Universal Health falls after subsidiary hit with $535M jury verdict

Pavilion Behavioral Health System, an indirect subsidiary of Universal Health Services, is a defendant in a lawsuit filed in Champaign County, Illinois, relating to the sexual assault of one minor patient by another minor patient in 2020. The plaintiff asserted claims of negligence and misrepresentation, Universal Health disclosed earlier in a regulatory filing. The case went to trial in March and on March 28, a jury awarded the plaintiff compensatory damages of $60M and punitive damages of $475M. “Based on a search of verdicts in comparable cases, the magnitude of this verdict was unexpected and is unprecedented for a single-plaintiff injury case of this type in Champaign County, Illinois. The Pavilion is evaluating all legal options and intends to challenge this verdict in post-judgment trial court proceedings and on appeal,” according to Universal Health. “While the Pavilion has professional liability insurance to cover a portion of these amounts, the final resolution of this case may have a material adverse effect on the Company,” it added. Shares of Universal Health are down 5% to $173.18 in midday trading.