CalPERS was ordered to pay about $52 million to a former business partner in a dispute over fees generated by an investment in a string of Florida nursing homes.
A judge in Delaware ruled last month against CalPERS in a lawsuit filed by the former partner, an affiliate of New York investment banking firm Shattuck Hammond Partners. The firm is now known as Morgan Keegan Healthcare Investment Banking.
The lawsuit stems from a partnership formed in 2001. The firm and the California Public Employees' Retirement System invested $250 million in a group of senior housing and skilled-nursing facilities in Florida.
Within a few years, a disagreement arose over the fees CalPERS was supposed to pay the firm for managing the investment. The fees were based on independent appraisals of the value of the properties, and on two occasions CalPERS pressured the appraisal firms to revise estimates downward, according to the court's ruling.
The Shattuck firm left the partnership in late 2008 and sued in a Delaware court a few months later.
CalPERS said it had prepared for a possible loss in the lawsuit.
"CalPERS had planned and set aside reserves for this outcome," the pension fund said in a prepared statement Wednesday. "The decision will have no material impact on our performance. While we disagree with the court's decision, we respect the time and effort the court spent on this matter."
Call The Bee's Dale Kasler, (916) 321-1066. Follow him on Twitter @dakasler.