Lrghealthcare

“William Bald is a shareholder and president of Melcher & Prescott Insurance, an insurance brokerage firm based out of Laconia, NH. While no business transactions existed in the fiscal year covered by this return, it is possible that other trustees of LRGHealthcare, Hospital employees, or the Hospital itself may conduct business with Melcher & Prescott Insurance from time to time.”

“Steve Miller, who served as the Hospital's Interim CFO and Chief Restructuring Officer during the tax year, was a contract employee through QHR from October 1, 2019, through May 31, 2020; On June 1, 2020, Steve Miller became a temporary employee of the Hospital. QHR is a hospital consulting and management firm and is unrelated to the LRGHealthcare. Compensation in the amount of $277,436 was paid to QHR by LRGHealthcare for Mr. Miller's services. In accordance with IRS instructions, these fees have been reported as compensation on Form 990, Part VII-A and further disclosed in Schedule O for Form 990, Part VI, Line 3.”

“LRGHealthcare has 850 members who are also considered stakeholders who are eligible to vote.”

“The members, also known as stakeholders, may elect one or more board members of the governing body at the annual meeting.”

“The members, also known as stakeholders, approve bylaws and articles of incorporation changes. The Members shall support the mission of LRGHealthcare, provide information to the Board of Trustees to enable it to better fulfill the vision, serve as ambassadors in the community, and perform such other functions and activities as requested by the Chair. Members may participate in the consideration of any matter that properly comes before a meeting of the Members and shall be eligible to hold any position with LRGHealthcare to which he or she may be elected, appointed or hired. Members shall elect new Members of LRGHealthcare, ratify the election and re-election of Trustees, and vote to dissolve the Corporation.”

“A draft of the Form 990 is prepared with the assistance of an independent public accounting firm. The Wind Down Board, with the assistance of Craig Jalbert, a consultant, will oversee the process for reviewing and eventually filing the Form 990 once its preparation is complete.”

“A copy of LRGHealthcare's conflict of interest policy is distributed annually to all officers, trustees, medical staff officers and committee members, and the senior team. All are required to report any conflicts and sign, date, and return the policy, whether or not a conflict exists, to confirm compliance. Conflicts are disclosed in accordance with State of New Hampshire RSA 7 19-A in the local newspaper and submitted to the New Hampshire Attorney General.”

“The CEO's compensation and benefits are reviewed, adjusted, and voted upon by the full board annually. The board of trustees uses comparative data provided by a consultant who surveys compensation for healthcare executives in the New Hampshire and broader New England area. Survey data from the New Hampshire Hospital Association (NHHA) and the American Society for Healthcare Human Resources (ASHHRA) is also used to validate that the salary, benefits, and pay range for the CEO is fair, reasonable, and competitive. The CEO is excused from discussions surrounding CEO compensation during any meeting. The CEO uses data provided from human resource consultants, NHHA and ASHHRA surveys to evaluate salaries and approve market adjustments for employees at the Vice President level and below. Physician salary ranges are established annually using the Medical Group Management Association (MGMA) salary survey data. These reviews are also conducted annually.”

“LRGHealthcare files audited financial statements annually with the New Hampshire Attorney General's Charitable Trust Unit. Current copies of the bylaws, conflict of interest policy, and Form 990 are on file with the Charitable Trust Unit. Copies of the Organization's governing documents, conflict of interest policy, and financial statements are also available to the public upon request.”

“The 2019 compensation reported for Dr. Ephrem, Dr. Aldridge, and Dr. Racicot is for their full-time services as physicians on the medical staff and does not reflect remuneration for services as board of trustees members of the Hospital.”

“Contracted professionals and purchased services: Program service expenses 9,193,910. Management and general expenses 12,833,967. Fundraising expenses 12,124. Total expenses 22,040,001. Repairs, maintenance, and janitorial fees: Program service expenses 212,970. Management and general expenses 851,881. Fundraising expenses 0. Total expenses 1,064,851. Equipment rentals, servicing, and support: Program service expenses 174,414. Management and general expenses 697,658. Fundraising expenses 0. Total expenses 872,072. Administrative and office support contracts: Program service expenses 0. Management and general expenses 158,040. Fundraising expenses 0. Total expenses 158,040. Recruitment service fees: Program service expenses 112,185. Management and general expenses 0. Fundraising expenses 0. Total expenses 112,185.”

“Adjustment to pension liability -1,218,658. Investment in affiliate -1,431,089.”

“LRGHealthcare filed a petition for reorganization under Chapter 11 of the Bankruptcy Code on October 19, 2020. Additionally, on October 19, 2020, the LRGHealthcare entered into an asset purchase agreement with Concord Hospital, Inc. to acquire certain assets of Lakes Region General Hospital and Franklin Regional Hospital. As a result of these transactions, LRGHealthcare implemented a new Wind Down Board of Trustees, to faciliate LRGHealthcare's transition into the Concord Hospital System. The Wind Down Board, with the assistance of Craig Jalbert, a consultant with the firm Verdolina & Lowey, P.C., will exercise oversight, selection, and review of LRGHealthcare's audit process.”

“LRGHealthcare and Subsidiary's consolidated financial statements have been prepared under the assumption that they will continue as a going concern. In an effort to achieve liquidity that would be sufficient to meet all of their commitments, LRGHealthcare and Subsidiary has undertaken a number of actions, including cost cutting and other initiatives. However, management believes that even after taking these actions, the Hospitals will not have sufficient liquidity to satisfy all of their future financial obligations, comply with their debt covenants, and execute their business plan. As a result, LRGHealthcare filed a petition for reorganization under Chapter 11 of the Bankruptcy Code on October 19, 2020. The risks and uncertainties surrounding the Chapter 11 case, the events of default under the Hospitals' credit agreements, and the other conditions impacting LRGHealthcare and Subsidiary's activities raise substantial doubt as to their ability to continue as a going concern. Although Management believes that the reorganization of LRGHealthcare through Chapter 11 will position the Hospitals for sustainable growth opportunities, the Chapter 11 filing caused an event of default under the Credit Agreements, which is stayed during the pendency of the bankruptcy proceeding. Further, there are several risks and uncertainties associated with the Hospitals' bankruptcy, including, among others: (a) the Hospitals' pre-packaged plan of reorganization may never be confirmed or become effective, (b) the Bankruptcy Court may grant or deny motions in a manner that is adverse to the Hospitals and their subsidiary, and (c) the Hospitals' Chapter 11 case may be converted into a Chapter 7 liquidation. On October 19, 2020, the Hospitals entered into an asset purchase agreement (the Agreement) with Concord Hospital, Inc. (the Buyer) to acquire certain assets of Lakes Region General Hospital and Franklin Regional Hospital. Upon execution of the Agreement, the Hospitals filed a voluntary case under Chapter 11 of the United States bankruptcy code. As a result, the Agreement is subject to bankruptcy proceedings, including a formal bid process and auction (that was completed in December 2020) as well as subsequent regulatory approvals. On October 19, 2020 (the Petition Date), the Hospitals filed the Chapter 11 case in the U.S. Bankruptcy Court for the District of New Hampshire (the Bankruptcy Court). The Hospitals will continue to operate their business as a "debtor in possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. The Chapter 11 case is being jointly administered under the caption In re LRGHealthcare, Debtor, Case No. 20-10892 (MAF). A Sale-Procedures Order was entered on November 2, 2020. Pursuant to the Sale-Procedures Order, the Sale Hearing was held and concluded before the Court on December 21, 2020 at 10:00 a.m. (EST). On December 24, 2020, the court entered the Order (I) Approving the Sale of Substantially All of The Debtor's Estate Free and Clear of All Interests, (II) Approving the Assumption and Assignment of Certain Executory Contracts and Unexpired Leases, and (III) Granting Related Relief. LRGHealthcare cannot predict the ultimate outcome of the Chapter 11 case.”