Two longtime nursing home operators must stand trial to face a whistle-blower's allegations that the father and son took kickbacks related to the 2004 sale of a pharmacy company, a federal judge has ruled.

The ruling by District Judge John Tharp Jr. comes two weeks after the pharmaceutical giant Omnicare Inc. agreed to pay $17.2 million to the government to settle its part of the ongoing lawsuit, according to attorneys involved in the case.

The 6-year-old suit alleges that Omnicare paid Chicago nursing home operators Philip Esformes and his father, Morris Esformes, a kickback by significantly inflating the price Omnicare paid in 2004 for Total Pharmacy, which was partially owned by Philip Esformes.

The plaintiff, former Total Pharmacy employee Maureen Nehls, states in the suit that Omnicare's $32 million purchase of Total included a multimillion-dollar kickback to secure long-term pharmacy contracts with more than two dozen nursing homes the Esformeses operated or influenced.

In a 38-page order handed down Tuesday, Tharp rejected the Esformes family's motion for summary judgment.

According to Nehls, Philip Esformes paid $4,000 for a 40 percent stake in Total Pharmacy in 2002, then reaped $7 million less than two years later in the Omnicare deal.

Total Pharmacy became so valuable because Morris Esformes had directed all of the nursing homes he owned to abandon their current pharmacy providers and replace them with Total, Nehls alleged.

It would not be unreasonable for a jury to infer that Philip Esformes "largely paid for his substantial stake in Total Pharmacy by delivering the Esformes Homes as customers," Tharp wrote in his order Tuesday.

After Omnicare acquired Total Pharmacy, Morris Esformes also solicited and received from two part owners of Total about $800,000 in donations to a religious school he built, according to Nehls.

Morris Esformes vigorously disputed that the donations were part of a kickback scheme. There is no allegation that Esformes personally received any money from the sale to Omnicare, and he has "absolutely done nothing wrong," his attorney Harvey Tettlebaum said.

"Philip Esformes continues to insist this lawsuit is baseless and wrong-minded," attorney Michael Pasano said Wednesday. "His participation in Total Pharmacy was appropriate, and the sale to Omnicare was arm's-length and proper. Philip Esformes has done nothing wrong and looks forward to his opportunity in court to clear his name."

Omnicare, which supplies medicine to millions of nursing home residents in facilities across the U.S., did not respond to requests for comment Wednesday but previously told the Tribune the allegations are without merit.

Nehls' attorneys, David Joel Chizewer and Matthew Organ of the Goldberg Kohn firm, declined to comment.

Her case was brought under the False Claims Act, which allows private citizens to sue companies and individuals that are defrauding the government and to recover money on the government's behalf. Nehls alleges that the Total Pharmacy deal violated Medicaid rules that require nursing home operators to choose their pharmacy based on the best interest of patients.

The trial has been set for Aug. 12 in the federal courthouse in Chicago.