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Kern signs intent to sell its funeral businesses

The sale of Kern Family Services' death-care businesses in Medford and Grants Pass has taken its first step forward.

Besieged by questions about millions missing from a trust fund, the company has signed letters of intent to sell its holdings in Southern Oregon, a spokesman said Thursday.

The sales are a condition set by state regulators investigating the missing funds, which came from prepaid funeral and burial plans.

The Medford-based Perl group of funeral and burial services is set to be purchased by Stewart Enterprises, according to Dan Isard, president of an Arizona management company hired to run Kern Family Services.

Stewart, which is based in Louisiana, is among the nation's largest death services companies. The Medford companies set to change hands are Perl Funeral Services, Perl with Siskiyou Funeral Home and Siskiyou Memorial Park.

Service Corporation International (SCI), the former owner of the Perl group, is set to purchase Kern's Grants Pass companies: Hull & Hull Funeral Home, Hawthorne Memorial Gardens and Southern Oregon Cremation Services. SCI was forced to sell the Perl group in 1996 by the Federal Trade Commission, which feared the large company had a monopoly in Medford. SCI sold the Perl group to Kern, which has claimed that the trust fund woes began at the time of that sale.

But the pending investigation into those missing funds didn't stop the two companies from negotiating a deal for the Grants Pass properties. Isard said relations between the two haven't been a problem since his management company, Foresight Analysts, began running Kern in June.

The letters of intent were filed in bankruptcy court in Eugene on Tuesday, Isard said. Kern filed for Chapter 11 protection in the wake of the trust-fund scandal. Isard said the company intends to submit its reorganization plan to the court in the next few weeks.

The sale contracts are scheduled to be completed in the next few days and Isard is hoping that the sales will be finalized sometime in the next 30-40 days.

Income from the pending sales will be used to replenish the money missing from the trust fund, which the state has estimated totals least $5.3 million.

Isard said Kern and the two potential buyers have a confidentiality agreement that prevents him from discussing price. He has previously said the money generated will be more than enough to cover the missing funds.

That exact amount Kern will be forced to pay will be determined by a mediator once the state concludes its investigation. The state attorney general's office is also continuing to investigate the role that David Kern, the company's top executive, played in the trust-fund scandal.