Cafarella files suit after ISG ouster

August 28, 1996

Medical imaging executive Thomas Cafarella has filed a lawsuitagainst PACS software developer ISG Technologies, charging thecompany with breach of contract after it fired him as presidentand CEO earlier this month. Cafarella has the support of a groupof

Medical imaging executive Thomas Cafarella has filed a lawsuitagainst PACS software developer ISG Technologies, charging thecompany with breach of contract after it fired him as presidentand CEO earlier this month. Cafarella has the support of a groupof ISG shareholders, who say they object to ISG's decision todismiss him.

ISG, of Mississauga, Ontario, announced on Aug. 9 that Cafarellahad been removed from his positions, to which he was appointedlate last year (SCAN 12/27/97). Cafarella was a longtime Siemensexecutive who served two stints as head of the vendor's nuclearmedicine division.

The company said that chairman Dr. Michael Greenberg has assumedthe position of CEO and a search has begun for a new presidentand COO.

Cafarella responded to ISG's move with a lawsuit filed Aug.15 in Ontario's Court of Justice in Toronto against five of ISG'sdirectors, including Greenberg. The lawsuit claims that ISG violatedits contract with Cafarella by terminating his employment withoutcause, according to Cafarella attorney Christopher Ashby. Thesuit asks for $750,000, the amount of money Cafarella would havereceived in salary if he had been given proper notice of the termination,Ashby said.

Cafarella is also considering a defamation action against Greenberg,although neither Ashby nor Cafarella would provide details onwhat statements made by ISG they consider defamatory.

Meanwhile, ISG shareholder Quorum Growth of Toronto said itsthree non-executive members of ISG's board dissented the decisionto remove Cafarella. Quorum holds about 10% of ISG stock, accordingto Cafarella.

In a press release issued late last week, ISG declined to statethe reasons for Cafarella's ouster, citing the executive's lawsuitagainst the company. The company did say that there were disagreementsbetween Cafarella and a majority of the board over the company'sstrategic direction.

"Tom was removed for various reasons, which included significantpractical and philosophical differences of opinion about the futuredirection of the company, and other matters," the releasestates. "The decision resulted after much discussion betweenthe board and Tom; no other way to proceed could be found."