Costa Brava Suit Dismissed

Apr 17 2008 | 7:28am ET

In January, activist hedge fund Costa Brava’s battle with defense contractor Telos Corp. received a mortal blow in court. This week, the same Baltimore judge finished it off.

Costa Brava and New York-based Wynnfield Partners saw all of their remaining claims against Telos dismissed by Judge Albert Matricciani of Baltimore City Circuit Court. The judge ruled that Costa Brava, which was trying to have Telos put into receivership and dissolved, “failed to state causes of action.”

“The present litigation has been lengthy and certainly costly to the parties,” Matricciani wrote. “As a result of the Court’s ruling on the present motion, it will come to an end, at least in this forum.”

It is unclear as to whether Costa Brava will appeal the ruling.

“After nearly three years, this case is over,” Telos CEO John Wood, the focus of fierce attacks by Costa Brava, said. “The activist hedge fund, Costa Brava, has failed in its efforts to extract dividend payments out of turn at the expense of our other shareholders.”

Costa Brava owns 16% of Telos’s exchangeable redeemable preferred shares, and has two seats on its board of directors.

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