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N.Y. Court Eyes Empire Conversion Proceeds

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NU Online News Service, Nov. 11, 10:17 a.m. – The New York Supreme Court has scheduled a Nov. 26 hearing on the recent stock offering that helped convert the nonprofit Empire Blue Cross and Blue Shield, New York, into WellChoice Inc., a for-profit, publicly traded stock company.

The court, which is a state trial court, last week issued a temporary restraining order forbidding Empire/WellChoice from transferring the proceeds from the stock sale to the state or to a nonprofit health care foundation that was set up to manage part of the proceeds.

The court ordered Empire/WellChoice to deposit the proceeds with the state’s comptroller while waiting for the resolution of a dispute over use of the proceeds.

New York lawmakers earlier this year decided that most of the stock sale proceeds should go to a fund to increase the earnings of the state’s hospital workers, and that a small portion should go to a nonprofit health care foundation.

Consumers Union, Yonkers, N.Y., and other activist groups filed a suit in August arguing that most of the offering proceeds ought to go to a health care foundation or some other organization that would carry on Empire’s mission of expanding access to health care services.