Sparton answers some of Lawndale Capital's questions in SEC filing

By Lisa Kerner

Charlotte, N.C., May 13 - Sparton Corp. said it responded to a series of written inquiries by Lawndale Capital in a May 9 letter to the shareholder.

The questions, submitted in March, were related to Sparton's 10-Q filing with the Securities and Exchange Commission for the second quarter of the fiscal year ending June 30, according to an 8-K filing with the SEC.

In its letter, Sparton provided information regarding, among other items, the treatment of corporate tax rates, the recognition of sonobuoy contract awards and a legal opinion received regarding ERISA issues raised by Lawndale.

Sparton said it declined to answer Lawndale's questions that the company believes are not related to the 10-Q filing.

Lawndale's questions and Sparton's responses are included in the 8-K filing.

In January, it was reported that Lawndale, a 9.8% shareholder at the time, took issue with what it called the "manipulation" of Sparton's defined benefit pension plan assets and said there may be personal liability to the board for violation of ERISA protocols, including:

• Improper voting of Sparton stock against beneficiaries' best interests;

• Maintaining an undiversified portfolio; and

• Over-allocation to Sparton stock while insiders sold their own shares.

Sparton and its subsidiaries provide electronic manufacturing services for government and commercial customers. The company is based in Jackson, Mich.

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