TSR Inc. has agreed to pay $705,000 to former chief executive Christopher Hughes as part of a contract-dispute settlement that draws to a close a long-running corporate drama.
In a government filing Tuesday, TSR, a Hauppauge-based computer staffing company, announced the broad settlement "with respect to all disputes and pending litigation."
"We were hopeful that mediation would lead to an agreement and are pleased that it has," Bradley M. Tirpak, TSR chairman, said in a statement. "The settlement eliminates the risk of costly litigation and allows us to focus on continuing to grow the company."
"I look forward to the next venture in my career journey," Hughes said in a statement. "I am in active discussions on several fronts: pursuing a strategic company acquisition in the IT arena; joining a private equity firm; and already entertaining several senior-level positions in the IT staffing realm."
Under the agreement, Hughes agreed to drop a state Supreme Court breach of employment lawsuit filed in March 2020 and TSR agreed to drop its counterclaims filed in May 2020.
Hughes' lawsuit had sought damages of at least $1 million plus interest, costs and legal fees related to the circumstances surrounding his separation from the company in the first quarter of 2020.
TSR countered in court papers that Hughes breached his contract by putting more than $250,000 in charges on a corporate credit card and taking trade secrets that could be used to aid a competitor.
Shares of TSR fell 1.9% to close Thursday at $9.79, around the midpoint of their 52-week range of $4.70 to $18.73.
TSR was founded in 1969 by Joseph Hughes, the father of Christopher Hughes.
Joseph Hughes retired in July 2017 and was succeeded as CEO by Christopher Hughes.
In June 2018, Joseph Hughes and his wife, Winifred, sold their 41.8% stake in the company to three institutional investors.
Those investors sought changes in the company's direction and soon clashed with management.
As CEO, Christopher Hughes sought unsuccessfully to arrange financing to buy out the dissident shareholders and fend off their efforts to insert allies on the board of directors.