IT staffing provider TSR Inc. (NASD: TSR) announced it filed a complaint in December against several shareholders, alleging they violated federal securities laws by failing to disclose their formation of a group that intends to seize control of TSR.
The complaint was filed in the US District Court, Southern District of New York, against Zeff Capital LP, Zeff Holding Co. LLC, Daniel Zeff, QAR Industries Inc., Robert Fitzgerald, Fintech Consulting LLC dba ApTask, and Tajuddin Haslani.
Among other things, the complaint wants the court to declare that the defendants solicited proxies without filing timely, accurate and complete reports; direct the defendants to file complete and accurate disclosures with the US Securities and Exchange Commission; enjoin the defendants from voting any of their shares prior to such time as complete and accurate disclosures have been filed; and enjoin the defendants from further violations of the Exchange Act with respect to the securities of TSR.
Zeff Capital previously announced intentions to propose two Class I director nominees for election at TSR’s annual meeting, in opposition to the nominees recommended by the company’s board. In a preliminary proxy statement filed with the SEC on Dec. 20, the board stated it believes Zeff Capital’s director nominations and stockholder proposals are part of a plan to take control of the company.
Newsday reported TSR’s newly filed lawsuit portrays the major shareholders' acquisition of 49% of the stock as an “imminent threat” to the interests of minority shareholders and as justification for adopting stockholder rights agreement — sometimes referred to as a “poison pill” — in August.
TSR’s board in July formed a special committee to review alternatives, which included a possible sale of the company. In November, TSR rejected a nonbinding buyout offer from shareholder QAR Industries. The company subsequently announced it will pursue at least one strategic acquisition following its review of strategic alternatives. The acquired firm would be in the same business sector as TSR or a complimentary business sector.
