One of the largest shareholders at Allscripts Healthcare Solutions Inc. has sued the company in the hopes that he can begin a proxy fight following the CEOs refusal to resign.
HealthCor Management LP filed the lawsuit in Delaware’s Court of Chancery, asking that the comapny strike a bylaw that requires board member nominees to be proposed by January. HealthCore Management owns 5% of Allscripts outstanding shares.
Allscripts recently lost 40 percent of its value following the resignation of three directors on its nine-member board and the resignation of its chief financial officer. CEO Glen Tullman however refused to quit after HealthCor demanded his resignation.
In its lawsuit Healthcor claims that the “purged” board removed the leadership team that arrived at Allscripts during its merger with Eclipsys.
The complaint states:
“These now departed directors were those most able to protect critical product lines which Eclipsys brought to Allscripts from the continuing failures of execution by Tullman.”
A main contention in the lawsuit is that the Allscript board proposed its own nominees to fill two board positions but did not allow shareholders to announce their own nominations during the company’s annual meeting.
In the lawsuit HealthCor has also asked that the company’s June 15 annual meeting be delayed so they can propose three nominees of their own choosing.
This isn’t the first lawsuit to be filed regarding an RX company’s bylaws, last month investor Carl Icahn sued Amylin Pharmaceuticals over similar bylaws that attempted to prevent the company from being sold, that lawsuit was fast tracked and eventually led Icahn and Amylin’s CEO to enter talks after the lawsuit was dropped.