Not long ago, Allscripts management went through a dramatic shakeup, with the firing of one board member, the loss of three others and the departure of the company’s CFO. (It’s rumored that Allscripts’ chief marketing officer is headed for the door soon, as well.)
The Street didn’t react well to these boardroom shenanigans. The company’s stock plunged 40 percent in the wake of these changes, and the stock’s reputation was trashed, with several ratings falling from “buy” to “neutral.”
CEO Glen Tullman survived that round of bloodshed, but it seems he’s still at risk for losing his job. Healthcor Management, LP, which owns 5.5 percent of Allscripts shares, has filed a suit against the company which demands that Tullman resign.
Healthcor has filed a lawsuit against Allscripts, ostensibly over its process for selecting board members, designed to give it more control of the company. Among other things, it demands that Tullman be removed as CEO.
Healthcor is alleging that Tullman has failed to execute well as CEO, leading to poor financial performance of late. It’s also challenging Tullman’s $7.2 million compensation in 2011, arguing that he made more money than CEOs of comparable companies that
What’s more, the chairman and key board members have left the company were the last ones who could oversee Eclypsis products that came on board when Allscripts acquired it. Definitely not cool. I have to say that if these were the last Eclypsis leaders on the board, I would have busted my tail to try and keep them, not dumped the chairman just like that.
On top of all that, Healthcor isn’t fond of the new director picks, including former Cerner COO Paul Black and Robert Cindrith, formerly chief legal office and senior vice president at the University of Pittsburgh Medical Center. Healthcor is demanding that it have the right to submit its own candidates.
It’s worth noting, however, that Healthcor doesn’t seem to be in a rush to dump its stock. Why? Because before it filed suit, Healthcor asked Allscripts to consider any and all moves which might make everyone involved whole, including a sales of the business. Interesting stuff, if your head isn’t on the block.
Bottom line, my guess is that Tullman will be able to stay in place if he does something dramatic to fix things and reassure investors that they’ll get their profits. Whether that will involve a sale is yet to be seen.