Good news came from electronic health record giant Allscripts Healthcare Solutions on Friday. The company has agreed to the nomination of three new board members in order to resolve a lawsuit between the EHR provider and HealthCor Management, a serious investor in the company.
According to the Dow Jones, HealthCor, owner of 6.1% of Allscripts shares, has now positioned itself to influence leadership and strategic decision-making and maybe a potential sale. Just recently, HealthCor obtained from the Delaware Court of Chancery an expedited review of its lawsuit, which followed the ouster of former Allscripts Chairman Philip Pead and three other board members back in April, “a material and dramatic change to the balance of governance at Allscripts.” The lawsuit filed on May 21 was to be reviewed on June 14. Based on the decision to appoint new board members, HealthCor has dropped its suit.
Last Friday, Allscripts and HealthCor announced the nomination of three candidates for the former’s Board of Directors to be voted on during the 2012 Annual Meeting of Stockholders on June 15. The nominees are Stuart L. Bascomb, David D. Stevens, and Randy Thurman. Despite its earlier protest, HealthCor has indicated that it now supports Allscripts CEO Glen Tullman whom it originally wanted ousted following the shake-up at the end of April.
In its proposed configuration, three of the nine members of the board will have been chosen by HealthCor. In addition to the new nominees, the slate of nominees will include Paul Black, Dennis Chookaszian, Robert Cindrich, Philip Green, Michael Kluger and Glen Tullman. Of the nine board members, eight are independent.
Originally, Allscripts opposed any changes to the Board of Directors, citing that the time for such moves had expired. According to a spokeswoman, the company created and maintains a “poisin pill plan” to safeguard against future attempts at taking over the company.
Allscripts stock has gained slightly this morning, up +0.13 (+1.24%) to $10.58. However, their value is still off by an estimated 45% over last year.
Pead and the departing members of the board all belonged to Eclipsys, an IT company acquired by Allscripts in 2010, where Pead served as the CEO. At the time of the ouster, Tullman stated that the departures were related to differing views for the future following the acquisition.
The company is a major player in EHR systems in American hospitals and ambulatory settings. Tullman pointed to high costs in research and development into better integrated systems as well as unexpectedly poor sales as the causes behind missing their financial targets.
Are we about to see the rebound of one of the nation’s leaders in EHR systems? Or are we seeing the company’s directors prepare for a potential offloading?
Stay tuned for more.