Indaba Capital Issues Letter to Tabula Rasa's Independent Directors Regarding the Urgent Need for Management Changes and a Board Refresh
Indaba Capital Management L.P. (together with its affiliates, "Indaba" or "we"), which is the largest shareholder of Tabula Rasa HealthCare Inc. (NASDAQ: TRHC) ("Tabula Rasa" or the "Company") with an ownership interest of approximately 19.99% of the Company's outstanding shares, today issued an open letter to the independent members of the Company's Board of Directors (the "Board"): Samira K. Beckwith, Jan Berger, MD, MJ, Dennis K. Helling, PharmD, ScD, Kathy O'Brien, Michael Purcell, Rear Admiral Pamela Schweitzer, PharmD (retired) and A. Gordon Tunstall.
As you know, Indaba is Tabula Rasa's largest shareholder and holds nearly five times the number of shares owned by the current Board. We feel our sizable ownership interest and strong alignment with fellow shareholders position us to help you fix the Company's abysmal corporate governance, dysfunctional boardroom and sustained underperformance. This is why we sought to collaborate with you following the 2022 Annual Meeting of Shareholders, whereat there were resounding "withhold" votes for Chief Executive Officer and Chairman Dr. Calvin H. Knowlton, President and Director Dr. Orsula V. Knowlton and Lead Independent Director A. Gordon Tunstall.1 Unfortunately, our private interactions with you over the past several weeks indicate the Board is far more focused on protecting the Knowltons and Mr. Tunstall than facilitating long-overdue governance improvements sought by shareholders.
Your apparent deference to conflicted insiders and unwillingness to engage in good faith have now forced us to go public with our demands for a management change and meaningful director refreshment. In addition to keeping in place an ineffective husband-and-wife management team, you have tolerated a so-called Lead Independent Director with lengthy ties to the Knowltons. The fact that Mr. Tunstall was a long-serving director of the Knowltons' former business, excelleRx, Inc., should disqualify him from such a role altogether. Fundamentally, we view it as a dereliction of duty for independent directors to overlook such interlocks and enable one of the Knowltons' long-time associates, Mr. Tunstall, to lead them. It is equally alarming that you recently empowered the Knowltons and Mr. Tunstall to drive interactions with us that were intended to rid the Company of conflicts of interest and potential self-dealing.
We seriously question how you - as independent directors, with fiduciary obligations to all shareholders - can uphold the status quo after what has transpired in recent years:
In light of these issues, we are once again calling on you - the Company's independent directors - to take actions that are in shareholders' best interests. These include:
Each of you has a duty to act in the best interests of shareholders - not conflicted insiders - and to act with urgency as the Company remains in a free fall. We believe Tabula Rasa has great potential to produce significantly better results and enhanced value for shareholders if it has the benefit of proper governance and oversight. We expect to promptly hear from a Company representative other than the Knowltons or Mr. Tunstall about resuming a productive dialogue that advances the aforementioned initiatives. If not, we intend to take any actions that we deem appropriate and necessary to hold the Board members accountable and protect shareholders' interests.
About Indaba Capital
Indaba was founded in 2010 to invest in corporate equity and debt. Based in San Francisco, Indaba manages approximately $1.5 billion in assets. Learn more at www.IndabaCapital.com.
1 These results did not even include votes from Indaba, which now has a nearly 20% ownership position.
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