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Newcastle files suit against Philips Electronics
By Lisa Kerner
Charlotte, N.C., June 30 - Newcastle Partners, LP, derivatively on behalf of MedQuist Inc., filed an action against Royal Philips Electronics NV in the Superior Court of New Jersey, Chancery Division, Burlington County.
Additional defendants include CBaySystems Holdings Ltd., Cbay Inc., former MedQuist director Stephen H. Rusckowski and current MedQuist directors Clement Revetti Jr., Greg Sebasky Jr., Scott M. Weisenhoff and Edward H. Siegel, according to a schedule 13D filing with the Securities and Exchange Commission.
Newcastle said that each director defendant has been a senior officer of one or more Philips affiliates while serving as a member of MedQuist's board.
The suit alleges that the directors authorized MedQuist, solely to benefit Philips:
• To release CBay from a negotiated standstill obligation for no consideration to MedQuist; and
• To expend significant resources in connection with the Philips-CBay Transaction.
Newcastle is seeking an order enjoining the sale of Philips' stock of MedQuist to CBay and enjoining the directors from taking certain further actions solely to facilitate the Philips-CBay transaction.
The complaint also seeks a declaratory judgment that Philips and MedQuist's existing governance agreement remains in full force and effect, notwithstanding any consummation of the Philips-CBay transaction.
And lastly, the complaint alleges that CBay breached the standstill obligation of a confidentiality agreement entered into between MedQuist and CBay and seeks to enjoin CBay from violating that agreement.
MedQuist is a medical transcription technology and services company based in Mt. Laurel, N.J.
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