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Barnes & Noble, Inc.

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Chimicles & Tikellis LLP has filed a shareholder lawsuit, derivatively on behalf of Barnes & Noble Inc. (“B&N” or the “Company”), in the Court of Chancery of the State of Delaware (the “Action”).  The Action alleges wrongdoing by the B&N directors for recklessly causing the Company to acquire Barnes & Noble College Booksellers, Inc. (“College Books”) (the “Transaction”) from B&N’s founder, Chairman and controlling stockholder, Leonard Riggio (“Riggio”) at a grossly excessive price, subjecting B&N to excessive risk.

On September 1, 2009, the Court appointed Chimicles & Tikellis LLP as Co-Lead Counsel in the Action.

On August 7, 2009, B&N agreed to acquire the privately-held College Books from Riggio, in a transaction valued at $596 million.  In the Acquisition, B&N received the “Barnes & Noble” trade name, which was owned by College Books and which B&N licensed from College Book and College Books’ brick and mortar operations.  The Transaction was completed on September 30, 2009.

The Action alleges that as a controlling stockholder of B&N, Riggio is obligated to sell College Books at a price entirely fair to B&N’s stockholders and engage in a process that is also entirely fair.  The Action further alleges that the B&N Board members acted disloyally and caused B&N to waste valuable corporate assets by allowing the B&N Chairman and 32.1% shareholder, Riggio, to force B&N to acquire his company, College Books, at an unfairly high price, exposing B&N to substantial increased risk.

A public version of the Co-Lead Plaintiffs Verified Consolidated Shareholder Derivative Complaint, which was filed under seal, is available below.

On October 21, 2010, ruling from the bench, the Court allowed most of Co-Lead Plaintiffs’ claims for breach of fiduciary duty to survive against Riggio and all but two of the remaining B&N directors.

On December 23, 2011, all Defendants except for Leonard Riggio, the Company’s founder, Chair and controlling shareholder, filed motions for summary judgment and supporting briefs.  On March 27, 2012, the Court heard oral argument on Defendants’ motions for summary judgment.  Ruling from the bench, the Court allowed Co-Lead Plaintiffs’ claims for breach of fiduciary duty to proceed to trial against Riggio and two of the remaining B&N directors.

Trial is scheduled for the full week of June 18, 2012.

Oracle Corporation

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On October 14, 2011 Chimicles & Tikellis, LLP made a books and record demand on Oracle Corporation (“Oracle” or the “Company”) pursuant to 8 Del. C. § 220 to investigate breaches of fiduciary duty and mismanagement by the Oracle Board of Directors in connection with Oracle’s acquisition (“Transaction”) of Pillar Data Systems, Inc. (“Pillar”), a company controlled by Lawrence J. Ellison (“Ellison”), Oracle’s CEO and largest shareholder.  Oracle subsequently produced books and records (the “Section 220 Documents”) pursuant to a confidentiality agreement.

On June 29, 2011, Oracle agreed to acquire 100% ownership of the privately-held Pillar.  Pillar was directly and indirectly majority owned and controlled by Ellison.  Each share of Pillar common and preferred stock was exchanged for rights to receive an earn-out in 2014.  Immediately prior to the Acquisition, a $544 million loan owed to Ellison by Pillar was converted into preferred shares of Pillar, which have a right to dividends accruing at an annual rate of 1.5%.  The Preferred stock earn-out rights will have priority over the earn-out rights of the Pillar common stock and option holders.

After receiving and reviewing the Section 220 Documents, on January 13, 2012, Chimicles & Tikellis LLP filed a shareholder lawsuit, derivatively on behalf of Oracle, in the Court of Chancery of the State of Delaware (the “Action”).  The Action alleges wrongdoing by the Oracle directors for recklessly causing the Company to acquire Pillar from Ellison in a transaction with an unfair price structure.

The Action alleges that as a controlling stockholder of Oracle, Ellison is obligated to sell Pillar at a price entirely fair to Oracle’s stockholders and engage in a process that is also entirely fair.  The Action further alleges that the Oracle Board members acted disloyally and caused Oracle to waste valuable corporate assets by allowing the Oracle Chairman and controlling shareholder, Ellison, to force Oracle to acquire his company, Pillar, in a transaction with an unfair price structure, exposing Oracle to substantial increased risk.

On November 30, 2011, the Court appointed Chimicles & Tikellis LLP as Co-Lead Counsel in the Action.  On March 5, 2012, Defendants filed a motion to dismiss and a supporting brief.  The opposition brief to Defendants’ motion to dismiss was filed on April 27, 2012.  A hearing on Defendants’ motion has not been scheduled.

A public version of the Co-Lead Plaintiffs First Amended Verified Shareholder Derivative Complaint, which was filed under seal, is available here.

“Never Kink” and “Kink-Free” Garden Hoses – False Claims Class Action Investigation

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Chimicles & Tikellis is investigating a potential class action lawsuit against the makers of garden hoses advertised as “never kinking” and/or “kink-free.”  These makers may include Apex, Craftsman, Teraflex, Ace Hardware, and Gilmour. Some consumers have complained that these “kink-free” hoses still kink regardless of the manufacturers claims and lifetime guarantees.  Some consumers have paid a premium price, above that of standard hoses, for the promise of “never kinking” and “kink-free” garden hoses only to later be disappointed with the product.

If you or someone you know has purchased a garden hose with advertising claims of “never kinking” or “kink-free,” please use the “Email us about this Case” button to contact the following attorneys.

Employers Requiring Facebook Passwords

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Chimicles & Tikellis is investigating a potential class action on behalf of individuals who have been required to provide their social media login and password information to prospective employers during job interviews or on job applications.  It has been reported that numerous large employers have a policy requiring job applicants to provide their Facebook login and password information.  If you or someone you know has been required to provide this information to prospective employers, please use the “Email us about this Case” button to contact the following attorneys.

Internal Subscription Protection Service – Unauthorized Charge for Magazine Subscription

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C&T is investigating a potential class action lawsuit against certain companies, including Internal Subscription Protection Service, for automatically debiting and charging individuals bank accounts and/or credit cards for magazine subscriptions, often times without a person’s authority or knowledge.  If you have experienced an unauthorized charge for a magazine subscription then please contact us.

Empire State Realty Trust

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If you are an investor or “Participant” in one of the following Limited Liability Companies (“LLCs”), your rights and investment may be impacted by the recent announcement of the consolidation of the LLCs into Empire State Realty Trust, Inc., a new public REIT:

  1. Empire State Building Associates L.L.C.;
  2. 60 East 42nd St. Associates L.L.C;
  3. 250 West 5th St. Associates L.L.C.;
  4. Marlboro Building Associates, L.L.C.;
  5. 1350 Broadway Associates L.L.C.;
  6. 112 West 34th Street Associates L.L.C.; and
  7. 1400 Broadway Associates L.L.C

These LLCs were initially formed between 1953 and 1969 for the purpose of acquiring and operating certain real property, including the Empire State Building.  Anthony E. Malkin, Peter L. Malkin, and Malkin Holdings L.L.C. (the LLCs’ supervisor) together with other Malkin affiliates have proposed to convert the equity interests owned by the Participants in the LLCs into cash or interests in the REIT through a “roll up” transaction.

If you are a Participant in one of the above listed LLCs and would like to discuss your options, please contact Kimberly Donaldson Smith, 361 West Lancaster Avenue, Haverford, PA 19041 Phone: 610-642-8500, kimdonaldson@chimicles.com

AIMCO Partnerships Buyout Case — Shelter Properties II Limited Partnership, National Property Investors III, US Realty Partners Limited Partnership, Shelter Properties IV Limited Partnership, Fox Strategic Housing Income Partners.

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A Settlement of the Action was reached in July 2011.  The Court has granted final approval of the Settlement. More information about the Settlement, including a copy of the Class Notice can be accessed below.

Chimicles & Tikellis LLP filed a proposed class action in Denver, Colorado on behalf of the unaffiliated limited partners of Shelter Properties II Limited Partnership, National Property Investors III, US Realty Partners Limited Partnership, Shelter Properties IV Limited Partnership, Fox Strategic Housing Income Partners (the “Five Partnerships”).  The action arose from the buyout in early 2011 (“Merger”) of the unaffiliated limited partnership interests (“Unit(s)”) in the Five Partnerships by Apartment Investment and Management Company (“AIMCO”) and its affiliates (“Defendants”).

Over time, Defendants had acquired a majority of the outstanding Units of the Five Partnerships and ownership of their general partners.  In September 2010, Defendants announced that they would cash out the Units held by the unaffiliated LPs, which would result in Defendants owning a 100% interest in each of the Five Partnerships.  The Class consists of the minority, unaffiliated limited partners of each of the Five Partnerships.

Because Defendants owned a majority of the Units, the Merger was proposed and consummated without the approval or ratification by the LPs.  On September 14 and October 12, 2010 Defendants filed papers with the SEC, including Form S-4s, which were thereafter amended and/or supplemented (“Prospectuses”) and disseminated them to the LPs, which announced the Merger and the calculation of the Merger consideration.  The merger consideration to be paid to the LPs in the Merger was calculated primarily by taking Defendants’ appraised value of the Properties, adding additional assets, and then deducting mortgage balances, advances from Defendants, and other liabilities.

In the Merger, Defendants offered the LPs the right to contractually seek appraisal rights (“Contractual Appraisal Right Option”).  The Contractual Appraisal Right Option provided that the Defendants would unilaterally select three arbitrators to sit on a panel and would conduct the arbitration in Denver, Colorado and that the arbitration panel was permitted to charge the LPs with the costs of the appraisal proceeding.

Also as part of the Merger, Defendants offered to pay the LPs an additional cash payment, only if the LPs agreed to execute a waiver and release of Defendants from a broad array of potential claims not only related to the Merger but to “any other circumstance,” or any matter related to their ownership of Units, and for claims which the LPs might possess, but did not know or suspect to exist (“Waiver & Release”).

The Merger was consummated on February 11, 2011.

The Action contends that Defendants breached, or aided and abetted breaches of, fiduciary duties owed to the LPs, for proposing and implementing the Merger which was unfair to the LPs with respect to the price they were paid by Defendants for their Units, and with respect to the process employed in doing the Merger. In the Action, the Plaintiffs sought monetary damages and alleged that, among other things, Defendants misled the Class and gave them inadequate consideration for their Units in the buyout.

The Plaintiffs and Defendants entered into a Stipulation of Settlement in July 2011, which provides that the LPs will receive an additional payment for the Merger.  The Notice of Pendency of Class Action Settlement, attached below, which was sent to the LPs contains details concerning the Settlement and your rights.

If you have any questions about the Notice, your rights or the litigation, please contact Kimberly Donaldson Smith, 361 West Lancaster Avenue, Haverford, PA 19041, Phone: 610-642-8500, or by email at kimdonaldsonsmith@chimicles.com.

Tesla Motors Roadster – Battery Failure and Repair: “Brick”

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Chimicles & Tikellis is investigating a potential class action lawsuit on behalf of Tesla Roadster vehicle owners and lessees.  These electric vehicles may suffer from a design defect in which they become immobile and cannot be started, pushed, or towed when the battery becomes completely discharged.  A Tesla vehicle in this condition has also been referred to as a “brick”.  Vehicle owners and lessees may experience a complete discharge of the battery when simply leaving the vehicle at the airport or other storage-like facility without access to charge the vehicle.

Some owners and lessees may have been required to undergo costly repairs of the battery and related items due to this potential design defect. If you have experienced any of the above problems with your Tesla Roadster please contact the attorneys below.

 

Homeowner’s Insurance – Forced-Placed Insurance and Lender-Placed Insurance Policies

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Chimicles & Tikellis is currently investigating mortgage companies and banks regarding alleged abuses of forced-placed insurance (also known as lender placed insurance).  Normally, mortgage agreements include a promise to maintain a homeowner’s insurance policy on the property being mortgaged.  Many people don’t realize that if they allow a homeowner’s insurance to lapse, banks and other lenders can legally re-insure the mortgaged property by obtaining homeowner’s insurance to replace the lapsed policy and forcing the homebuyer to pay for it.

A lapse in coverage can occur for a variety of reasons, including the failure of mortgage servicers to pay for homeowner’s insurance out of funds already placed in escrow by the homebuyer.  When this occurs, it may result in the mortgage servicer imposing whatever homeowner’s insurance it so chooses, usually at a substantial increase in cost to the homeowner over the previous policy.  In addition to being more expensive than a policy most homeowner’s could purchase independently, lender forced insurance policies almost always offer the homeowner less protection, usually just insuring the amount of the loan rather than the value of the home.  The increased cost of forced-placed insurance also adds to the homeowner’s debt obligation and can result in an increase in monthly payments.

If you were subjected to force-placed insurance please contact the attorneys listed below:

Background Checks – Class Action Investigation

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When an employer uses consumer reports to evaluate its employees or employment applicants, the Fair Credit Reporting Act (FCRA) places three different obligations on the employer.

  • The employer must disclose to the employee or employment applicant, in a document consisting solely of the disclosure, that a consumer report may be obtained about the individual for employment purposes.
  • The employer must obtain the employee’s or employment applicant’s written authorization to obtain the report.
  • If the employer intends to take adverse action based in whole or in part on a consumer report, then it must first provide the employee or employment applicant a copy of the consumer report and a summary of their rights under the FCRA, as published by the Federal Trade Commission (“FTC”).

Under the FCRA, the definition of “consumer report” includes a criminal background check used for employment purposes, and the definition of “adverse action” includes “a denial of employment or any other decision for employment purposes that adversely affects any current or prospective employee.”

If you believe your rights may have been violated due to an improper or inaccurate background check, please contact the attorneys below.