Qualstar Proxy Battle EscalatesTuesday, May 29, 2012
Qualstar Corp. on Tuesday urged shareholders to reject an effort by its largest institutional shareholder to replace the current board of directors with its own slate.
BKF Capital Group Inc., of Boca Raton, controls 18.7 percent of the Simi Valley maker of data storage and power supply products and is the second largest shareholder. BKF Capital’s controlling shareholder, Steven Bronson, this month called for a Qualstar shareholder special meeting on June 20, saying current management and directors are not maximizing shareholder value.
On Tuesday, Qualstar’s board said BKF Capital moves amounted to a “poorly-timed and imprudent” effort to “take control” of the company.
“Qualstar's board is undertaking new initiatives, including the recent appointment of Lawrence Firestone as the company's new CEO, to increase sales and return Qualstar to sustained profitability,” the board said in a statement.
BKF Capital is offering its own slate of candidates, including Bronson, to replace the current board. In a letter to shareholders, Bronson objected to the board decision earlier this month to appoint Firestone to succeed William J. Gervais, who is retiring next month. Gervais is the largest single shareholder, controlling 27 percent of shares.
Firestone has been a director about a year. He currently is chief financial officer of Colorado Springs, Colo storage systems provider Xiotech Corp., but BKF Capital noted he has not been a corporate chief executive.
Among the changes BKF Capital wants at Qualstar is for the company to sell off what Bronson considers an unprofitable data tape libraries business.
Qualstar shares closed up 3 cents, or 1.5 percent, to $1.97 on the Nasdaq.