Skilled HealthCare Settles Class Action for $50 Million

Foothill Ranch, CA: Skilled Healthcare Group, Inc has announced that it has reached agreement to settle the case entitled VINNIE LAVENDER, by and through her Conservator, WANDA BAKER; WALTER SIMON; JACQUELYN VILCHINSKY vs. SKILLED HEALTHCARE GROUP, INC., et al (and 22 individually-named California nursing facilitiers receiving administrative services from Skilled Healthcare, LLC). The terms of the settlement remain subject to the approval of the Superior Court of California, Humboldt County.

Under the terms of the settlement, the Company will deposit a total of $50 million into escrow accounts to cover settlement payments to class members, notice and claims administration costs, certain service payments to named plaintiffs, plaintiffs' attorneys' fees and costs (to be approved by the Humboldt County Court) and certain other payments. The escrow accounts are expected to be funded by Skilled Healthcare's revolving credit facility.

Additionally there is an injunction which requires the 22 defendants that operate California nursing facilities to provide specified nurse staffing levels, comply with specified state and federal laws governing staffing levels and posting requirements, and provide reports and information to a monitor. The injunction will remain in effect for a period of 24 months unless extended for additional three-month periods as to those defendants that may be found in violation. Defendants demonstrating compliance for an 18-month period may petition for termination of the injunction.

As part of the settlement, the plaintiffs have agreed to release the Company and other defendants from claims related to the litigation.

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Published on Sep-8-10