The Delaware Court of Chancery ruled in favor of Birmingham, Ala.-based Encompass Health and its home health and hospice division, Enhabit, in a lawsuit against two private equity firms and three former Encompass officers who now run home health and hospice business VitalCaring Group.
As part of the judgment, Dallas-based VitalCaring Group is required to pay 43% of the company's profits to Encompass Health and Enhabit quarterly, and 43% of the exit proceeds if and when VitalCaring Group is sold, according to a Dec. 4 news release from Encompass.
The court also awarded Encompass and Enhabit about $1.62 million in damages in addition to attorneys fees.
As part of the lawsuit, Encompass Health and Enhabit alleged that April Anthony, Luke James and Chris Walker engaged in misconduct associated with usurping acquisition opportunities, utilizing confidential company information and recruiting Encompass employees with promise of equity in a new company, all while serving as senior officers at Encompass.
The court ruled that principal members of the private equity firms Vistria and Nautic "drove the fiduciaries' efforts to covertly siphon opportunities, information, resources, and employees from Encompass," the release said.
Becker's has reached out to VitalCaring Group for comment and will update this story if more information becomes available.
Read the full court opinion here.