The third-largest shareholder of Tustin-based Quality Systems Inc. will seek to install a majority of independent directors on the company's board in an effort to bring about substantial changes, according to regulatory documents filed Thursday.
San Francisco-based Lawndale Capital Management LLC, which controls nearly 10% of the company's stock, has long been critical of Quality Systems, which develops and markets proprietary health care information systems for medical and dental group practices.
"We believe the company and its assets are grossly undervalued by the marketplace," said Andrew Shapiro, manager of Lawndale Capital.
"Our filings and its exhibits illustrate particular circumstances that have occurred at this company at the hands of management that has been held unaccountable by a sleeping board of directors that has turned off Wall Street to the company's market valuation," he said.
Lawndale, which has owned shares in the company intermittently since 1994, may also call for a special meeting of shareholders to consider changes in the board's composition as well as new rules on electing members and on how they communicate with each other.