A class action lawsuit was filed in the United States District Court for the Northern District of Illinois on behalf of purchasers of Allscripts-Misys Healthcare Solutions, Inc. (formerly known as Allscripts Healthcare Solutions, Inc. (NYSE: MDRX) common stock during the period from May 8, 2007 to February 13, 2008 (the “Class Period”). The complaint charges Allscripts and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Allscripts develops and sells software applications to healthcare organizations. According to the Company, more than 150,000 physicians, 700 hospitals and nearly 7,000 post-acute and homecare organizations utilize Allscripts software applications. Allscripts products include electronic health records (“EHR”) systems, electronic prescribing, revenue cycle management, practice management, document management, medication services, hospital care management, emergency department information systems and homecare automation.
According to the complaint, during May 2007, the Company went “live” with the newest version of its EHR clinical software, Touchworks, version 11 (“V-11”). The complaint alleges that, during the Class Period, defendants issued materially false and misleading statements regarding the Company’s business prospects. The complaint further alleges that defendants misrepresented and/or failed to disclose the following adverse facts: (i) that Allscripts lacked the necessary resources to install V-11 software at customer sites; (ii) that Allscripts had no historical basis to estimate the completion of V-11 or the impact V-11 sales might have on the Company’s 2007 revenues and earnings; (iii) that the complexity of V-11 had materially and adversely lengthened the sales cycle and revenue recognition cycle for the Company’s V-11 sales contracts; (iv) that Allscripts was currently experiencing adverse and continuing delays in the installation of V-11 software systems; and (v) that based on the foregoing, defendants had no reasonable basis for their statements and opinions concerning Allscripts’ current and future financial performance and projections.
On February 13, 2008, Allscripts released its actual 2007 financial results, reporting 2007 revenue of $281.9 million or $18 million below the Company's $300 million guidance confirmed in August 2007 and $5 million short of their November earnings guidance revision. During a conference call with investors that same day, Allscripts finally admitted to V-11 installation delays that were likely to negatively impact sales and earnings well into 2008. In response to those announcements, the price of Allscripts common shares fell $4.12 per share, closing at $11.27 on February 14, 2008.
If you are a current shareholder or purchased shares during the class period of May 8, 2007 to February 13, 2008 and would like to discuss your options of exercising your rights as a shareholder, please contact us.
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