What happened
Shares of AdaptHealth (AHCO 3.97%) were down 13.8% on Thursday, after the home-healthcare solutions company announced its incoming CEO is being sued by his former employer.
So what
According to a Securities and Exchange Commission filing dated Aug. 16, AdaptHealth learned that Linde (LIN -0.15%) filed a lawsuit on Aug. 14 against Crispin Teufel, who previously served as CEO of in-home respiratory care specialist Lincare Holdings. AdaptHealth announced at the end of June that it had named Teufel as its incoming CEO, with an expected start date of Sept. 1.
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The lawsuit doesn't name AdaptHealth as a defendant, but rather seeks in part to prevent Teufel from commencing employment with AdaptHealth "for an unspecified period of time" to protect confidential information and trade secrets.
Now what
AdaptHealth, for its part, heavily implied the lawsuit is without merit, noting it has contractually prohibited Teufel from disclosing or using any confidential or proprietary information belonging to Linde.
Nonetheless, the company says it's "closely monitoring" the lawsuit and any effect it might have on Teufel's start date. In the meantime, it's no surprise to see shares of this promising healthcare stock falling in response.
