A legal dispute has broken out between the former chairman of retirement home specialist McCarthy & Stone and the company.

John McCarthy, who founded the firm in 1963 and left in acrimonious circumstances in January last year after he failed in a management buyout bid, has started legal proceedings over share options worth £190,000. He issued a writ through his lawyers last week.

His complaint is that the board at McCarthy & Stone has refused to allow him to exercise almost 25% of an £800,000 share option.

Keith Lovelock, chief executive, said: “The discretion used by the remuneration committee was obviously an issue entirely for them, which consists of all the non-executive directors at McCarthy & Stone.

“I am not a non-executive of the company, nor a member of the remuneration committee.

Non-executive directors are employed to comply with corporate governance rules and to protect the interests of shareholders.”

Lovelock said he wanted to make clear that his “comments are not personal”.

He said that the company would be consulting its lawyers. He added that he had not spoken to McCarthy for 18 months.

Lovelock is to be replaced as chief executive by Howard Phillips in September but will remain as chairman.

McCarthy made around £74m when he sold 13.5m of shares in the company last year.