Skilled Healthcare Agrees to Mediation to Settle $671 Million Verdict

Skilled Healthcare Group Inc., which was ordered by a California jury to pay $671 million for improperly staffing nursing homes, agreed to try to settle the case in mediation.

Skilled Healthcare and the plaintiffs in the suit agreed to end all litigation during the mediation, the Foothill Ranch, California-based company said in a statement today.

The plaintiffs accused Skilled Healthcare of improperly staffing 22 facilities in the state. A Humboldt County jury on July 6 found the company liable for $613 million in statutory damages, the maximum allowed by state law, and $58 million for restitution.

The lawsuit was filed in 2006 on behalf of current and former residents of 22 Skilled Healthcare operations in California.

The verdict is the largest jury award in the U.S. this year, according to data compiled by Bloomberg. Skilled Healthcare said the award exceeds the policy limits of its insurance. The company had a net loss of $133 million last year on revenue of $759.8 million.

Skilled Healthcare also agreed not to file for bankruptcy protection during the mediation period, which is scheduled to end Aug. 9. The proposal must be approved by a judge. A hearing is scheduled today, Skilled Healthcare said.

The case is Lavender v. Skilled Healthcare Group, DR060264, Superior Court, Humboldt County, California (Eureka).

To contact the reporter on this story: Joe Schneider in Hong Kong at jschneider5@bloomberg.net

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