A council is to pay money to a housing support company for the disabled after it led an "unreasonable campaign" against the firm.
The Local Government Ombudsman found three examples of maladministration and injustice in Coventry City Council's dealings with Open Doors in 2015.
Undisclosed payments to the firm and its director John Kavanagh settles its High Court action against the council.
The authority has apologised but said it has not admitted liability.
"The sums paid to Open Doors and Mr Kavanagh are a small fraction of the sums they claimed, and settlement is on terms that some of the legal costs of the council have to be paid by Open Doors," the authority said.
"When deciding to settle, the council was keen to end the drain on management time and resources caused by this litigation.
"Where the ombudsman recommended that Coventry gave apologies, it did so promptly and fully, and this happened some years ago."
The ombudsman ruled the council abused its safeguarding powers to carry out what Mr Kavanagh has called a "witch-hunt".
The firm had an "excellent relationship" with the council until 2006 when there was a change of management in social services, Mr Kavanagh has said.
Things changed when the company sought to raise perceived examples of poor practice with the authority, he said.