CONCORD — Former New Hampshire Local Government Center subsidiaries purposely withheld the existence of an asset transfer agreement from member political subdivisions that began renewing coverage with the public insurance administrator late last year, an attorney for the public insurance administrator said Tuesday in a meeting with state regulators.
J. David Leslie, a Boston attorney who represents HealthTrust, said the agreement, in which Property-Liability Trust, another former LGC subsidiary, would be absorbed by HealthTrust, was adopted in October while the entities waited on the Supreme Court to rule on LGC’s appeal of a secretary of state hearing officer’s order to return surpluses. The agreement, he said, deals with PLT’s obligation to pay HealthTrust $17.1 million that was deemed illegally transferred from HealthTrust to prop up a failing workers’ compensation program for more than a decade.
The Supreme Court upheld most of the order, including the $17.1 million payment, in January. Leslie said the agreement, signed by the respective board chairmen in secret on Oct. 28 and Oct. 29, was intended to have a plan in place should the court uphold the order. According to HealthTrust executive Wendy Parker, who at the time was executive director of PLT, renewal agreements were offered to member communities “the day after” the agreement was signed.
BSR Director Barry Glennon asked whether member communities were informed about the plan when they were asked to renew.
“No,” Leslie said. “This agreement was conditional and only became effective on the court’s order.”Leslie said member communities can opt out of their agreements. He said the agreement provides member communities a “predictable” plan and assures that their claims would be paid.“No one is interested in surprising, mouse-trapping or deceiving anybody,” Leslie said. “We don’t want people to feel that they’re trapped and committed to a relationship that they don’t want to be a part of. That’s not a good way to do business.”
PLT attorney Peter Baylor acknowledged during the meeting that he was brought aboard, at first, by HealthTrust in-house attorney David Frydman to examine the possibility of PLT going through bankruptcy proceedings. “I got a call from David Frydman who asked me to consider the bankruptcy card,” he said.
HealthTrust Executive Director Peter Bragdon has said Baylor was not hired to aid in a bankruptcy filing.
Baylor said he advised PLT that bankruptcy would be expensive and not the best course of action because it would result in years of litigation.
“Bankruptcy should always be a last resort,” he said.
A video of the meeting was provided to the New Hampshire Union Leader by David Lang, president of the Professional Fire Fighters of New Hampshire who has fought LGC through several lawsuits and Supreme Court orders over the last 12 years to open up its operations and return money to member communities.