Devore v. Keystone Education and Youth Services, LLC $9.5 Million settlement–January 2011

From UHS Annual Report
Devore, et. al. v. Keystone Education and Youth Services, LLC:
Alicante School (Keystone School Carmichael)  in California was acquired by a subsidiary of ours in October, 2005. Prior to our acquisition, two former employees of the facility filed a false claim act qui tam action and a gender discrimination/whistleblower claim in Sacramento County Superior Court. The plaintiffs allege that the Alicante School improperly billed subdivisions of the state of California based upon services provided at the school and that the plaintiffs were discriminated against based upon their gender and as a result of their objection to these practices. In June, 2008, we entered into an agreement with the former owners of the facility whereby they agreed to defend the case, indemnify us and hold us harmless for any damages that may result from this case. The former owners of the facility had been funding the legal defense of this case since that time. Recently, the court approved the agreed upon $9.5 million settlement of this matter which we paid to the plaintiffs in January, 2011. Since we have made a demand on the former owners of the facility for repayment, and intend to pursue collection of the $9.5 million pursuant to the June, 2008 indemnification agreement (although we can provide no assurance that we will collect the entire $9.5 million), the settlement amount and related receivable is reflected in other current assets and other accrued liabilities on our Consolidated Balance Sheet as of December 31, 2010.
October 2005 8-K
Universal Health Services (UHS)
Below are the companies and the facilities UHS purchased from Harbinger Private Equity Fund I, L.L.C., Keystone Group Kids, Inc., Michael Lindley (“Lindley”), Marty Weber, Ameris Healthcare Investments, LLC, Rainer Twiford, Al Smith (“Smith”), Mike White, Rodney Cawood (“Cawood”), Buddy Turner, Jeff Cross, Gail Debiec, Brad Gardner, Brad Williams, Don Wert, Rob Minor, Mike McCulla, Jim Shaheen, Rod Gaeta

Keystone Nevada, LLC
Keystone Memphis, LLC
Keystone Education Transportation, LLC
Elmira NPS, LLC
Alicante School Elk Grove, LLC
Keystone Savannah, LLC
Keystone Newport News, LLC
Keystone Marion, LLC
Keystone WSNC, L.L.C.
Keystone Oklahoma City, LLC
CCS/Altacare of Arkansas, Inc.
Chad Youth Enhancement Center, Inc.
CCS/Bay County, Inc.
CCS/Meadow Pines, Inc.
Ventures Healthcare of Gainesville, Inc.
CCS/Little Rock, Inc.
CCS/Rivendell of Kentucky, Inc.
CCS/Lansing, Inc.
Associated Child Care Educational Services, Inc.
American Clinical Schools, Inc.
Alabama Clinical Schools, Inc.
Pennsylvania Clinical Schools, Inc.
Tennessee Clinical Schools, Inc.
Keystone NPS, LLC
Keystone Continuum, LLC
Keystone Detention, LLC
Keystone Richland Center, LLC
Keystone DJJ, LLC
Keystone Charlotte, LLC
Keystone JJAEP, LLC
 
Here are the facilities that each the above companies owned, subsequently now UHS purchases.

Alabama Clinical Schools
AL
Tennessee Valley Juvenile Detention Center
AL
Tuscaloosa Juvenile Detention Center
AL
Bristol Youth Academy
FL
Jacksonville Youth Center
FL
The H.O.P.E. Program
FL
Nueces County Juvenile Justice
TX
Cedar Grove
TN
Chad Youth Enhancement Center
TN
Cherokee Park Youth Center
TN
Compass Intervention Center
TN
Hermitage Hall
TN
McDowell Center for Children
TN
Natchez Trace Youth Academy
TN
Upper East Tennessee
TN
Old Vineyard Youth Services
NC
The Keys of the Carolinas
NC
Keystone Newport News Youth Center
VA
Marion Youth Center
VA
Pennsylvania Clinical Schools
PA
Children’s Comprehensive Services of Ohio
OH
Turning Point Youth Center
MI
Highlander Children’s Services
CA
Keystone Carmichael (Alicante School)
CA
Keystone Desert Hot Springs
CA
Keystone Elmira
CA
Keystone Grand Terrace
CA
Keystone Hemet
CA
Keystone Highlander
CA
Keystone Laguna
CA
Keystone Mar Vista
CA
Keystone Ramona
CA
Keystone Rancho Cucamonga
CA
Keystone Riverside
CA
Keystone Steele Canyon
CA
Keystone Vallejo
CA
Keystone Van Nuys
CA
Keystone Victorville
CA
Keystone Ventura
CA

---