Civil practice - Receivership - Contempt.

Byline: R.I. Lawyers Weekly Staff

Where a limited liability company filed petitions for declaratory relief with the Rhode Island Attorney General and the Rhode Island Department of Health, the LLC violated an injunctive order by seeking administrative determinations that significantly impact various aspects of the St. Josephs Health Services of Rhode Island Retirement Plan, which has been placed into receivership.

The LLC will be allowed 10 days to withdraw the petitions or else risk being held in contempt.

"Stephen Del Sesto, Permanent Receiver (Receiver) for the St. Josephs Health Services of Rhode Island Retirement Plan (Plan), petitions this Court for an order adjudging Prospect CharterCARE, LLC (PCC) in contempt for filing petitions for declaratory relief (Petitions) with the Rhode Island Attorney General (AG) and the Rhode Island Department of Health (DOH). The Receiver contends PCC filed the Petitions in violation of an injunctive order (Injunctive Order) enjoining actions against the Plan's assets, and requests as relief an order requiring PCC to withdraw its Petitions and contribute fifty thousand dollars to the Plan.

"On August 31, 2018, the Receiver executed a proposed settlement agreement (PSA) with various hospital entities CharterCARE Community Board (CCCB), St. Joseph Health Services of Rhode Island (SJHSRI), and Roger Williams Hospital (RWH) (collectively Settling Defendants) against whom the Receiver had filed claims on behalf of the Plan participants. ... Pursuant to the PSA's terms, CCCB agrees to hold its 'Hospital Interest' in trust for the Receiver, and that the Receiver will have the 'full beneficial interests therein.' ... The Settling Defendants agree to 'cooperate' and 'take all reasonable measures' necessary to obtain what the PSA refers to as an 'Order Granting Preliminary Settlement Approval' and an 'Order Granting Final Settlement Approval.'

" PCC contends, in effect, that because it sought no 'affirmative relief,' the Petitions did not impact the Plan's assets.

"There can be little doubt that the Petitions significantly impact the Plan's contingent rights to the Hospital Interest. The Petitions essentially ask the AG and the DOH to make three findings: (1) CCCB's assignment of the Hospital Interest violates the law; (2) that to effectuate the assignment, the Receiver would have to seek...

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