According to the Company’s FORM 10-Q For The Quarterly Period Ended March 31, 2004, on April 1, 2004, the District Court issued an order granting the Company’s motion and dismissing in its entirety the plaintiff’s Second Amended Complaint. In the order, the District Court granted the plaintiffs fifteen days to file a further amended complaint that conformed to applicable law as well as the District Court’s ruling. The deadline for the plaintiffs to file a further amended complaint expired on April 16, 2004. The plaintiffs did not file a further amended complaint prior to the District Court’s deadline. In addition, on May 10, 2004, the plaintiffs consented to dismissal of the lawsuit and, in doing, waived all rights to appeal the dismissal.

As summarized by the same SEC filing, from July through September 2002, the Company and three of its then current officers were named in seven complaints filed by purported shareholders of the Company in the United States District Court, Southern District of Florida, West Palm Beach Division, or the District Court. Each complaint sought certification as a class and monetary damages, and alleged that the Company and the named officers violated federal securities laws. On February 4, 2003, the District Court issued an order that consolidated all seven cases into one single case and appointed the City of Philadelphia Board of Pensions and Retirement, Louis Giannakokas and Norman K. Mielziner to serve as lead plaintiffs. On April 30, 2003, the plaintiffs filed with the District Court an amended, consolidated complaint, or the Amended Complaint. On July 31, 2003, the Company filed a motion to dismiss the Amended Complaint. On September 16, 2003, the plaintiffs filed opposition papers to the motion to dismiss, and the Company filed a reply brief on October 16, 2003. On November 4, 2003, the District Court granted the Company’s motion to dismiss the Amended Complaint in its entirety. In so doing, the District Court granted the plaintiffs fifteen days to file a further amended complaint that conformed to applicable law as well as the District Court’s ruling. The plaintiffs subsequently obtained an extension of that fifteen day deadline. On December 5, 2003, the plaintiffs filed with the District Court their second amended complaint, or the Second Amended Complaint. In it, among other things, the plaintiffs reduced the class period by a total of eight months and eliminated numerous allegations that had been contained in the Amended Complaint. On January 5, 2004, the Company filed a motion to dismiss the Second Amended Complaint. The plaintiffs filed opposition papers to the motion on February 20, 2004. On March 19, 2004, the Company filed a brief in further support of its motion.

The original complaint alleges that Eclipsys and its three chief officers violated the federal securities laws by issuing false and misleading statements during the Class Period. Contrary to their positive statements, defendants -- according to the complaint -- were in possession of materially adverse information which they failed to disclose. Specifically, during the Class Period, defendants trumpeted the large amount of new sales the Company was booking and the expansion of its sales force. In making these announcements, defendants knew or recklessly ignored that the Company was experiencing a decline in demand for its information technology and that it had failed to sufficiently increase its expenditures for research and development, costs necessary to correct operational problems at the platform-level of its technology. This fraudulent course of conduct allowed Eclipsys insiders, including the named defendants, to sell over 388,500 shares and pocket in excess of $9.69 million while privy to material adverse knowledge regarding the Company's true financial status.On June 28, 2002, the Company shocked the market by announcing that instead of the profit that the Company had previously told the market to expect, the Company would report a loss of $0.07-0.10 per share due to fewer contracts closing. The price of Eclipsys stock tumbled nearly 50% on the announcement.