May 1, 2003 | Read Time: 1 minute
Drexel University’s College of Medicine, in Philadelphia, has received $12.4-million to replenish charitable endowments drained by a medical-research foundation that eventually went bankrupt.
The money is part of a $23-million settlement reached last year by Pennsylvania’s attorney general, who contended that the now-defunct Allegheny Health Education and Research Foundation had illegally transferred restricted funds from the hospital system’s endowment accounts to its general-operating account as the foundation teetered on the brink of insolvency from July 1997 until it filed for bankruptcy in July 1998.
Many of the research foundation’s assets were then purchased by the for-profit Tenet Healthcare Corporation, while its charitable assets were vested in two new institutions — the Philadelphia Health and Education Corporation, now the Drexel University College of Medicine, and the Philadelphia Health and Research Corporation, an independent foundation that administers the endowments of the hospitals purchased by Tenet.
“This is a great ending to a very difficult and complex bankruptcy case,” said Attorney General Mike Fisher. He noted that the initial lawsuit, filed in early 2000, had sought the return of $78.5-million in charitable assets.
“I wish we could have recovered all the funds that were taken from these charitable accounts,” Mr. Fisher said. “However, I am pleased that we were able to obtain a significant portion of these endowments, which will be used to fund vital medical research and improve the health of thousands.”
