Costa Brava still waiting for Telos to provide information despite court ruling

By Lisa Kerner

Charlotte, N.C., Sept. 13 - Costa Brava Partnership III, LP principals Seth W. Hamot and Andrew R. Siegel were granted a preliminary injunction preventing Telos Corp. from refusing to remit requested documents.

As of Sept. 7, Telos has not provided any of the requested minutes of the audit committee meetings for the periods since director Bernard C. Bailey became chair 13 months ago, the investors said, adding that Telos has also not provided further details of Bailey's "independence" as specified in NASD Rule 4200(a)(15) and requested during an Aug. 9 telephonic board of directors meeting.

It was previously reported that Bailey is former chief executive officer of L-1/Viisage, a Telos subcontractor.

Hamot e-mailed a copy of the court order to certain members of Telos' board of directors, according to a schedule 13D filing with the Securities and Exchange Commission.

"At this juncture I must insist that the board hire independent counsel to review director Bailey's independence and discuss such with the NASD if necessary," Hamot said in the filing.

On July 5, Siegel sought access to board minutes from 2005 to 2007, a copy of the company's 2007 budget, the company's strategic business plan and the current proxy agreement between Telos, the U.S. Department of Defense and John Porter. Telos was given a deadline of July 25 to hand over copies of the documents or face legal action.

Siegel and Hamot then filed suit in the Baltimore Circuit Court on Aug. 3 after the company failed to provide the requested information.

Cost Brava owns 506,811 shares, or 15.9%, of the Ashburn, Va., IT solutions and services provider.

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