but was given the message that this page has expired or been removed. Hmmmm. FWIW

[Dan Alaimo]

The best possible news is CCF backing off and freeing Lakewood to get bids from others. Worst case 1): they refuse to do that, meaning the city needs to take them to court. Worst case 2) someone will come with in a similar proposal, but more likely it will be a better deal. It seems very unlikely that CCF will abandon the business they now do in the existing two medical office buildings as they will feed patients to Fairview and Avon.

[Brian Essi]

Cameron,

I have not been in touch with Terry lately but my sources also say we are getting next to nothing. This is truly ironic since the main pillar of why Summers Pae Gable Madigan Bullock Foran Kenny Carson Beebe Einhouse Shaugnessy and the Bleedera are selling us out is because "there will be nothing". Idiots and fools! I do agree that it is criminal.

Dan,

The number 1 worse thing is what will be unveiled next week. It is a disaster that will be sold as "Good News" by the weakest and most corrupt leaders that Lakewood has ever seen.

Brace yourselves. There will be a backlash and civil war like Lakewood has never seen.

[Bill Call]

Brace yourselves. There will be a backlash and civil war like Lakewood has never seen.

Don't count on it. Unless members of Council are willing to challenge the Clinic and stand up for Lakewood its all over. The court might allow the lawsuit to proceed but even if its found that our worst thoughts about the corruption and theft are real it still won't matter.

[Brian Essi]

Bill,

I ain't over till it's over.

Keep in mind that City Council has not done anything yet--and therein lies the problem and the solution. If relevant facts come to light after a decision is made, there will be consequences.

It's like physics.

[christopher dan]

So what good news is going to be spun...whatever can we expect to here next week

[Dan Alaimo]

If the news is disappointing in any way, I bet they'll blame the taxpayers opposed to the scheme.

[Lori Allen _]

UGH!!!!!