Chicago-based EHR vendor Allscripts Healthcare Solutions, Inc. has settled litigation with New York City-based investment advisory firm HealthCor Management, L.P. ("HealthCor"), after the former agreed to nominate three independent directors to its Board of Directors. The directors, Stuart L. Bascomb, David D. Stevens and Randy Thurman will be announced at Allscripts’ 2012 Annual Meeting of Stockholders scheduled for June 15.
As a result, HealthCor will withdraw its claims against Allscripts, currently pending in the Court of Chancery for the State of Delaware and will vote for all of the Company's nominees at the 2012 annual meeting. HealthCor currently owns approximately 6.1 percent of the outstanding shares of Allscripts' common stock.
"We believe this is a positive outcome for Allscripts and its stockholders and we look forward to working collaboratively as we continue to implement our strategic initiatives and make the important and necessary investments to deliver a connected community of health for our clients and build value for all of our stockholders,” Glen Tullman, CEO of Allscripts, said in a statement.
In a previous letter to Tullman, Joseph P. Healey and Arthur B. Cohen, portfolio managers at HealthCor, said the “problem is clearly one of execution and a fundamental problem with leadership.” They originally called for Tullman to resign. With this agreement, Cohen says, they are “pleased to have reached this amicable resolution with Allscripts, which we believe will serve the best interests of all stockholders.”
Allscripts had a tumultuous few weeks starting in April, when along with unfavorable first quarter results, four board members, all from Eclipsys (a company which Allscripts acquired in 2010), left, including Chairmen of the Board Phil Peal. He was replaced by Dennis Chookaszian.
Bascomb is the current CEO and chairman of QualSight, Inc., start-up company in Chicago to create a nationwide network of ophthalmologists to market a managed care refractive surgery program. Stevens is involved as an investor/advisor in private equity, focusing on providing capital to lower-middle market growth companies in the healthcare services industry. Thurman currently serves as the senior advisor and operating partner at New Mountain Capital LLC, a private and public equity firm with assets in excess of $10 billion.
Along with the three new nominees, the company's nine-member slate for election at the 2012 annual meeting will consist of: Paul Black, Dennis Chookaszian, Robert Cindrich, Philip Green, Michael Kluger and Glen Tullman. Of the nine board members, eight are independent. Stockholders of record as of April 24, 2012 are entitled to vote at the Annual Meeting.