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Lawsuit breaks apart Integrity Home Care trio

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Integrity Home Care founder Philip Melugin is selling his shares after reaching a settlement agreement this week related to his December firing by Integrity partners Greg Horton and Paul Reinert, according to the attorneys involved.

Melugin filed suit Dec. 23 against Integra Healthcare Inc., also known as Integrity Home Care, and executives Horton and Reinert, the company’s other two shareholders. Melugin was fired from his president post Dec. 19, according to court filings. In the suit, Melugin claimed his firing was unlawful, and he alleged the partners attempted to force a buyback of his shares at an undervalued rate. According to court records, Melugin and Horton each owned 45 percent of the company, and Reinert held a 10 percent stake.

“A settlement has been negotiated as of (Feb. 14),” said Lathrop & Gage attorney Frank Evans III, who represented Integra Healthcare Inc. and defendants Horton and Reinert. “Our expectation is that the case will be dismissed in the near future. The company Integra will acquire all of Mr. Melugin’s interest.”

Terms of the out-of-court settlement were not disclosed.

“It was basically a business break-up of the three owners of Integra,” said Jim Tilden, attorney for Kansas City-based Seigfried Bingham Levy Selzer & Gee, who represented Melugin. “They had some differences as to how the company should be run and were unable to resolve them.”

Integrity Home Care, 2960 N. Eastgate Ave., provides home health and related services with 2,500 employees across seven offices in Missouri and Kansas.

A trial with Greene County Circuit Court Judge Calvin Holden presiding had been scheduled for March 28 to settle a dispute over the interpretation of the original shareholder’s agreement. Melugin’s suit claimed that he had the right to force a buyout of his partners’ shares or sell his own, known as a Russian roulette provision, according to Tilden. The defendants claimed they were within their rights to terminate Melugin and buy back his shares at a lesser value.

Tilden, who expects the case to be officially dismissed within 10 days, said the suit itself was asking the court to determine which provision the business partners should follow.

Integrity Home Care recorded rapid growth in recent years, ranking first in Springfield Business Journal’s 2006 Dynamic Dozen awards on 2005 revenues of $20.5 million and a three-year revenue growth rate of 214 percent. The company posted 2008 revenues of $40 million, according to Springfield Business Journal archives.

For more information, look to the Feb. 21 Springfield Business Journal print edition.[[In-content Ad]]


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