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updated: 2/20/2013 10:04 AM

Lawsuit filed to block Addus HomeCare business sale

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A lawsuit has been filed to block Palatine-based Addus HomeCare's sale of its home health division to LHG Group.

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Advantage Health Systems filed the lawsuit in Delaware chancery court, claiming the sale constitutes a breach of certain provisions of an agreement relating to an up to $1 million earn-out entered into between the Addus and Advantage in connection with the Addus' acquisition of CarePro in 2010. The lawsuit seeks a temporary restraining order and a preliminary injunction against the Palatine-based company's sale.

Addus announced the sale of its home health division to LHC Group for $20 million in cash earlier this month. The sale includes 19 home health agencies and two hospice agencies in five states. Specifically, LHC Group will acquire 100 percent of the assets of the business in Arkansas, South Carolina and Nevada. In Illinois and California, LHC Group will acquire 90 percent of the business, with Addus retaining a 10 percent ownership interest in those locations.

The company, in a statement, said Advantage's actions are without merit and will take appropriate legal action as necessary to preserve the company's rights. The company plans to continue on with the agreement, which they expect to close around Feb. 28.

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