Delaware Chancery Court
G&E served as co-lead counsel asserting derivative claims on behalf of the shareholders of Barnes & Noble, Inc. (“B&N”) against the company’s Board of Directors for breach of fiduciary duty in connection with the Board’s approval of a related party transaction for $596 million. In 2009, as the threat of digital books and e-readers began to impact the traditional bookstore, the B&N Board approved the purchase of College, a national bricks and mortar college textbook retailer, from Leonard Riggio, B&N’s founder, Chairman and long-time CEO. Plaintiffs alleged that the acquisition, which was the largest in the history of B&N, was an overpayment for a company that essentially doubled B&N’s exposure to the growing digital threat, and that the driving purpose behind the deal was to enrich Leonard Riggio at the expense of the B&N shareholders. G&E led the plaintiffs’ team, which deposed 20 individuals, including Leonard Riggio, his brother Stephen Riggo (CEO of B&N at the time of the acquisition), each member of the B&N Board, the financial advisors to both B&N and College, and executives of both companies. Faced with the prospect of a trial after a March 27, 2012 ruling that a civil trial may move forward against him and two other members of the B&N Board, Leonard Riggio agreed to a settlement that required him to personally return $29 million gained from the sale of his College business to B&N. This is one of the largest non-insurance-funded settlements ever secured by shareholders in a derivative case.