Is there a decline in value and resignation associated with Dr. Orsula V. Knowlton? (Update 2024)

Dr. Orsula V. Knowlton claims to be a pioneering healthcare entrepreneur with more than 20 years’ worth of expertise. Additionally, Dr. Orsula V. Knowlton claims that she is always looking for ways to help people, especially if doing so will enable them to pursue their entrepreneurial aspirations. 

Dr. Orsula V. Knowlton had to complete her schooling before she could begin her business ventures. Dr. Orsula V. Knowlton claims that she got her start with a pharmacy bachelor’s degree from the University of Sciences’ Philadelphia College of Pharmacy and Science in Philadelphia, Pennsylvania, which was recently partnered with St. Joseph’s University in Philadelphia, Louisiana.

Dr. Orsula V. Knowlton helped co-found Tabula Rasa Healthcare, Inc. in 2009. Tabula Rasa Healthcare was created to offer pharmacy, safety, and risk mitigation solutions for medications. In other words, Business at Temple University. Dr. Orsula Knowlton now holds active pharmacy licenses in Virginia, Pennsylvania, and New Jersey. The company has always aimed to improve the safety, accessibility, and efficacy of pharmaceutical regimens. Up until recently (2022), Dr. Orsula V. Knowlton was actively involved in her business.

Dr. Orsula V. Knowlton claims that she served in a number of capacities for the business up until that point, including president, chief marketing, new business development, chief diversity and inclusion, and president of the board of directors.  Dr. Orsula V. Knowlton served as Chief Compliance Officer for the company’s three pharmacies early on, in New Jersey, Colorado, and San Francisco.

Dr. Orsula V. Knowlton- Under pressure, the husband and wife bosses of a Moorestown pharmaceutical technology company resign.

Calvin and Orsula Knowlton of Tabula Rasa have been fired from their Moorestown health technology company after it went public and saw a significant decline in value.

The couple who made Moorestown pharmaceutical tech developer Tabula Rasa HealthCare Inc. a Wall Street darling before attempting to maintain control when its stock price fell and shareholders revolted has agreed to resign after their board reached an agreement with their top opponent—the company’s largest shareholder.

Calvin H. Knowlton, 72, the chief executive and chairman of Tabula Rasa, and his wife Dr. Orsula V. Knowlton, 54, the chief president and chief marketing officer, will “retire” from the business, according to the company’s announcement on Wednesday. Tabula Rasa counsels medical professionals on potential interactions between prescribed medications and suggests various combinations to better serve patients.

Dr. Orsula V. Knowlton

The company’s chief financial officer and president, Brian Adams, has been appointed as acting CEO. The new board chairman is Michael Purcell, a seasoned corporate auditor who joined the board in 2018.

Dr. Orsula V. Knowlton will receive their base salary, which amounts to $1.1 million annually for 18 more months, along with health care benefits and assistance with finding employment, as well as stock that is presently worth $2 million for Calvin Knowlton and $1.4 million for Dr. Orsula V. Knowlton.

Prior to a sharp decline in the share price and margin calls by banks that secured loans against Calvin Knowlton’s stock before it lost value, Knowlton had previously owned roughly 3% of the company, but their ownership had decreased.

The board has handed the firm over to California-based Indaba Capital Management L.P., which holds roughly 25% of Tabula Rasa shares and largely bought it as the share price fell over the previous year. The Knowltons are on their way out of the company.

Before losing more than 90% of its highest value due to rising costs from a spate of unproductive acquisitions and deteriorating sales and profit prospects, the stock briefly reached $80 at its 2018 high. In trading on Wednesday, the stock increased by roughly 7.7% and ended at $4.90 a share

Indaba creator Derek Schrier and a supporter, Jonathan D. Schwartz, have also joined the board in place of Knowlton, according to Tabula Rasa. The board has also agreed that A. Gordon Tunstall, the former lead director whom Schrier had claimed deferred too much to Knowlton rather than looking out for other shareholders, will step down as soon as Indaba selects a replacement.

A retired Deloitte & Touche audit partner who joined the board in 2018 named Purcell stated in a statement that “The Knowltons have helped establish a strong foundation for the company” and built a strong management team that can increase sales.

While more health plans and providers of care to “at-risk” patients use Tabula Rasa’s pharmacy, drug risk management, and business services, interim CEO Adams predicted “continued growth,” better revenues, profitability, and share prices.

In succinct statements, the Knowlton defended their track record: Dr. Orsula V. Knowlton bragged about having “strong momentum,” and Dr. Orsula V. Knowlton expressed gratitude to have been able to assist patients and clients.

The board has also approved governance reforms and established a three-person strategic review committee, led by investor Schrier, to continue selling “noncore” businesses acquired by Dr. Orsula V. Knowlton and to “explore other value creation opportunities” — a term used in investment banking that frequently refers to considering a potential sale of the company.

Schrier referred to the arrangement as “a constructive agreement” and said it would “start a new chapter” in the history of Tabula Rasa. He said that the modifications would benefit investors, patients, and clients.

Schrier claimed that Dr. Orsula V. Knowlton had devolved into “an ineffective husband-and-wife management team” whose tenure had recently been marked by “sustained underperformance” and “abysmal corporate governance” under a board that stood up for Dr. Orsula V. Knowlton rather than all shareholders in a letter to board members earlier this year.

Dr. Orsula V. Knowlton- Deep ties to Philadelphia for the Knowltons

The duo is an integral part of the Philadelphia pharmaceutical scene. When Orsula Voltis Thomas was pursuing her Ph.D. there in the early 1990s, Calvin Knowlton served as the department head at the city’s historic pharmacy school, the University of the Sciences (now a part of St. Joseph’s University). In 1996, she started working for excelleRx, his former drug management business with headquarters in Philadelphia. They later got married and had a big family with kids from previous marriages.

When Knowlton sold his excelleRx business to Omnicare Inc. in 2005 for $270 million, the couple launched Tabula Rasa, which is Latin for “blank slate,” the following year.

With the support of investors, such as Rittenhouse Ventures of Philadelphia, they took the business public in 2016 through a $52 million initial public stock offering. The stock increased during the following two years, giving the business a worth of more than $1.5 billion. Sales surpassed $300 million last year after a series of smaller companies were acquired by them. But by that point, the stock price had already declined as a result of the company’s inability to turn new clients and sales into profits.

The Knowltons are finishing up a 44,000-square-foot mansion on nine acres near the borders of Moorestown and Cinnaminson Townships. Schrier used this home as a metaphor for how the Knowltons were spending millions they received from the loss-making company on improving their lifestyle while shareholders lost money as the stock fell during his campaign for their removal.

Dr. Orsula V. Knowlton- ‘The writing was on the wall’

Only a small percentage of shareholders supported Knowlton and their friend Tunstall in a board election in June even though they were all unchallenged. Shareholders also rejected the Knowltons’ compensation plan by a 3-to-1 margin in June. He received $6 million in cash and stock last year; she received $3.8 million.

After the board decided to give Knowlton more stock instead of responding to shareholder complaints and enacted a “poison pill” plan meant to make a hostile acquisition more challenging, Schirer increased the pressure on Tabula Rasa.

“The dissidents won,” said Charles Elson, a Newark, Del., corporate governance consultant. “The shareholders made their point, the board came around to it. The writing was on the wall, and now you’re seeing their exit.”

Dr. Orsula V. Knowlton- SEC- Factual Background of the case

• In accordance with the Company’s publicly available filings, its insider trading policy forbids all officers, non-employee directors, employees, advisory board members, agents, and consultants from “engaging in any pledging transactions, except in unusual circumstances and depending on approval by the Board or the Compensation Committee (emphasis added).” Additionally, according to the Company’s filings, “such approval typically will depend upon the TRHC team member’s clearly demonstrated financial capacity to repay the loan without resorting to the pledged securities.”
• This suggests that even in the “unusual circumstance” when pledging has been authorized, it is expected that such shares should not actually be sold in the event of a margin call.

• Proxy Statement on Schedule 14A for Tabula Rasa HealthCare, Inc., filed with the Securities and Exchange Commission of the United States (the “SEC”) on April 28, 2022, on page 58. Drs. Calvin and Orsula Knowlton are also parties to a Change-in-Control and Severance Agreement with the Company, which states that the executive party to the agreement agrees to be subject to any compensation clawback, recoupment, and anti-hedging and pledging policies that may be applicable to an employee of the Company. Anti-pledging is a crucial policy that applies to management, thus it is obvious that any deviations from it must be thoroughly considered and approved by the Board.
• Given the aforementioned, we find it astonishing that the Board appears to have authorized the Knowltons’ choice to pledge a total of 1,482,3693 shares of Common Stock (which represents the great majority of their total beneficial ownership). We are even more appalled by the fact that many of the Knowltons’ pledged shares were actually sold, as is detailed below.
• Because the Board does not appear to be able to provide enough control over management, the Company’s public filings indicate an alarming timeline of pledging activities by the Knowltons. This raises severe concerns about the independence of directors.
• Drs. Calvin Knowlton and Orsula Knowlton each signed a separate Restricted and Control Stock Certification and Agreement with Bank of America Merrill Lynch on October 4, 2021, as stated in the 2022 Proxy Statement. In accordance with the BoA Pledge Agreement, Dr. Calvin Knowlton committed a total of 439,013 shares of Common Stock, and Dr. Orsula Knowlton pledged a total of 384,042 shares of Common Stock, for a combined 823,055 shares of Common Stock. The common stock of the company closed at $23.61 on October 4, 2021.
• The Third Amended and Restated Pledge Agreement between Drs. Calvin and Orsula Knowlton and the Liberty Bell Bank, dated November 11, 2021, were also made public for the first time in the 2022 Proxy Statement. Under this Third Pledge Agreement4, Drs. Knowlton pledged a total of 659,314, or almost 74% of the remaining shares of Common Stock they beneficially possess.
• The Second Amended and Restated Pledge Agreement, the First Amended and Restated Pledge Agreement, and the Original Pledge Agreement (the “Amended Pledge Agreements”) are all evidence that Knowlton had already signed the Third Pledge Agreement. There were no earlier filings that disclosed these Amended Pledge Agreements, according to Indaba.
• The BoA Pledge Agreements and the Amended Pledge Agreements demonstrate that the Board approved the pledging of securities by the Knowltons in at least six different instances where the Board determined that there existed “unusual circumstances” justifying a departure from the Company’s insider trading policy and what is generally regarded as a fundamental corporate governance policy.
• Stockholders have suffered greatly as a result of these pledges. As previously mentioned, the BoA Pledge Agreements were signed on October 4, 2021, which was four days after the end of a dismal third quarter.
• The company released its results report and changed its full-year projection just one month later, on November 4, 2021, information the Knowltons should have known at the time they signed the BoA Pledge Agreements.
• The closing price of the Company’s stock plunged from a closing price of $29.76 on November 4, 2021, to $14.20 on November 5, 2021, as a result of the Company’s downward adjustments. Unsurprisingly, this sharp decline in the stock’s value triggered a margin call under the BoA Pledge Agreements, forcing the sale of a total of 823,055 shares of common stock between November 8 and November 17, 2021.6 The Knowlton did not use alternate means to satisfy the margin call and enabled the forced sale to take place.
• Fortunately for Knowlton, their shares were sold for values ranging from $12.63 to $14.15 as a result of their pledging arrangement and the ensuing forced sales. Unfortunately for owners, it’s possible that the Knowltons’ sales caused the company’s share price to drop even more sharply and reach a low of $2.09 in May 2022.
• Surprisingly, it appears that the Board did not find the compelled sales required by the BoA Pledge Agreements to be problematic enough to cause it to rethink its willingness to permit the Knowltons to pledge securities once more. The Knowltons signed into the Third Pledge Agreement on November 11, 2021, which the Board appears to have approved, in the midst of these forced transactions.
• The Board has acted in other ways that raise doubts about its independence in addition to appearing to approve the share pledges. One such instance is the choice of Mr. Tunstall, who has major, possibly incapacitating conflicts, as the Board’s senior independent director.
• As Mr. Tunstall appears to have worked for a former firm controlled by the Knowltons, Excellent, Inc., and one of his companies has previously engaged in related-party transactions with the firm, there is no doubt that Mr. Tunstall is a long-standing associate of the Knowltons. Such extensive connections should prohibit him from being considered an independent director and most definitely from acting as the Board’s lead independent director.
• In a similar vein, we believe that the Company offers Hope Healthcare Services certain PACE solutions services as well as pharmacy services for the fulfillment of prescriptions. President and CEO of Hope Healthcare Services and a member of the board is Dr. Samira Beckwith.
• In the company’s consolidated statements of operations for FY 2021, Hope Healthcare Services’ sales totaled about $6,605,000. We find it difficult to see how Dr. Beckwith can act independently enough to hold management responsible in our capacity as a company client. We consider the Knowltons’ customer relationship to be extremely problematic and believe that it may compromise her independence in reviewing and approving the pledge agreements because management is likely the party who determines the terms of their contract with Hope Healthcare Services.
• In addition to the Knowltons’ alarming pledging activities, the Company’s public filings also reveal a troubling pattern of the Company issuing aggressive earning projections, which are then ultimately downwardly revised, but not before Mr. Tunstall is able to effect sales of Common Stock in the open market. 
• Mr. Tunstall has sold almost $2.5 million worth of common stock since March 2019 but has only bought roughly $55,000 worth. Furthermore, it seems that a few of these sales were not conducted in accordance with a 10b5-1 trading plan. We would anticipate that Mr. Tunstall, a member of the Board’s Audit Committee since the Company’s initial public offering in 2016, would have a particularly thorough understanding of the Company’s finances and be actively involved in the Company’s public communications regarding its financial position and future expectations.
• In light of this, as shown by the timeline below, we regard the timing of his sales in relation to the Company’s release of guidance to be particularly problematic.

Resource- https://www.sec.gov/Archives/edgar/data/1524362/000092189522002290/ex991to13da210123014_072722.htm

Dr. Orsula V. Knowlton- SEC

The U.S. Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929. The primary purpose of the SEC is to enforce the law against market manipulation.

In addition to the Securities Exchange Act of 1934, which created it, the SEC enforces the Securities Act of 1933, the Trust Indenture Act of 1939, the Investment Company Act of 1940, the Investment Advisers Act of 1940, the Sarbanes–Oxley Act of 2002, and other statutes. The SEC was created by Section 4 of the Securities Exchange Act of 1934.

• The Securities and Exchange Commission (SEC) is a U.S. government oversight agency responsible for regulating the securities markets and protecting investors.
• The SEC was established by the passage of the U.S. Securities Act of 1933 and the Securities and Exchange Act of 1934, largely in response to the stock market crash of 1929 that led to the Great Depression.
• The SEC can itself bring civil actions against lawbreakers and also works with the Justice Department on criminal cases.

Wrap-Up- How to terminate an employee due to underperformance

• Write down everything

Documentation key. If you don’t write something down, it can be argued that it didn’t happen. Even informal conversations written in a notebook can be helpful and count toward documentation. I know what you’re thinking – documentation takes time. Time you don’t have. Nonetheless, it can be your friend should you have to defend your decision down the road.

Here are some examples of important documentation to collect:

• Electronic communications
• Phone conversations
• One-on-one chats
• Unprofessional or subpar behavior in group settings
• Feedback and complaints from coworkers, managers, or clients

• Clearly communicate expectations

For every job, you should have a job description. Even if you don’t have anything formalized, you should have a solid understanding of the functions and responsibilities of each role on your team. You should also know what it takes for employees to be successful in each role. And it’s essential that your employees know this, too.

Don’t assume. People come with their own perspectives that don’t always match what their boss has in mind. To avoid confusion, each role should be clearly defined. This makes it easier to pinpoint and correct problems.

Similarly, your progressive discipline policy should already be established and recorded, outlining how corrective action and termination would take place should you need to go there. This helps ensure every issue is handled consistently and fairly.

• Be a good coach

Both new and existing employees should be coached. This is informal feedback and consists of what’s right, as well as what’s wrong. Think of a football coach. He gives praise for a good pass or a solid tackle but also points out the missed catches and holes in the defense. Your employees need this feedback to understand how they are doing well before you get to the point of considering disciplinary action or termination.

• Initiate a performance improvement plan (PIP)

So, let’s say you’ve provided ongoing coaching, but you’re not seeing improvement, or you see some major concerns with performance that the coaching has not improved. This would be a good time to develop a performance improvement plan (PIP).

The PIP should articulate specifically what the problem areas are and give detailed goals for what the employee must do to correct it.  PIPs aren’t typically for behavior issues or policy violations, but rather to bridge a skills gap or point out where development is necessary.

Conduct verbal counseling

• In situations where a policy is being violated, verbal counseling might be the better way to go. Use this option to address things like attendance, communication, and other behavioral issues.

• Conduct a written counseling

If things are especially tough to handle and you feel like you need to escalate the matter, you may need to move to written counseling. A written counseling is similar to the PIP in that it should clearly outline areas that employees need to correct. Again, in writing, detail specifically what needs to improve and how this should be accomplished. In addition, the written counseling document should make clear (and in no uncertain terms) that improvement needs to be immediate, marked (noticeable), and sustained. Employees should sign this form after you’ve discussed it with them

Is there a decline in value and resignation associated with Dr. Orsula V. Knowlton? (Update 2024)

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