Court Upholds Verdict, $2.25M in Damages Against Bankrupt Elder Care Facility Officers

Michael Peregrine said that a Third Circuit decision which held former officers and directors of a bankrupt nursing home liable for damages in the unsecured creditors committee’s fiduciary duty breach claims provides important governance lessons for struggling nonprofit healthcare providers. The decision “clarifies the extraordinary standards under which punitive damages can be awarded” against officers and directors, Mr. Peregrine explained, because “the underlying breach of the duty of care and ‘deepening insolvency’ rulings against those officers and directors were upheld.”