A Philly jury hit a Main Line urgent-care business owner with an $8.5 million verdict for misleading a Chinese investor
Shouhui Zhu invested $5 million in Edward Silverman's business, Premier Urgent Care.
A Philadelphia jury hit a Main Line businessman with an $8.5 million verdict Monday for allegedly misleading a Chinese investor when entering a partnership to open urgent-care centers.
In 2013, Edward Silverman, a physician and businessman, and Shouhui Zhu, a Chinese investor, began discussions over a partnership to launch five locations of Premier Urgent Care in the Philadelphia area. Silverman established Premier in 2006 and had nine locations in the region by 2013.
Zhu invested $5 million, based on what he was told about the centers’ potential via a translator, but did not receive any of the proceeds when the urgent-care locations were sold, contended his lawsuit, filed in Philadelphia’s Common Pleas Court in 2018.
Because Zhu doesn’t speak English, he relied on a translator whom Silverman retained, his attorneys said in court filings. He believed the translator was a neutral party, but later learned the translator received payments based on the amount the investor contributed to the urgent cares, Zhu’s attorneys said in court records.
Based on claims that the urgent cares would be “highly profitable” and the locations would break even within a year, Zhu invested $5 million to open five new centers. The investment also allowed Zhu to apply for a permanent residence in the United States through a government immigrant investor program.
By 2015, the relationship between Silverman and Zhu soured, with the investor claiming his U.S. partner cut him off and stopped providing financial updates.
Premier Urgent Care wasn’t “highly profitable.” Two of the five new centers shut down by the end of 2017, and the three others operated with losses. Zhu never received his money back, his lawyers claimed.
In 2018, Silverman sold Premier Urgent Care to Tower Health for $25 million, according to court records. The sale included the three remaining locations that were funded with Zhu’s investment. Attorneys for Zhu say that Silverman personally gained $17 million without sharing any of the proceeds.
Zhu filed his lawsuit that year. Zhu’s lawyers accused Silverman of failing to retain relevant files and failing to provide financial documents related to the Tower transaction.
“There is only one point, one point, in this case: Defendant Silverman stole $5 million from Mr. Zhu,” Edward Kang, a Kang Haggerty attorney who represented Zhu, told the jury in his closing argument Monday.
The urgent-care locations continued to be financial losers. Tower closed seven locations in 2022 as their leases expired, and sold nine more in 2023 for $200,000.
Albert Ciardi, the Ciardi Ciardi & Astin attorney who represented Silverman, told jurors that Zhu was a sophisticated self-made millionaire who received the information he needed to get the full financial picture before investing. But Zhu didn’t read the documents, he said, even when they were translated to Chinese for his benefit.
“He didn’t look at the financials,” Ciardi told the jury in his closing argument.
The case boils down to an investment that didn’t work well, he argued, with businesses that weren’t as profitable as either party hoped.
“Any lack of knowledge by Zhu about the nature of the business or the deal was the result of his own lack of due diligence,” Silverman’s attorney said in court filings.
Ciardi declined to comment on the verdict.
After a five-day trial, a unanimous jury returned an $8.5 million verdict in favor of Zhu on Monday after a few hours of deliberation. The verdict included $2.7 million in punitive damages, intended to punish bad actors, after finding evidence of conduct that was “malicious, wanton, willful, oppressive, or shows reckless indifference to the interests of others,” according to the verdict sheet.
The rest of the verdict is in compensatory damages: $4 million against Silverman for misrepresenting facts about the business to Zhu and $1.8 million against Premier Urgent Care for depriving Zhu’s company of its ownership rights.
The jurors also found that Silverman breached his fiduciary responsibility and the joint venture agreement with Zhu, but did not award damages on those charges.
Kyle Garabedian, who was among Zhu’s attorneys, said that his client is appreciative of the jury and the justice system.