Former iSoft chief executive, Gary Cohen’s attempts to delay the medical software group’s sale to CSC have been dismissed by the NSW Supreme Court as without foundation, enabling the sale to go ahead.
iSoft stakeholders Ocean Capital (ASX:OCP) announced in an ASX statement this week that the case brought against it by Cohen’s family company RJL Investments was dismissed on Friday 20 May.
Cohen, who led the company for a decade until resigning in the face of drastically falling revenues last year, had filed for litigation against Ocean Capital last month.
At the time, the company claimed Ocean Capital was required to give four weeks’ notice to Cohen before it could sell 15 per cent of its 24 per cent stake in the company as part of a pre-emption deed acquired by Cohen during negotiations in 2007.
However, the NSW Supreme Court found CSC’s proposed acquisition, reportedly worth $180 million, did not fall under the provisions of Cohen’s ability to pre-empt the sale. Ocean Capital reaffirmed in the ASX statement that it was open to bids superior to CSC’s current standing offer of 17c per share.
“We remain free to deal with our shares in iSoft at any time,” the company stated.
It is unknown whether RJL Investments will appeal the decision.
The sale would provide CSC with 3300 iSoft employees and access to the 13,000 healthcare providers in 40 countries currently using the company’s e-health products, when the deal is finalised by the end of CSC’s second quarter in September this year.
iSoft will be delisted from the ASX as part of the deal, though CSC is yet to confirm whether it will retain the brand or assimilate contracts and products under the wider CSC umbrella.
CSC has committed to continuing internal transition programs outlined by iSoft over the past few years to eliminate cash burn, but is yet to confirm whether any further reductions in headcount will be made among iSoft staff. The provider had already flagged plans to lay off 800 staff or 17 per cent of its original workforce of 4500.
Cohen resigned in September last year following $383 million statutory loss in the 2009-2010 fiscal period. He was replaced at the time by chief operating officer, Andrea Fiumicelli.
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