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$75M conversion – Legal fight settled

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Blue Cross and Blue Shield of Kansas has ended a three-year legal battle with the state by agreeing to pay $75 million to finance a new public health foundation, the Wichita Business Journal reported Aug. 28.

The new Sunflower Foundation will help pay for health care services for Kansans.

In 1997, reflecting similar disputes involve Blue Cross groups in 31 other states, Kansas’ Blue Cross filed litigation against the state attorney general to resolve whether it had charitable assets resulting from its original organization and operation.

A district court judge ruled earlier this year that Blue Cross did have a charitable obligation because of tax breaks it enjoyed from the time it was formed in 1941 until 1969, when its status changed.

Blue Cross officials said they agreed to settle the lawsuit so the company would avoid the continued risk of losing all its assets, the Journal said.

For full story, go to Business Journal.

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