- SPAR Group (SGRP, Financial) to provide substantial corporate records following shareholder demand.
- Documents include material on the failed Highwire merger and potential governance issues.
- Focus on possible breaches of fiduciary duty by the Board and management.
SPAR Group, Inc. (SGRP) has agreed to produce a "material initial production" of its books and records after multiple formal requests from principal shareholder Robert G. Brown. Brown invoked his rights under Section 220 of the Delaware General Corporate Law to demand extensive documentation from 2021 to the present. The request aims to investigate potential breaches of fiduciary duty by the company's Board of Directors and management.
Key areas of interest in Brown's request include documents related to SPAR Group's terminated merger transaction with Highwire Capital, the purchase of 1,000,000 SPAR shares from Bartels at $1.80 per share, and various corporate governance matters. Additionally, the document request aims to uncover potential conflicts of interest, particularly involving CEO Michael Matacunas, and related-party transactions concerning companies associated with his family.
The investigation further scrutinizes potential corporate governance breaches, including bylaw violations such as board composition requirements and vote tallying issues at shareholder meetings. The comprehensive records request highlights shareholder concerns about the company's governance and leadership practices.
This development signifies a potential escalation in shareholder activism, as SPAR Group's agreement to provide the requested records acknowledges the validity of Brown's legal position. The records produced may pave the way for future litigation should significant governance failures be identified.
