Allegations of embezzlement contained in a civil lawsuit filed against former ViaQuest CEO Richard Johnson and its ex-CFO, Michael Bell, are untrue and part of a “business dispute” between the company’s leadership and the private equity firm Council Capital, Johnson told CFO Dive.
“Council Capital's allegations are false, and we categorically deny them,” Johnson told CFO Dive in a LinkedIn message in response to a request for comment on the lawsuit. While the private equity firm is not named among the plaintiffs which filed the suit, it is the majority owner of ViaQuest, Johnson told CFO Dive.
Johnson served as CEO of the company until this May, while Bell, his son-in-law, departed from his CFO seat in April after assuming the role at some point in 2019.
“We believe this lawsuit is part of a broader effort to create leverage in a business dispute rather than a reflection of the actual facts,” he said. “We welcome the opportunity to present the evidence in court, where we are confident the truth will prevail. Out of respect for the judicial process, we will not comment further while the litigation is pending.”
The ownership structure of the healthcare company, which serves approximately 20,000 individuals and families across Ohio and Indiana, appears largely split between Johnson and Council Capital and is a critical element detailed in the suit.
The complaint, filed Monday in Delaware’s Chancery Court, alleges that Johnson and ex-CFO Bell misused company funds in a “clandestine scheme,” tapping resources for golf outings and football tickets, as well as funneling millions in company funds to Johnson-owned entities, CFO Dive previously reported.
Council Capital, a Tennessee-based PE firm which invests in the healthcare industry, owns 41.5% of ViaQuest Equity, which, though itself a non-party, is the “indirect parent” of the three plaintiffs which brought the claims: ViaQuest Acquisitions, ViaQuest Holdings, and ViaQuest LLC, according to the complaint.
Co-investors have a 29.1% ownership stake in ViaQuest Equity, while Johnson maintains the remaining 29.4% stake.
Johnson is also the majority or sole owner of several other entities at the heart of the legal dispute, which includes claims that the former CEO, with the help of Bell, misappropriated ViaQuest resources by funneling them to Johnson-owned entities. For example, the suit alleges Johnson violated the terms of an agreement between ViaQuest and Hospice Holdings — an entity he owns — when the latter purchased ViaQuest’s hospice business.
Though the purchase agreement stated the bank accounts of both entities would be separate, the suit alleges Johnson and Bell diverted over $12.9 million from ViaQuest to Hospice Holdings’ accounts to pay Hospice obligations.
Bell did not respond to requests for comment on the allegations contained in the suit. Council Capital did not respond to requests for comment on the suit or Johnson’s assertions that the claims detailed in the complaint are false.
