Delaware Court of Chancery Awards Damages and Other Relief to Encompass Health and Enhabit for Misconduct by April Anthony, Other Former Officers, and Private Equity Firms Vistria Group and Nautic Partners
Encompass Health and Enhabit have won a significant legal victory in the Delaware Court of Chancery against former senior officers April Anthony, Luke James, and Chris Walker for breaches of fiduciary duty. The court found that while employed at Encompass Health, these officers misappropriated acquisition opportunities, used confidential information, and recruited employees for a competing venture.
The Court awarded damages against private equity firms Vistria Group and Nautic Partners for aiding these breaches. The remedy includes a constructive trust entitling Encompass Health and Enhabit to 43% of VitalCaring Group's profits and future exit proceeds, approximately $1.62 million in mitigation damages, and attorneys' fees due to defendants' bad faith conduct including evidence tampering.
Encompass Health ed Enhabit hanno ottenuto una significativa vittoria legale presso la Corte di Cancelleria del Delaware contro i former dirigenti senior April Anthony, Luke James e Chris Walker per violazione del dovere fiduciario. La corte ha stabilito che, mentre erano impiegati presso Encompass Health, questi dirigenti hanno appropriato opportunità di acquisizione, utilizzato informazioni riservate e reclutato dipendenti per un'impresa concorrente.
Il tribunale ha riconosciuto dei danni contro le società di private equity Vistria Group e Nautic Partners per aver facilitato queste violazioni. La soluzione include un trust costruttivo che dà diritto a Encompass Health ed Enhabit al 43% dei profitti del VitalCaring Group e delle future uscite, circa 1,62 milioni di dollari in danni per mitigazione e spese legali a causa della condotta di cattiva fede dei convenuti, inclusa la manomissione delle prove.
Encompass Health y Enhabit han ganado una victoria legal significativa en la Corte de Cancillería de Delaware contra los ex altos funcionarios April Anthony, Luke James y Chris Walker por violaciones del deber fiduciario. La corte encontró que mientras estaban empleados en Encompass Health, estos funcionarios malversaron oportunidades de adquisición, utilizaron información confidencial y reclutaron empleados para un proyecto competidor.
La corte adjudicó daños contra las firmas de capital privado Vistria Group y Nautic Partners por ayudar a estas violaciones. La solución incluye un fideicomiso constructivo que otorga a Encompass Health y Enhabit el 43% de las ganancias del VitalCaring Group y de las futuras salidas, aproximadamente 1,62 millones de dólares en daños por mitigación, y honorarios de abogados debido a la conducta de mala fe de los demandados, incluida la manipulación de pruebas.
Encompass Health와 Enhabit는 델라웨어 채권법원에서 전 고위 임원인 April Anthony, Luke James 및 Chris Walker를 상대로 신탁 의무 위반에 대한 중대한 법적 승리를 거두었습니다. 법원은 Encompass Health에 재직 중이던 이들 임원이 인수 기회를 착복하고, 비밀 정보를 사용하며, 경쟁 기업을 위해 직원을 모집했다고 판단했습니다.
법원은 이러한 위반을 도운 사모펀드 Vistria Group와 Nautic Partners에 대해 손해배상을 명령했습니다. 구제 조치에는 Encompass Health와 Enhabit가 VitalCaring Group의 수익 및 향후 출구 수익의 43%를 받을 수 있는 구성 신탁을 포함하여, 약 162만 달러의 손해배상 및 피고의 나쁜 신뢰 행위로 인한 변호사 비용이 포함됩니다. 여기에는 증거 조작도 포함됩니다.
Encompass Health et Enhabit ont remporté une victoire juridique significative devant la Cour de Chancellerie du Delaware contre les anciens dirigeants April Anthony, Luke James et Chris Walker pour violation du devoir fiduciaire. La cour a constaté que, pendant leur emploi chez Encompass Health, ces dirigeants avaient détourné des opportunités d'acquisition, utilisé des informations confidentielles et recruté des employés pour une entreprise concurrente.
La cour a accordé des dommages-intérêts contre les sociétés de capital-investissement Vistria Group et Nautic Partners pour avoir aidé à ces violations. Le recours comprend un trust constructif donnant droit à Encompass Health et Enhabit à 43 % des bénéfices du VitalCaring Group et des futures sorties, environ 1,62 million de dollars en dommages-intérêts de mitigation et des frais d'avocat en raison de la mauvaise foi des défendeurs, y compris des falsifications de preuves.
Encompass Health und Enhabit haben einen bedeutenden rechtlichen Sieg vor dem Delaware Court of Chancery gegen die ehemaligen Führungskräfte April Anthony, Luke James und Chris Walker wegen Verletzung fiduciärer Pflichten errungen. Das Gericht stellte fest, dass diese Führungskräfte während ihrer Beschäftigung bei Encompass Health Akquisitionsmöglichkeiten unterschlagen, vertrauliche Informationen verwendet und Mitarbeiter für ein konkurrierendes Unternehmen rekrutiert haben.
Das Gericht sprach Schadensersatz gegen die Private-Equity-Firmen Vistria Group und Nautic Partners aus, da sie diese Verstöße unterstützt haben. Die Abhilfe umfasst einen konstruktiven Trust, der Encompass Health und Enhabit 43 % der Gewinne der VitalCaring Group sowie zukünftige Ausstiegsgewinne zuspricht, etwa 1,62 Millionen Dollar an Schadensersatz und Anwaltskosten aufgrund des bösen Glaubens der Beklagten, einschließlich der Beweismittelmanipulation.
- Court victory grants 43% of VitalCaring Group's profits and future exit proceeds to Encompass Health and Enhabit
- Awarded $1.62 million in mitigation damages plus attorneys' fees
- Successfully protected stockholder interests against corporate misconduct
- Company suffered from misappropriation of business opportunities by former senior officers
- Experienced unauthorized use of confidential information
- Lost key employees to competitor through improper recruitment
Insights
The Delaware Court of Chancery's ruling represents a significant legal victory for Encompass Health and Enhabit, with substantial financial implications. The court's decision to award
The ruling sets a strong precedent for corporate governance cases, especially regarding fiduciary duties of senior executives. The court's findings of evidence tampering and deliberate concealment, leading to additional attorneys' fees awards, underscore the serious nature of the misconduct. This decision strengthens protections for public companies against executive self-dealing and corporate opportunity theft.
This ruling provides significant value creation for EHC shareholders through multiple channels. The
The decision also protects EHC's competitive position in the home health and hospice sector by deterring future attempts at corporate opportunity theft. The constructive trust mechanism effectively converts what was intended to be a competing venture into a passive investment vehicle for EHC and Enhabit, potentially providing meaningful upside without operational costs.
The case was the subject of a 7-day trial in December 2023. After considering "the damning record presented at trial," the Court found that, while employed by Encompass Health,
In addition to finding breaches of fiduciary duty by
As a remedy for these actions, the Court of Chancery imposed a constructive trust entitling Encompass Health and Enhabit to receive 43 percent of VitalCaring Group's profits, to be paid quarterly, and 43 percent of the exit proceeds if and when VitalCaring Group is sold. The Court also awarded mitigation damages in the amount of approximately
Encompass Health and Enhabit launched the litigation to protect the interests of their stockholders in the wake of the illegal and outrageous conduct of
The defendants in the case who were found liable include Walker, The Vistria Group, Vistria Fund III, Vistria senior partner David Schuppan, Nautic Partners, Nautic Partners IX, Nautic managing director Christopher Corey, and the holding company that owns VitalCaring Group.
About Encompass Health
Encompass Health (NYSE: EHC) is the largest owner and operator of rehabilitation hospitals in
About Enhabit Home Health & Hospice
Enhabit Home Health & Hospice (NYSE: EHAB) is a leading national home health and hospice provider working to expand what's possible for patient care in the home. Enhabit's team of clinicians supports patients and their families where they are most comfortable, with a nationwide footprint spanning 256 home health locations and 112 hospice locations across 34 states. Enhabit leverages advanced technology and compassionate teams to deliver extraordinary patient care. For more information, visit ehab.com.
Forward-Looking Statements
Statements contained in this press release which are not historical facts, such as those relating to the likelihood, timing and allocation of any monetary remedies recovered by Encompass Health and Enhabit, are forward-looking statements. In addition, Encompass Health or Enhabit may from time to time make forward-looking public statements concerning the matters described herein. All such estimates, projections, and forward-looking information speak only as of the date made, and neither Encompass nor Enhabit undertakes a duty to publicly update or revise such forward-looking information, whether as a result of new information, future events, or otherwise. Such forward-looking statements are necessarily estimates based upon current information and involve a number of risks and uncertainties. Actual results or events may differ materially from those anticipated in these forward-looking statements as a result of a variety of factors. While it is impossible to identify all such factors, factors which could cause actual results or events to differ materially from those anticipated include, but are not limited to, an appeal of the verdict by the defendants and any related adverse appellate decision; the financial position of the defendants to the extent it may limit the timeliness or ability of the defendants to deliver any monetary remedy awarded, including future profits and exit proceeds, if any, to be delivered through the constructive trust ordered by the court; and other factors which may be identified from time to time in Encompass Health's or Enhabit's SEC filings and other public announcements, including in the Forms 10-K for the year ended Dec. 31, 2023 and Forms 10-Q for the quarters ended Mar. 31, 2024, Jun. 30, 2024, and Sept. 30, 2024 for either Encompass Health or Enhabit.
Encompass Health contacts: | Enhabit contacts: |
Media: Polly Manuel | 205 970-5912 | Media: Erin Volbeda | 972 338-5141 |
Investor Relations: Mark Miller | 205 970-5860 | Investor Relations: Jobie Williams | 469 860-6061 |
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SOURCE Encompass Health Corp.
FAQ
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