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B&N settles with Riggio
01.01.70 | Katie Allen
Barnes & Noble has reached a $29m settlement with its founder and chairman Leonard Riggio, concluding a shareholder lawsuit over B&N's 2007 acquisition of Barnes & Noble College Booksellers.
Riggio will give up $29m to settle the shareholders' derivative action, which was brought about by the shareholder group which challenged B&N's board’s approval of the $514m acquisition, alleging that the deal overpriced the college retailer. At the time, B&N College Booksellers was a separate company wholly owned by Riggio and his wife, Louise.
The deal meant a heavy investment in bricks and mortar stores just as book buyers were migrating to e-book buying.
The settlement means Riggio has agreed to a $22.75m reduction in the original purchase price, and will also give up $6.3m in interest payments on the $150m loan owed by B&N to Riggio which formed part of the purchase payments.
Law firms Grant & Eisenhofer and Chimicles & Tikellis reached the settlement, with G&E partner Michael Barry saying: "We are very pleased with today's settlement on behalf of Barnes & Noble. We believe the transaction as originally structured was unfair to the company, and are happy the company will receive this compensation."
C&T's co-lead counsel Pamela S Tikellis said: "The settlement will provide significant financial benefits to Barnes & Noble and its investors as the company further expands its business into the digital market."
The settlement was filed yesterday [14th June] at Delaware Chancery Court, which must approve it.