A Medical Device Daily

Medical software firm Quovadx (Greenwood Village, Colorado) yesterday reported that it has reached an agreement to settle for $7.8 million the last of three legacy lawsuits that arose from the company’s 2004 restatement of historical financial results.

On Dec. 26, 2006, the company entered into a memorandum of understanding (MOU) with lead plaintiffs to settle claims brought in the class action originally titled Henderson v. Quovadx, Inc. et al., filed on May 17, 2004. The suit, subsequently consolidated under the caption Special Situations Fund III, L.P. et al. v. Quovadx, Inc., is pending in federal court in the District of Colorado.

Under the terms of the MOU, Quovadx will pay $7.8 million, by Jan. 15 into a settlement fund established by the lead plaintiffs’ counsel in exchange for a release with prejudice of all claims that were or could have been asserted by the plaintiffs against the company and the former individual defendants arising out of or relating to the acquisition of Quovadx common stock in connection with Quovadx’s December 2003 exchange offer for all outstanding shares of Rogue Wave Software.

The lead plaintiffs’ attorneys’ fees and expenses, in amounts approved by the Court, as well as the cost of administering the settlement, will be paid from the settlement fund. The agreement is subject to, among other things, approval by the Court.

“I am very pleased that these lawsuits are now resolved, allowing us to focus fully on moving the company forward and achieving our stated objectives for 2007,” said Harvey Wagner, president/CEO of Quovadx.

In April, the company settled two other lawsuits relating to the restatement for total payments of more than $10.6 million (Medical Device Daily, April 7, 2006).

The company previously accrued $3.3 million dollars in the first quarter of 2006, or approximately 8 cents per share, as a preliminary estimate of the settlement amount. Based on the MOU, the company said it expects to accrue an additional settlement expense of $4.5 million, or about 11 cents per share, in its fourth quarter 2006 results of operations.

Quovadx offers software and services for system development, extension, integration and analysis to enterprise customers worldwide. It has three divisions, including the Integration Solutions division, which offers private and public healthcare organizations software infrastructure to facilitate system interoperability and leverage existing technology; the CareScience division, which provides care management and analytical solutions to hospitals and health systems; and the Rogue Wave Software division, which provides enterprise-class software and services for high-performance application development. Quovadx serves companies in the healthcare, financial services, telecommunication and public sectors.