Enhabit Inc., et al. v. Nautic Partners IX LP, et al.

Analysis Group was retained on behalf of Enhabit and Encompass Health, the plaintiffs in a breach of fiduciary duty litigation filed in the Delaware Court of Chancery against private equity firms Nautic Partners and Vistria Group and the home health and hospice business now known as VitalCaring Group.

The dispute arose when three senior officers at Encompass Health’s former home health and hospice division – including April Anthony, the division’s then-CEO – breached their fiduciary duties while working with the private equity firms to establish a competing business. The Delaware Court of Chancery found that Anthony and the other officers engaged in “egregious breaches of the duty of loyalty” by usurping Encompass Health’s acquisition opportunities, using its confidential information, and swaying key employees to join them at VitalCaring Group, with Nautic and Vistria aiding this misconduct.

An Analysis Group team led by Managing Principals Gaurav Jetley and Mark Howrey, Principal Laura Comstock, and Managers Kailash Neelakantan and Rebecca Regan supported affiliated expert Marc Zenner, who opined on issues related to the plaintiffs’ damages and the defendants’ projected profits. In her opinion, Vice Chancellor Lori Will relied on Dr. Zenner’s calculations to craft a remedy for Nautic and Vistria’s actions that imposed a constructive trust entitling Encompass Health and Enhabit to receive 43% of VitalCaring Group’s profits, to be paid quarterly, and 43% of the exit proceeds should VitalCaring Group be sold. The Court also awarded mitigation damages and attorneys’ fees.