A federal judge in Delaware has ordered home health and hospice provider VitalCaring and its private equity backers to share future profits with Encompass Health (NYSE: EHC) and Enhabit Inc. (NYSE: EHAB).

The case has a long circuitous history that dates back to 2022 when Encompass Health spinned off its home health and hospice business as a standalone company, now known as Enhabit Inc. At the time, VitalCaring CEO April Anthony was CEO of the Encompass home-based case segment.

“Encompass is entitled to one recovery,” a court opinion indicated. “That recovery takes the form of an equitable payment stream of VitalCaring’s future profits to be administered via a constructive trust, certain mitigation damages, and attorneys’ fee.”

The court ordered that 43% of VitalCaring’s future profits be placed in trust to benefit Encompass and Enhabit. The remaining 57% would go to VitalCaring’s private equity backers, the Vistia Group and Nautic Partners.

Enhabit and Encompass were joint plaintiffs in the case, with Nautic and Vistria as co-defendants.

“With a 57% share, Nautic and Vistria can recover their capital contributions and remain incentivized to grow the business,” the court’s 116-page opinion stated. “A sizable 43% portion of the proceeds will flow to Encompass due to the willful misconduct that produced VitalCaring.”

The court will appoint a trustee to oversee the trust and associated capital allocations.

Anthony founded Encompass Home Health & Hospice in 1998 as her second home health venture and has led the company as it grew from a single start-up location to a large player in the industry with a national presence. She was previously the owner and CEO Liberty Health Services and prior to that, she was founder and CEO of Homecare Homebase.

The gestation of Texas-based VitalCaring was years in the works, but it built its clinical foundation around July 2021, when its three principal owners — Anthony and the private equity firms Vistria Group and Nautic Partners — purchased an undisclosed home health agency in Louisiana. More transactions followed, building out the company’s footprint.

Encompass Health has long contended that Anthony and her colleagues allegedly used unethical practices to establish VitalCaring as the Enhabit spinoff got underway. In 2021, Encompass sought an injunction against Anthony, alleging that she violated terms of her employment agreement, including breach of non-competition and non-solicitation obligations, and for misappropriation of trade secrets.

The Delaware court’s ruling could have implications for the planned acquisition of home health giant Amedisys (Nasdaq: AMED) by UnitedHealth Group (NYSE: UNH). Helping to pave the way for that deal, Amedisys is seeking to divest certain locations to VitalCaring to address potential antitrust concerns from the U.S. Justice Department, which has filed a lawsuit to block the transaction.

Encompass Health and Enhabit trumpeted the victory in identical statements on Wednesday morning.

“Encompass Health and Enhabit launched the litigation to protect the interests of their stockholders in the wake of the illegal and outrageous conduct of Anthony and the other former officers,” the statements indicated. “Encompass Health and Enhabit believe the broader investing public will also benefit from the Delaware Court of Chancery’s clear message that intentional breaches of fiduciary duty and self-dealing by corporate officers will have severe consequences.”