Two private equity firms aided and abetted "egregious breaches" of fiduciary duty, a Delaware Chancery Court judge ruled earlier this week. And it could take a big bite out of their fund returns.

Why it matters: The judge's remedy is novel, and could become a blueprint for other courts.

• In short, plaintiff Encompass Health will be entitled to 43% of any profits and sale proceeds from VitalCaring Group, a portfolio company of Nautic Partners and Vistria Group.

Catch up quick: Encompass is a home health and hospice firm formed by April Anthony, which she and a private equity firm sold in 2014 to a publicly traded company that later rebranded as Encompass.

• Anthony continued to run the homecare division, but eventually chafed at how the broader business was being run. At first she tried to buy the company, in secret partnership with Nautic and Vistria, and then later chose to form a new, competitive company with her new PE partners.
• As the court found during its seven-day trial, Anthony repeatedly breached fiduciary duties to Encompass, with the PE firms serving as "active participants."

Zoom in: Some of Anthony's misdeeds came while she was still employed at Empass, sharing confidential information with the PE firms (to enable the failed buyout) or identifying acquisition targets for NewCo without first sharing those opportunities with Encompass.

• Some was after she left, directly recruiting senior employees and negotiating deals in violation of her noncompete agreements.
• Nautic and Vistria helped her, but took pains to keep it secret. For example, sometimes they sent emails to Anthony's husband instead of to her, or tried to effectively launder communications via law firms. They also used codenames, with Vistria referring to Anthony as "Voldemort" or "our Idaho friend."
• Moreover, as the judge noted, both firms (and the offending partners at those firms) had been previously enmeshed in similar litigation.

The bottom line: Nautic, Vistria and Anthony have invested hundreds of millions of dollars into VitalCaring, but it's been hit hard by an industry downturn and has yet to turn a profit. As such, the judge couldn't really grant Encompass' request that profits be disgorged.

• Instead, she settled on a bespoke version of what's known as a constructive trust. The basic idea is to make sure the bad actors are still incentivized to make the company successful, but to share rewards with the aggrieved party.
• As the judge wrote: "Equity cannot grant the defendants a pass. The private equity firms remain years away from their anticipated exit. They may do so at a considerable profit — as they have in prior investments that initially faltered."
• Neither Nautic nor Vistria responded to interview requests.

President-elect Trump said he will nominate Gail Slater as head of the Justice Department's antitrust division, to succeed Jonathan Kanter.

Why it matters: This is a kick in the teeth for some of Trump's venture capital supporters, who had hoped that the incoming administration would make it easier for Big Tech to buy their portfolio companies.

• Slater is a Big Tech hawk, despite having worked in the industry, and seems to have a mandate from Trump to keep cracking down.
• Less clear is how Slater views non-tech antitrust, particularly in the airline and telecom sector over which DOJ has exclusive jurisdiction.

The bottom line: Slater most recently was economic policy adviser to VP-elect (and Lina Khan fan) JD Vance, and served as a tech policy adviser to the National Economic Council during Trump's first term.

• Between those roles, she spent time at both Fox Corp. and Roku.
• Previously, Slater spent a decade with the Federal Trade Commission, including as an adviser to a Democratic FTC commissioner.

• Tractian, an Atlanta-based manufacturing AI startup focused on reducing downtime, raised $120m in Series C funding. Sapphire Ventures led, and was joined by General Catalyst, Next47, and NGP Capital. tractian.com

🚑 Cleerly, a New York-based provider of early detection for heart problems, raised $106m in Series C extension funding. Insight Partners led, and was joined by Battery Ventures and insiders. axios.link/4g4CRHK

• Lawhive, an AI platform for lawyers, raised $40m in Series A funding. GV and TQ Ventures co-led, and were joined by Balderton Capital, Jigsaw, Episode 1 and Premier League players Harry Maguire and Reece James. axios.link/3VnsBlk

• Sage Solutions, a provider of software for senior living communities, raised $35m in Series B funding. IVP led, and was joined by Friends & Family Capital, Plus Capital and insiders Animo Ventures, Distributed Ventures, Goldcrest Capital, and Maveron. axios.link/41hllev

• Tuskira, an SF-based threat defense platform, raised $28.5m. Intel Capital and SYN Ventures co-led, and were joined by Sorenson Capital, Rain Capital, and Wipro Ventures. axios.link/4ilIR04

• DPL Financial Partners, a Louisville, Ky.-based platform for commission-free annuities, raised $23m in Series C funding round co-led by Eos Ventures and TIAA Ventures. axios.link/4gClxK3

• FibreCoat, a German space materials startup, raised over €20m in Series B funding from NewSpace Capital, Goose Capital, Nova Saint-Gobain, 212 NexT, Otto Krahn New Business, Convergent Ventures, and TiE. axios.link/3OIhxvi

• BRM, a vendor management startup, raised $15m in Series A funding led by Caffeinated Capital, per Axios Pro.

• Maybern, a provider of software that automates calculations for private fund managers, raised $14m in Series A funding. Primary Ventures led, and was joined by Friends and Family Capital, Camber Creek, Human Capital, Grafton Street Partners, and MetaProp. maybern.com

• Union, a cross-chain zero-knowledge settlement layer, raised $12m in Series A funding. Gumi Cryptos Capital and Longhash Ventures co-led, and were joined by Borderless Capital. union.build

• Lucra, a New York-based provider of B2B gamification software, raised $10m from 7GC, SeventySix Capital, Steve Kuhn, Giannis Antetokounmpo, Ark Invest, and Simplex Equity, per Axios Pro.

🚑 Amae Health, an SF-based metal health care startup, raised $6m from Cedars-Sinai. amaehealth.com

• Across AI, developer of a "dynamic memory system," raised $5.75m in seed funding co-led by Cota Capital and Village Global. axios.link/3OGtBNL

• CAT Labs, a Miami-based startup that helps government agencies fight AI and crypto-enabled crime, raised $5.4m in seed funding. M13 led, and was joined by Castle Island Ventures, CMT Digital, and Hash3. axios.link/4glI7Xc

• Fabri, a Boston-based advanced manufacturing startup focused on metal casting and foundry technology, raised $5m in seed funding. Lavrock Ventures led, and was joined by RTX Ventures, Tenon Ventures, and SBXi. fabriusa.com

• Growl, an Austin-based home fitness startup, raised $4.8m in seed funding. Skip Capital led, and was joined by Kima Ventures and Teampact Ventures. joingrowl.com

• Khloud, a snackmaker being formed by Khloé Kardashian and Kris Jenner, has raised $4.5m of the $10m it's seeking, per an SEC filing. axios.link/4ie5YcS

• Fiamma, a Singapore-based bitcoin and ZK infrastructure startup, raised a $4m seed round co-led by Lightspeed Faction and L2IV, with participation from Astera Ventures, Contribution Capital, Sat Ventures, Chapter One, and FoundersHead. fiammachain.io

🌎 Rosy Soil, a New York-based developer of soil from carbon dioxide, raised $3.6m in seed funding from Draper Associates, Superorganism, Climate Capital, and Boost VC. rosysoil.com

• Briefcase, a London-based accounting automation startup, raised $3m in seed funding. Earlybird led, and was joined by Entrepreneur First and Tiny. axios.link/3BcP9OV

• Sightglass, an IR platform for private markets, raised $3m in seed funding from Base10 Partners, per Axios Pro.

⚡ Realta Fusion, a Madison, Wis.-based fusion energy startup, raised funding from TitletownTech. realtafusion.com

• AirX Climate Solutions, a portfolio company of Gryphon Investors, acquired Powrmatic USA, a Finksburg, Md.-based specialty HVAC designer and manufacturer. airxcs.com

🌎 Altus Capital Partners acquired Air Innovations, a Houston maker of environmental control units for manufacturers and distributors. airinnovationsllc.com

• Cresset, a Chicago-based RIA with about $60b in AUM, raised $150m from Constellation Wealth Capital. cressetcapital.com

🚑 Duke Street acquired ForLife, a German maker of ostomy care products, and British stoma care specialist Trio Healthcare. axios.link/3BpmI09

⚡ EQT agreed to buy German battery storage company Ju:niz Energy. axios.link/41qVVeq

• ESR Group (HK: 1821), a real estate fund manager, received a $7.1b buyout offer from a consortium that includes Starwood Capital Group, Warburg Pincus, Sixth Street, SSW Partners, and Qatar Investment Authority. The group already holds around a 40% stake, and this could be the largest take-private from the Hong Kong exchange since 2021. axios.link/3OEw2QK

• Kudu Investment Management acquired a passive minority stake in RiverNorth Capital Management. axios.link/4inr5cM

• Gryphon Investors is in talks to buy sparkling water brand Spindrift Beverage for upwards of $650m, per the WSJ. Spindrift has raised around $75m from firms like VMG Partners and KarpReilly. Axios Pro previously reported on the Spjndrift process, as part of the broader beverage deal market.

• IRIS Software, a portfolio company of Intermediate Capital Group and Leonard Green & Partners, agreed to buy Dext, a London-based bookkeeping automation platform, from Hg. axios.link/4igQh4F

• SK Capital Partners acquired South Korea's Spectra Confectionery, a Canadian maker of decorative toppings. spectraconfectionery.com

• Stellar V Capital, a SPAC formed by Greek shipping execs, filed for a $150m IPO. axios.link/3ODZl66

• Sokin, a London-based international payments startup, acquired Norwegian fintech Settle Group. Sokin recently raised $31m from firms like Morgan Stanley, while Settle was seeded by backers like MFG Invest. axios.link/41qVtwK

Source: Giphy

• Conagra (NYSE: CAG) is exploring a sale of canned pasta brand Chef Boyardee, which could fetch over $500m, per Reuters. axios.link/4iAFIKb

• Amundi (Paris: AMUN) is weighing a takeover offer for Allianz Global Investors, per Bloomberg. axios.link/3ZGGbmE

🚑 Aya Healthcare agreed to acquire health-care staffing firm Cross Country Healthcare (Nasdaq: CCRN) for $65m in cash, or $18.61 per share (67% premium to Tuesday's closing price). axios.link/4faqY1G

⚡ NEOEN, a French renewables company, said it will sell some Australian generation and storage assets to HMC Capital, to appease antitrust regulators ahead of its $6.41b takeover by Brookfield Asset Management. axios.link/49lTPOW

⚽ Stephen Rosen (Resilience Capital Partners) and Helmy Eltoukhy (Guardant Health chair) agreed to buy English Premier League club Sheffield United. axios.link/3ZCI4QV

🚑 Teleflex (NYSE: TFX) is in talks to buy the vascular intervention unit of Germany's Biotronik, which could fetch around €500m, per Bloomberg. axios.link/41mTpWH

• Walmart (NYSE: WMT) completed its $2.3b cash acquisition of smart TV maker Vizio. axios.link/3ZEtUic

• 1863 Ventures, a nonprofit focused on providing capital and advice to underrepresented founders, will transition into a for-profit called New Majority Ventures. axios.link/4fX1Cpa

• ICG Advisors is raising up to $300m for a third private credit opportunities fund, with around half already committed, per an SEC filing.

• LocalGlobe, a European VC firm, is raising its eighth fund, per an SEC filing.

• Sideline Group, a new VC firm led by Greg Mazlin (ex-Tiger Global) is raising $75m for its debut fund, per an SEC filing.

• Valeas, an SF-based PE firm led by Rob Little and Ed Woiteshek (ex-Hellman & Friedman), raised $600m for its debut fund. valeas.com

Bitcoin hit $100k for the first time yesterday, and so far has traded higher.

• Sure, it's just a fat round number. But it also reflects widespread optimism for the future of digital assets, and bitcoin in particular, Axios Crypto's Brady Dale writes.
• It also comes on the same day that Trump picked Paul Atkins, a crypto community favorite, for SEC chair.