Three MedQuist directors quit in dispute with company

MedQuist Inc. of Mount Laurel today announced the resignation of three members of its board of directors in a disagreement over the process for studying a possible sale of the company.

N. John Simmons Jr., Richard H. Stowe and John H. Underwood left the board, effective today, because of differences with the company about the role of a committee of independent directors in evaluating whether a sale is in the best interests of MedQuist shareholders and any resulting sale process, the company said.

All three are independent directors - board members who are not also employees of the company.

MedQuist announced on Nov. 2 it was studying a sale after majority stockholder Royal Philips Electronics N.V. said it wanted to sell its 70 percent stake.

The company also said it had received a request from a shareholder to inspect certain of its books and records. MedQuist said it offered to make required information available.

MedQuist, a medical-transcription provider, is under investigation by the Securities and Exchange Commission over alleged improper billing. Also, the Department of Justice is looking at potential federal violations in connection with the provision of medical-transcription services, and the Department of Labor is probing administration of MedQuist's 401(k) employee retirement plan.

The company's shares were down 2 cents early this afternoon at $11.45 in over-the-counter pink-sheet trading.