Sometime in 2008, billionaire investor Ron Burkle set his sights on Barnes & Noble. He knew the company's founder and chairman, Leonard Riggio, and he shared his plans to invest in B&N with Riggio, who tried to dissuade him. Riggio preferred not to have other large holders in the company he built; furthermore, a previous venture with Burkle hadn't gone well.
Burkle argued that B&N's board did not follow correct procedures in deciding to implement the pill--he focused on the fact that the Riggio family, which already owned an approximately 30 percent stake in the company, was exempted from the pill. That put the Riggios on both sides of the transaction, he said.
The chancery court disagreed. "[T]he mere decision to grandfather an existing holder does not invoke the entire fairness standard," Vice Chancellor Leo Strine wrote.