Vice Chancellor Joseph Slights.

A Delaware Chancery Court judge Thursday allowed the former director of a Delaware health information company to pursue claims that the firm's founder had cheated him out of stock options he was promised for joining the board in 2005.

Vice Chancellor Joseph R. Slights III, however, dismissed a slate of other claims against CentriHealth Inc. and its board for an unreasonable delay, in a ruling that explored the boundaries of the equitable doctrine of laches.

While laches had barred some of plaintiff Richard Forman's claims, Slights found that the April 2018 complaint had established an initial case against CentriHealth founder and chairman Ralph Korpman for allegedly concealing from Forman that his stock options under a 2006 plan were no longer valid following Forman's resignation from the board.

According to the complaint, Korpman had promised Forman that his options would not terminate after he quit as a director in 2010, citing a “lack of corporate governance at the company.” It wasn't until 2017, Forman claimed, that the company told him in a letter from its lawyer that his options had actually expired seven years earlier.

In a 41-page memorandum opinion, Slights said that as CentriHealth's chairman and controlling stockholder, Korpman owed Forman a fiduciary duty to “act with honesty,” and credited assertions that that the founder's alleged lies had led Forman to believe that he was in no danger of forfeiting his rights at the time of his departure.

“Forman has well-pled that Korpman failed to fulfill that duty,” Slights wrote. “Whether and to what extent Forman's failure to inform himself of the terms of the CentriHealth stock option plan, either as a beneficiary of that plan or as a director who voted to approve the plan, will affect the viability of his claims, as a matter of laches or on the merits, are questions that must await further discovery to decide.”

But Forman did not fare as well with regard to claims that he had been swindled out of so-called “founder's shares,” which equated to a 1-percent stake in the firm, which was bought by UnitedHealth Group Inc. in 2017.

According to the opinion, a “pattern” emerged over the course of 11 years, where Forman would ask for confirmation that he owned the founder's shares, but Korpman would either avoid the question entirely or provide materials that were not responsive to the request. Sometimes, Slights said, Forman would wait years to repeat his inquiry, only to receive the same answer.

According to Slights, it should have been apparent to Forman no later than 2013 that the company had no intention of acknowledging his shares, making his claims “markedly untimely.”

“Forman knew well that the company had not acknowledged his claimed ownership of Founder's Shares; and yet he did nothing press his claim,” Slights said.

“Whether viewed as asserting a claim with unreasonable delay through the lens of the analogous statute of limitations or, more fundamentally, as a failure to act with vigilance when seeking equity, Forman's inexplicable delay in bringing his claims regarding the founder's shares cannot be countenanced.”

An attorney for Forman did not return a call seeking comment on the ruling, and counsel for Korpman and CentriHealth was not immediately available to comment.

Forman is represented by Michael A. Weidinger and Joanne P. Pinckney of Pinckney, Weidinger, Urban & Joyce in Wilmington.

The defendants are represented by Bruce C. Doeg, John S. Hicks and Christopher E. Thorsen of Baker, Donelson, Bearman, Caldwell & Berkowitz in Nashville, Tennessee.

The case is captioned Forman v. CentrifyHealth.