Louisiana Municipal Police Employees Retirement System, Represented by Kahn Swick & Foti, LLC, Obtains $29 Million Recovery for Barnes & Noble in Shareholder Derivative Lawsuit
Company founder Leonard Riggio agrees to repay 5% of purchase price for his wholly-owned college textbook firm
NEW ORLEANS, June 15, 2012 /PRNewswire/ -- Louisiana Municipal Police Employees Retirement System (LMPERS), represented by court appointed co-lead counsel Kahn Swick & Foti, LLC, has reached a settlement of shareholder litigation on behalf of Barnes & Noble (NYSE: BKS) arising from the bookseller's 2009 acquisition of a textbook retailer wholly owned by Barnes & Noble's founder and controlling shareholder, Leonard S. Riggio. LMPERS and other shareholders had alleged that the Barnes & Noble Board of Directors approved the acquisition of the textbook company, Barnes & Noble College Booksellers, Inc., at an unfair price and pursuant to an unfair process—effectively elevating Riggio's interests above those of Barnes & Noble.
Under the settlement, which is subject to approval by the Delaware Court of Chancery, Riggio will refund $29 million to Barnes & Noble, in the form of both a reduced purchase price and lowered interest payments on a seller note executed in favor of Riggio and maturing in 2014. If approved by the court, the settlement will resolve litigation that has been ongoing since shortly after the deal was announced three years ago.
The lawsuit was initiated by LMPERS and challenged the Barnes & Noble Board's approval of the transaction. The suit alleged that the Board did not negotiate aggressively for the textbook retailer and caused Barnes & Noble to pay too much to Riggio for College Booksellers in light of accelerating industry trends away from bricks-and-mortar operations and towards digital book formats.
The settlement followed several favorable court rulings in favor of LMPERS and other plaintiffs. Chancery Court Chancellor Leo E. Strine, Jr. denied in substantial part a motion to dismiss filed by Barnes & Noble directors in October 2010. Following substantial discovery, in March 2012, the Court denied in part motions for summary judgment filed by the directors, and June 18, 2012 was set for the start of trial against Riggio and two other directors.
R. Randall Roche, LMPERS's general counsel, said: "This settlement provides meaningful compensation to the Company and successfully resolves our claims that the deal was overpriced in the first place. We are happy that we were able to play a role in obtaining this recovery for the Company."
LMPERS was one of only two institutional plaintiffs appointed by the court to lead the litigation on behalf of shareholders which managed to hold shares continuously since 2009. Two other plaintiff institutions voluntarily dismissed themselves from the action earlier this year because they had disposed of their shares.
Kahn Swick & Foti represented LMPERS and the other remaining co-lead plaintiff together with Delaware liaison counsel.
The case is In Re Barnes & Noble Stockholder Derivative Litigation, C.A. No. 4813-CS.
About Kahn Swick & Foti, LLC
To learn more about KSF, whose partners include the Former Louisiana Attorney General, Charles C. Foti, Jr., and other lawyers with significant experience litigating complex securities class actions nationwide on behalf of both institutional and individual shareholders, you may visit www.ksfcounsel.com.
Kahn Swick & Foti, LLC
Lewis Kahn, Managing Partner, 877-515-1850
or after hours via cell phone 504-301-7900
206 Covington St.
Madisonville, LA 70447
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