Unresolved plot lines at Integral…

December 17, 2007

soap-opera.jpgSometimes I think Soap Opera Digest should cover public companies. Case in point: Integral Systems Inc. (ISYS). Integral had a good year, thanks in part to contracts with the Air Force, but it’s still playing out the later episodes of a long-running drama with several sordid plot lines.

Integral’s 10-K (filed last week) reports that in November the firm paid $110K to settle a previously disclosed lawsuit brought by former EVP and Managing Director of Operations Gary A. Prince, who was ousted at the end of March amidst a formal SEC investigation of his role at the company. This didn’t stop him from suing for unpaid wages, a claim he ratcheted up with treble damages, and the company has now handed over a portion of what he wanted.

The still-ongoing SEC investigation asks whether Prince (who had an on-and-off relationship with Integral dating back to its formation in 1982) acted as a “de facto executive officer” before he was hastily given a title in August 2006, and also whether he’d had a hand in Integral’s financial reporting even though the SEC permanently barred him, 10 years ago, from doing that kind of work. (The company’s last proxy, filed shortly before Prince’s departure, casually mentioned that he spent 2 months in Federal prison back in 1998.) Apparently, he routinely attended board meetings during the reign of former Chairman/CEO Steven Chamberlain, who resigned in April 2006 after a felony indictment for sexual misconduct involving a minor. (Chamberlain later pleaded guilty to a misdemeanor in exchange for probation and counseling).

Other regulars on As Integral’s World Turns include Chamberlain’s hand-picked successor to the CEO post, Pete Gaffney, who lasted a year before resigning the top job and his board seat to take a lesser position as EVP for New Business and Technology Development. And the CFO who served under Chamberlain, Elaine Brown, now has a different job as well (Secretary and EVP of Administration). Thankfully, this fall Integral hired a new CFO, William Bambarger, Jr., who appears to have no previous role in the saga. But who knows, maybe he’ll turn out to be someone’s long-lost illegitimate son.

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