Attorney General Ellison seeks court oversight over Rainbow Health dissolution

Attorney General seeks court supervision over Rainbow Health to ensure orderly disposition of nonprofit assets

September 25, 2024 (SAINT PAUL) — Minnesota Attorney General Keith Ellison today filed a petition asking the Hennepin County District Court to supervise the dissolution of Minnesota nonprofit Rainbow Health Minnesota amid its disclosure of insolvency and notification of intent to dissolve.

As the petition states, Attorney General Ellison initiated a voluntary investigation into the circumstances surrounding Rainbow Health’s sudden downfall. Rainbow Health has cooperated with the Office’s investigation. At the same time, employees and others have raised questions about whether Rainbow Health would be able to prioritize payments to employees in light of its significant liabilities.

Court supervision is a process set forth under the Minnesota Nonprofit Corporation Act. Unlike a lawsuit, court supervision is not automatically an adversarial process. Under supervision, a court will be able to direct the disposition of assets in an efficient way under a specific statutory framework that applies when a court is evaluating the issue.

“I believe court supervision is the proper next step in this case,” Attorney General Ellison said. “It not only minimizes the risk of separate disputes about who gets what, it can give the employees the best shot to potentially get paid. I believe the parties can resolve these issues cooperatively and efficiently with the court’s supervision.”

The AGO’s investigation is in process. The AGO’s Charities Division has civil enforcement authority over the state’s nonprofit corporation, charitable-solicitation, and charitable-trust laws. The Charities Division does not enforce criminal laws. 

The public may submit complaints to the Attorney General about nonprofit and charities. Complaints may be submitted by using a form on the Attorney General’s website, or by calling (651) 296-3353 (Metro area), (800) 657-3787 (Greater Minnesota), or (800) 627-3529 (Minnesota Relay).