Foothill Ranch-based Skilled Healthcare Group Inc.’s shares took a double-digit drop in Monday trading on news of a judge’s denial of its request for a mistrial in a potentially crippling lawsuit it lost in July.
The nursing home company’s shares closed down nearly 11% to a market value of $93 million.
Late Friday, Humboldt County Superior Court Judge Bruce Watson denied Skilled’s motion for a mistrial over a jury verdict that found Skilled liable for $677 million in damages for alleged mismanagement of 22 California nursing facilities.
The company had contended that a juror lied on a sworn questionnaire about connections to one of the case’s plaintiffs and to one of its defendant facilities.
Skilled’s shares are down some 55% since July 7, when the verdict was first announced.
Skilled said in as statement that the court also ordered it to provide specified nurse staffing levels, comply with staffing level laws and provide information and reports to a monitor.
The company said it will appeal the staffing ruling.
Skilled is in negotiations with the plaintiffs in the case before the jury award is confirmed. Further court proceedings are set for Tuesday.
Analysts said they expect that a settlement would be likely because if Skilled was forced into bankruptcy, it could be a long time before plaintiffs could see a payment.
