Contrary to Early Reports Barnes and Noble Will Not Settle with Burkle

Barnes and Noble

As reported last week Barnes and Noble was being sued by stockholder Ron Burkle, who had been trying to accumulate a majority share in the company, but was halted by provisions passed by the company’s board. Today the Wall Street Journal announced Barnes and Noble had decided to settle with fellow board member Ron Burkle. The announcement, which the newspaper said was expected today NEVER happened. Instead the Wall Street Journal issued a statement around 2 pm EDT announcing that the parties had failed to come to a mutually satisfactory deal.

According to the Wall Street Journal’s early reports the now stalled deal would have halted Burkle’s proxy fight for Barnes and Noble, added two independent board members and given another board seat to a member from Burkle’s investment company, Yucaipa. Aforesaid board members were to support Riggio’s bid for re-election. An additional rumored term of the now stalled agreement was that Barnes and Noble pay Burkle’s estimated ten to fifteen million dollar legal bill from his fight to overturn a board policy keeping anyone from owning more than twenty percent of the company’s stock. Finally, Burkle was supposed to support new alternatives for the company such as a sale. Unfortunately it was announced by Barnes and Noble that the parties were unable to reach an agreement. Burkle’s Yucaipa company has been unable to be reached for comment.

In today’s competitive economy Barnes and Noble has struggled to keep up with massive bookseller and eBook retailer, Amazon.com. When Apple fully joined the eBook market this year the company took yet another blow. It is unknown at this time how the company will fare when Google enters the eBook marketplace in the very near future. It is expected that all eBook companies will be affected by Google’s entrance into the market, though in many countries, by many individuals and their estates, Google is facing battles over copyright infringement. These actions may help slow Google’s entrance into the eBook market, but eventually it will be an active part of it.

The future of Barnes and Noble is unknown at this time. The company could still wait for a ruling from the judge in Burkle’s lawsuit against the company and hope the ruling goes in their favor, but it is a risky position at best. In the situation that both sides gave equally compelling testimony the odds would still only be 50-50. It’s likely one side’s arguments were more compelling, already tipping the balance in favor of that side and changing the odds proportionally.The company is facing attempts by outside interests to purchase it if it is for sale. There is also pressure from within from Burkle. Riggio, company founder, may not have time to circle the wagons and raise the necessary money to buy the company out.

The future of Barnes and Noble is unclear. Time may clarify the picture, but at the moment little to nothing is known of what is ahead for the world’s largest bookseller. The battle for the company’s future, and very life-blood rages on. The victor is still unknown, but the losers may be the company and the world’s reading public.

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