Enhabit and Encompass Health Collect $43.1 Million from Individual Defendants in Delaware Fiduciary Breach Case

Key Terms

fiduciary breach regulatory

A fiduciary breach occurs when a person or organization that has a legal duty to act in someone else’s financial best interest instead acts negligently, dishonestly, or puts their own interests first. For investors this matters because such breaches can cause direct losses, damage confidence, invite regulatory fines and lawsuits, and hurt a company’s reputation and share price — like a trusted advisor taking a shortcut that costs the client money.

duty of loyalty regulatory

A legal responsibility that requires directors and officers to put the company’s interests ahead of their own personal gain, avoiding self-dealing or conflicts of interest. For investors, it matters because it helps ensure management makes decisions to protect shareholder value—like a guardian who must use someone’s money only for that person’s benefit—reducing the risk of insiders enriching themselves at the expense of other owners.

constructive trust regulatory

A constructive trust is a court-imposed rule that treats property or funds held by one party as if they were being held for the benefit of the true owner, when keeping them would be unfair. Think of it like a judge telling someone who took or wrongly kept your money to hold it as a caretaker rather than as their own; for investors, this can restore ownership, block a wrongful sale, or create a claim on assets that affects valuations and control of a company.

mitigation damages regulatory

Mitigation damages are the reduction of a money award in a legal claim when the injured party failed to take reasonable steps to limit their loss. Think of it like a homeowner who ignores a small leak and lets it flood — a court will subtract losses that could have been avoided if the person had acted sensibly. For investors, mitigation affects the size of legal liabilities, reserves and potential cash outflows tied to lawsuits or contract disputes.

DALLAS--(BUSINESS WIRE)-- Enhabit, Inc. (NYSE: EHAB) announced today that, along with Encompass Health Corporation (NYSE: EHC), they have collected $43.1 million in full satisfaction of their claims for attorneys’ fees and mitigation damages in the Delaware Court of Chancery against former officer Chris Walker, Vistria Group senior partner David Schuppan, and Nautic Partners managing director Christopher Corey. These claims related to the December 2024 judgment in favor of Enhabit and Encompass Health, finding “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 is now Enhabit. Enhabit and Encompass Health will divide the settlement proceeds substantially equally.

The Court of Chancery also imposed a constructive trust through which Enhabit and Encompass Health will split 43% of VitalCaring Group’s ongoing profits and exit proceeds if and when VitalCaring is sold. The constructive trust order against the other defendants in the Delaware litigation — The Vistria Group, Vistria Fund III, Nautic Partners, Nautic Partners IX, and the holding company that owns VitalCaring Group — is unaffected by this settlement.

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 Enhabit, are forward-looking statements. In addition, 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 Enhabit does not undertake 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 judgment 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 Enhabit’s SEC filings and other public announcements, including in the Form 10-K for the year ended Dec. 31, 2024 and Forms 10-Q for the quarters ended Mar. 31, 2025, Jun. 30, 2025, and Sept. 30, 2025.

About Enhabit Home Health & Hospice

Enhabit Home Health & Hospice (Enhabit, Inc.) 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 247 home health locations and 115 hospice locations across 34 states. Enhabit leverages advanced technology and compassionate teams to deliver extraordinary patient care. For more information, visit enhabit.com.

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Media contact

Erin Volbeda

media@ehab.com

972-338-5141

Investor relations contact

Bob Okunski

investorrelations@ehab.com

469-860-6061

Source: Enhabit, Inc.