Former ViaQuest CEO Richard Johnson told CFO Dive that allegations of misappropriation in a civil lawsuit against him and former CFO Michael Bell are false, calling the suit part of a "commercial dispute" between company leadership and private equity firm Council Capital.

"Council Capital's allegations are false, and we strongly deny them," Johnson said in a LinkedIn message to CFO Dive in response to a request for comment on the lawsuit. Although the private equity firm is not named as a plaintiff in the suit, Johnson told CFO Dive it is the majority shareholder of ViaQuest.

Johnson served as the company's CEO until May of this year, while his son-in-law Bell stepped down as CFO in April, having assumed the role at some point in 2019.

"We believe this lawsuit is part of a broader effort to create leverage in a commercial dispute, rather than a reflection of actual facts," he said. "We look forward to presenting evidence in court, and we believe the truth will prevail. Out of respect for the judicial process, we will not comment further while the litigation is ongoing."

The healthcare company serves approximately 20,000 individuals and families in Ohio and Indiana, and its ownership structure appears to be held primarily by Johnson and Council Capital, a key element detailed in the lawsuit.

The lawsuit, filed Monday in Delaware's Court of Chancery, accuses Johnson and former CFO Bell of misusing company funds in a "secret scheme,"directing resources toward golf outings and football ticketsand transferring millions of dollars in company funds to entities owned by Johnson, CFO Dive previously reported.

Council Capital, a Tennessee-based private equity firm investing in the healthcare industry, holds a 41.5% stake in ViaQuest Equity. According to the lawsuit, ViaQuest Equity itself is not a party to the suit, but it is the "indirect parent company" of the three plaintiffs bringing the claims—ViaQuest Acquisitions, ViaQuest Holdings, and ViaQuest LLC.

Co-investors hold a 29.1% ownership stake in ViaQuest Equity, while Johnson holds the remaining 29.4%.

Johnson is also the majority or sole owner of several other entities at the center of the legal dispute, with the lawsuit alleging that the former CEO, with Bell's help, misappropriated resources by transferring ViaQuest resources to Johnson-owned entities. For example, the suit claims Johnson violated the terms of an agreement between ViaQuest and Hospice Holdings, which he owns, when the latter acquired ViaQuest's hospice business.

Although the purchase agreement stipulated that the bank accounts of the two entities should remain separate, the lawsuit alleges Johnson and Bell transferred more than $12.9 million from ViaQuest to Hospice Holdings' accounts to pay Hospice's debts.

Bell did not respond to a request for comment on the lawsuit's allegations. Council Capital did not respond to a request for comment on the lawsuit or Johnson's claim that the allegations are false.