First, some background. Leonard Riggio is the chairman and largest stockholder of the company, which has been trying to sell itself (on its own terms, more or less) for awhile now, given that their sales are declining and (in my opinion) they want to attract fresh capital for their reinvention as a cutting-edge digital media company. Ron Burkle is a mega-rich investor who has accumulated almost 20% of BKS's stock and, despite his comments to the contrary, is widely believed to be attempting a takeover of the company.
Barnes & Noble, however, has what's called a "poison pill" defense (named for a spy's last resort should he or she be captured by the enemy) that makes it prohibitively expensive for Burkle to reach 20% (Riggo himself owns almost 30%). (If you're interested, you can read the details here.) Long story short: Burkle wants Barnes & Noble, which comes with the ability to unseat Riggio and to add his own people to the company's board of directors. Riggio, of course, is fighting back.
Talks have repeatedly broken down this summer, culminating with a Delaware judge's ruling that BKS was not being unreasonable in its defense against Burkle. This resulted in a proxy fight that, if successful, will accomplish the same thing: eliminate Riggio and add Burkle to the board.
This doesn't mean a whole lot for Barnes & Noble in the short term (at least, not in an operational sense); business will continue as usual despite the mounting legal fees. While some have speculated that the battle against Burkle is partially responsible for BKS's 1Q decline, I'm more inclined to think it has to do with slumping hardcover sales and reduced consumer spending in general. In short: Barnes & Noble is, à mon avis, far from doomed, but they certainly have their work cut out for them.
What do you think, mes auteurs?