Skilled Healthcare settles understaffing lawsuit for $50 million

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Skilled Healthcare CEO Boyd Hendrickson
Skilled Healthcare CEO Boyd Hendrickson

Nursing home giant Skilled Healthcare Group Inc. has agreed to settle a class-action suit alleging understaffing at 22 of its California facilities for $50 million. Terms still must be approved by a judge.

The deal, which Skilled Healthcare announced late Tuesday by CEO Boyd Hendrickson and other company officials in a statement, comes two months after a jury found Skilled Healthcare liable for $677 million in damages. It also comes less than two weeks after a California Superior Court Judge rejected the company's motion for a mistrial. 

The jury ruling was believed to be the largest U.S. damages award this year and had threatened to drive Skilled Healthcare, the country's tenth-largest operator, into bankruptcy proceedings. Settlement funds will be managed from escrow accounts to cover payments to members of the class-action complaint, Skilled Healthcare said. The lawsuit was filed in 2006 on behalf of 32,000 facility residents.