TSR Inc.'s board of directors Tuesday announced it is postponing its annual meeting amid a proxy challenge from its largest shareholder and two lawsuits filed against the company and its directors.
TSR, a Hauppauge-based provider of IT staffing and consulting services, said it will be filing a revised proxy statement with the Securities and Exchange Commission and the postponement "will provide the stockholders additional time" to digest the material.
Shares of TSR fell 3.5 percent to $5.17 in midday trading Tuesday. Twelve months ago the stock was trading at $4.80.
On Thursday, Manhattan-based Zeff Capital LP, the owner of 22.3 percent of shares, filed an updated proxy promoting its two dissident director candidates and arguing that TSR's stock has "stagnated for decades" and operating performance "has been a disappointment," while the company's chief executives have collected about $8.9 million in salary and bonuses over the past 10 years.
The annual meeting had been scheduled for Nov. 28, and the company did not immediately announce an alternative date.
TSR chief executive Christopher Hughes and the board of directors have been under fire for months.
In June, Hughes' parents, Joseph and Winifred Hughes, sent a letter to TSR’s board requesting that the company be sold. Joseph Hughes, founder of TSR, served as chairman and CEO until July 2017, when Christopher Hughes assumed those positions.
In July 2018, Joseph and Winifred Hughes sold their 41.8 percent stake in the company to Zeff Capital — which already had a 4 percent stake — and to its partners QAR Industries Inc., of Mineral Wells, Texas, and Fintech Consulting LLC, based in Iselin, New Jersey.
One of the lawsuits was filed in Delaware by Fintech, which said the board breached its duty to shareholders by approving a measure that would make a hostile takeover more difficult. The lawsuit in the Delaware Court of Chancery seeks to invalidate the anti-takeover measure, known on Wall Street as a "poison pill," and seeks unspecified monetary damages.
Another stockholder lawsuit, filed in State Supreme Court in Queens County, charged that the board should have taken actions to prevent the stock sale by Joseph and Winifred Hughes to preserve a premium price for stock sales by minority shareholders.
Christopher Hughes, reached by phone, declined to comment further on the proxy issues. A call seeking comment from Daniel Zeff, president of Zeff Capital, was not returned.