Dispute With Texas Hospital Settled

A lawsuit between Wismer Martin and one of its major customers has been settled out of court.

Company officials failed to disclose the suit in a June registration statement with the U.S. Securities and Exchange Commission, saying they didn’t regard it as a significant issue.

The dispute was “amicably resolved with no financial award to either party,” Ronald Holden, Wismer Martin’s chief executive officer, wrote in a letter to The Spokesman-Review dated July 28.

Documents provided by Holden indicate that officials of Cook Children’s Medical Center in Fort Worth, Texas, signed the settlement agreement on July 27.

“Cook … is currently a cash paying customer of Wismer Martin who utilizes our products and services on a daily basis,” Holden wrote. “I suggest to you that this information provides factual support that Wismer and its advisors have done a very thorough job of balancing the interests of public disclosure with the exigencies of running a business.”

On March 7, the hospital filed suit against Wismer Martin subsidiary Integrated Health Systems Inc., for failure to perform on its contract with the hospital to provide software services.

Had the case gone to trail, an attorney for the hospital said he would seek significant cash damages in the case. IHS’s contract with Cook limits any such damages to the value of the contract, which was in excess of $1 million.

The hospital charged that IHS had failed to properly install and support the software system it purchased.

The hospital also said it had to turn to third-party consultants to get the system working properly.

IHS responded by complaining that the use of third-party consultants violated the contract agreements.

In the settlement, Cook drops its suit and IHS drops its threat of reprisals for the use of consultants.

On June 12, Wismer Martin filed a registration statement with the SEC detailing an offering of 2 million shares of common stock. In such statements, companies are required to disclose any pending material legal proceedings. But the Cook lawsuit was not disclosed.

Doug Willford, Wismer’s chief financial officer, said in July that the company did not report the lawsuit, in part, because it did not believe there was “any significant exposure to the company in that lawsuit.”

Neither Willford nor Holden returned phone calls this week. Michael Murphey

, DataTimes