SPAR Group (SGRP) Fires Back at Founder’s “Self-Serving” Demands
AUBURN HILLS, Mich., June 11, 2025 – In a move that’s sure to send ripples through the merchandising and marketing services sector, SPAR Group, Inc. (SGRP) has issued a sharp rebuke to Robert G. Brown, a founding figure of the company. The firm responded to what it deems “false claims” and “assertions” levied by Brown in a recent press release and filing.
Brown, who established SPAR, served as its Chairman in 1967. Now, at 83, he’s making waves again. The current Board, acknowledging his history, attempted to address Brown’s grievances privately. However, those attempts reportedly led to a series of demands that the Board has deemed self-serving.
So, what’s the ask? A cash grab, plain and simple. Sources indicate Brown demanded a staggering $15 million in immediate cash infusions, coupled with $900,000 annually in personal consulting fees. Furthermore, he sought a long-term service agreement with his defunct business, Spar Business Services (“SBS”), unrelated to SPAR Group, and an estimated $1 million personally to “[benefit] the shareholders and [offer him] security.”
The specifics are eyebrow-raising: a perpetual consulting agreement at $75,000 per month, for mergers and strategic planning, despite his decades-long absence from the industry. He also requested the rehiring of his now-bankrupt SBS, disregarding its lack of resources and capabilities. Further, he demanded the company acquire his Infotech company, valuing it at $15 million, despite having no clients and no revenue. And then, he wanted to cancel the Change in Control agreement he signed in 2022, and revert to the old by-laws to potentially have more directors on the Board. The saga doesn’t end there – a 6,000,000 share buyback, which the company has noted would be financially disastrous for the firm because they would have to address Brown’s previous requests.
“We are disappointed that Brown has chosen to take these actions and make this stunning self-serving proposal,” the Board stated. “The Board has concluded that Brown’s intent is for his sole benefit and not the benefit of all stockholders.”
This isn’t the first time Brown has pulled the rug out from under the company. In 2021, all independent directors resigned, citing concerns about Brown’s influence and threats to the company’s stability. It’s a pattern, with past actions having led to the departure of multiple CEOs and directors, even including legal battles.
The company is also noting that Brown is currently in violation of Section 16(b) of the Securities Exchange Act of 1934, and that the company has demanded that he disgorge his short-swing trading profits. SPAR Group points out that he has either failed to return the profits or respond to the demand.
It’s also noted that Brown exerts influence on the board, as he currently holds two dedicated seats. With his brother and associate serving as directors on his behalf. SPAR group has noted that per the terms of the Change of Control agreement, he could become a director himself at his discretion, which he has chosen not to do as well.
Adding fuel to the fire, Brown seeks to undermine a proposed stock compensation plan. This is a move that the board is viewing as baffling. The board views the plan as a performance-based roadmap for executives and directors.
In a point-by-point rebuttal of Brown’s claims, SPAR Group addressed issues head-on. The company maintained that its governance adheres to all applicable laws and regulations. They also pushed back on Brown’s accusations regarding the company’s proxy statements, meeting dates, and financial guidance. SPAR Group also clarified that its 2024 loss was attributed to accounting treatments, rather than a reflection of underlying financial performance and highlights their previous by-laws which included Brown’s approval.
As the company navigates these turbulent waters, stockholders and industry watchers will be keen to see how this high-stakes battle unfolds.
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