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Billionaire investor’s letter slams Barnes & Noble chairman and family

Los Angeles billionaire Ronald W. Burkle sent a letter to Barnes & Noble Inc. shareholders accusing the company's chairman, Leonard Riggio, "of self-dealing, approving business deals that benefit himself and his family," the Los Angeles Times reported. Riggo acquired Barnes & Noble when it was a single store and built it into a large chain.

Burkle's investment firm, Yucaipa Cos., "owns about 19% of the company and wants to buy more," the article said. A "poison pill" plan currently prevents investors from owning more than 20% of the shares without board approval. Burkle is seeking three seats on the company's board.

The Los Angeles investment firm said it is unfair that ... Riggio and his family, combined, can own about 33% of the bookseller but no entity can own more than 20%.... Riggio alone owns almost 30%. The Yucaipa letter want on to say that Riggio is running Barnes & Noble like a private business. Barnes & Noble paid "almost $70 million in lease payments for office space, warehouses and bookstores owned by entities in which the Riggio family has majority or minority interest," it said.

Analysts have recommended that Barnes & Nobel begin selling some of its 717 stores, the LA Times article said. (Source: Los Angeles Times, Aug. 31, 2010.)

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