1 On September 4, 2010, Leonard Riggio, the founder and chief executive officer (CEO) of Barnes &...
Question:
1 On September 4, 2010, Leonard Riggio, the founder and chief executive officer (CEO) of Barnes & Noble (BN), the U.S.-based bookseller, learned that Ronald Burkle had filed a "Definitive Proxy Statement" through his Yucaipa Fund for the upcoming Annual Stock-holder Meeting on September 28. The Yucaipa proxy (see Exhibit 1) was a challenge to the set of nominees recommended by BN to be elected to the company's board, and the proxy made a case for the election of Yucaipa's own nominees instead. 2
For Riggio, this
was the second piece of disconcerting news concerning Yucaipa in the last two days. On September 2, Burkle had announced that he was appealing the Delaware Chancery Court's rejection of his challenge to a BN poison pill.
2 As Riggio examined in detail the contents of the Yucaipa proxy, he realized that he
and BN's board of directors would have to address this challenge prior to the Annual Stockholder Meeting. As the owner of 18 percent of BN stock and a vociferous critic of Riggio's strategy for BN, Burkle's intention to appeal the Delaware ruling and challenge
the company's board nominees warranted a response from Riggio, lest he lose control of the company he had founded.
BARNES & NOBLE
3 BN was a New York-based bookstore chain (NAICS 451211, SIC 5942) that engaged in the sale of trade books (hardcover and paperback mass-market fiction and nonfiction), children's books, e-books and other digital content, e-readers and related accessories, bargain books, magazines, gifts, caf products and services, music, and movies to consumers through
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