Dissidents Seek Quality Systems Board Seats

A dissident shareholder group with a 10% stake in Quality Systems Inc. will seek representation on the Tustin company’s board of directors, according to regulatory documents.

Lawndale Capital Management will nominate candidates to replace at least some of Quality Systems’ directors, according to a report filed Tuesday with the Securities and Exchange Commission.

Andrew Shapiro, the president of Lawndale, has not decided on any particular candidates, according to a letter included in the SEC filing. The letter, to Quality Systems Chairman Sheldon Razin, follows a proposal by Lawndale to ensure the independence of the company’s board.

“We have now concluded that corporate governance problems permeating Quality Systems cannot be remedied with just structural change,” Shapiro said in the letter. The company, Shapiro said, needs directors “with greater corporate governance and/or industry expertise,” as well as independence from Razin.

Quality Systems develops and provides management software for medical and dental group practices.

Company shares, down more than 43% during the past year, closed Wednesday at $4.50, up 31 cents.