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Court grants Telos' preliminary injunction against two directors
By Lisa Kerner
Charlotte, N.C., July 8 - The Circuit Court for Baltimore City granted the preliminary injunction filed by Telos Corp. against class D directors Seth W. Hamot and Andrew R. Siegel regarding their interference with the company's relationship with its current and former auditors, Reznick Group, PC and Goodman & Co., LLP.
According to a form 8-K filing with the Securities and Exchange Commission, the court ordered Hamot and Siegel to cease and refrain from any communications with Goodman, Reznick or any other former, current or future auditors of Telos.
The ruling stated that Hamot and Siegel "sought to disrupt the company's essential relationships to serve their own ends."
Hamot and Siegel, both officers of activist hedge fund Costa Brava Partnership III LP, knew about Telos' contractual relationships with both Reznick and Goodman, the filing noted.
According to Telos, Hamot and Siegel threatened litigation against the independent auditors even though neither auditor found fault with Telos on any accounting issues.
Telos maintains that the resignation of Reznick as the company's auditors was directly related to Hamot and Siegel's conduct, it was previously reported.
Attorneys for Hamot and Siegel have said they will file an appeal of the preliminary injunction with the Court of Special Appeals of Maryland, a Telos news release said.
Telos, an Ashburn, Va., IT solutions provider, hopes the injunction will bring an end to the "improper and self-interested acts of Seth Hamot and Andrew Siegel that violate their fiduciary duty as class D directors," a Telos spokesperson said in the release.
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