It’s an indirect but real one, of which he is aware. It was in its inception highly beneficial, and had not Long Island College Hospital’s owners, with court acquiescence, used funds for purposes not contemplated in the terms of a gift, it could have averted the crisis LICH and the communities that depend on it now face.
As this Wall Street Journal article tells the story, it began in 1961 when Donald and Mildred Othmer, then a young couple living in Brooklyn Heights but originally from Omaha, Mr. Buffett’s home town (he was a friend of Mrs. Othmer’s mother), invested $25,000 in a partnership that would later be dissolved and the interests converted to Berkshire Hathaway Corporation stock. That stock increased in value to the point where the Othmers–he died in 1995 and she in 1998–were able to leave substantial bequests to several favorite institutions. One of these was LICH, which was given $135 million that, according to the Othmers’ instructions, was to be held in perpetuity and the income to be used for the hospital’s general expenses. Over time, though, LICH’s owners, Continuum Health Partners, were able to secure court permission to use portions of the principal for other purposes, including serving as collateral for loans. When Continuum transferred ownership of LICH to SUNY Downstate, it sought and received court permission to put the remaining Othmer funds into a trust to pay claims against LICH, the creation of which was a condition of the Continuum-SUNY deal. As a condition of approving the use of the Othmer funds for this purpose, the court said SUNY would be liable to repay the funds. SUNY later said it would do so only if it could.
According to the WSJ article, Brooklyn Heights resident Barbara Gartner notified Mr. Buffett by e-mail of the situation. He’s quoted as saying “he wishes he had known sooner.”
Photo: commons.wikimedia.org; Mark Hirschey.
