The battle over Barnes & Noble’s corporate governance has escalated into a legal beef.
Los Angeles billionaire Ronald Burkle has sued the New York-based book retailer, accusing its founding Riggio family of creating a “slanted playing field” against other shareholders.
In the complaint filed late Wednesday, Burkle accused Barnes & Noble Chairman Leonard Riggio of self-dealing, charging that Riggio’s sale of a college bookstore chain to the company last year burdened shareholders with debt.
Meanwhile, “Riggio and his wife received over half a billion dollars in cash and notes on the transaction,” according to the suit.
In a written statement, Barnes & Noble’s board of directors charged that Burkle filed a “meritless lawsuit to advance his own self-serving agenda and we intend to defend ourselves vigorously against these baseless claims.”
At issue is a poison-pill provision that prevents any shareholder other than the Riggio family from owning more than 20 percent of the company’s stock.
While the company chairman owns nearly 31 percent of Barnes & Noble shares, Burkle in January had asked the company’s board for permission to raise his stake to as much as 37 percent without triggering the poison pill.
The poison pill also prevents shareholders, including Burkle, from communicating with each other about the company if their combined shares total more than 20 percent.
As of May 5, Burkle’s investment firm Yucaipa Cos. owned more than 19.6 percent of Barnes & Noble shares, according to a securities filing this week.
“As long as that poison pill is in place, there’s no way to win a proxy contest,” even though Burkle plans to nominate three directors to the company’s board this year, said a source.
Barnes & Noble shares yesterday fell $1.10, or 5.2 percent, to $19.92. james.covert@nypost.com