According to the law firm press release, the action charges Allscripts and certain of its officers with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. The Complaint alleges that, throughout the Class Period, the Company, which was formed from the merger of Allscripts-Misys Healthcare Solutions, Inc. and Eclypsis Corporation ("Eclypsis") in August 2010 (the "Merger"), misrepresented its progress in integrating Allscripts' and Eclypsis' disparate systems and the Company's ability to translate its fragmented product lines into revenues.
Allscripts is a provider of healthcare-related information technology services, including systems that manage electronic health records, financial and administrative performance, revenue cycle, and care and discharge operations. The Complaint alleges that Allscripts concealed that: (a) the process of developing a unified product offering after the Merger had suffered debilitating setbacks, including major undisclosed schisms among the most senior levels of the Company, which ultimately resulted in the loss of key personnel and harmful upheaval in Company leadership; (b) a material portion of Allscripts' revenue and net income was predicated on the successful integration of these systems, and substantial business relationships had been destroyed by the Company's inability to make material progress in this area; and (c) as a result of the foregoing, Allscripts lacked a reasonable basis for its claims of progress in post-Merger integration, sound operations, profitable results, and continued growth.
The truth about Allscripts' condition was revealed on April 26, 2012, following the close of the markets, when the Company announced its operating results for the first quarter of 2012. Allscripts shocked the market by reporting earnings sharply below guidance and expectations, as well as: (a) the termination of the Chairman of its Board of Directors; (b) the resignation of three Company directors; and (c) the resignation the Company's Chief Financial Officer. In reaction to these revelations, Allscripts' stock price fell $5.72 per share, or 35.7 percent, to close at $10.30 per share on April 27, 2012, on extraordinary trading volume.
On November 9, 2012, the Court issued an Order appointing lead plaintiffs and approving the selection of lead counsel. The lead plaintiffs filed their amended complaint on January 10, 2013.
On May 15, 2013, the plaintiffs filed an amended complaint.
On April 1, 2015, the parties entered into a Settlement Agreement. This Settlement was preliminarily approved on April 9. The Settlement was granted final approval and this case was dismissed on July 22.