ENHABIT and Encompass Health collect $43.1 million in Delaware case

Enhabit, Inc. (NYSE: EHAB) and Encompass Health Corporation (NYSE: EHC) have collected $43.1 million from three individual defendants in a Delaware Court of Chancery fiduciary breach case, according to a company statement.

The settlement represents full satisfaction of claims for attorneys' fees and mitigation damages against former officer Chris Walker, Vistria Group senior partner David Schuppan, and Nautic Partners managing director Christopher Corey. The two companies will divide the settlement proceeds substantially equally.

The collection stems from a December 2024 judgment that found "egregious breaches of the duty of loyalty" by April Anthony, Luke James, and Walker while serving as senior officers at Encompass Health's former home health and hospice division, which became Enhabit.

The Delaware court also established a constructive trust requiring Enhabit and Encompass Health to split 43% of VitalCaring Group's ongoing profits and exit proceeds if VitalCaring is sold. This trust order against other defendants in the litigation remains unaffected by the settlement.

The other defendants subject to the constructive trust include The Vistria Group, Vistria Fund III, Nautic Partners, Nautic Partners IX, and the holding company that owns VitalCaring Group.

Enhabit operates 247 home health locations and 115 hospice locations across 34 states, providing home-based healthcare services.

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