Barnes and Noble 2001 Annual Report Download - page 42

damages, interest, costs, attorneys fees and other
relief. The plaintiffs subsequently amended their
complaint to allege eight causes of action on behalf of
The Intimate Bookshop and Wallace Kuralt, accusing
the Company and the other defendants of: (1) violating
Section 2(f) of the Robinson-Patman Act; (2) violating
Section 2(c) of the Robinson-Patman Act; (3) violating
Section 13(a) of the Clayton Act; (4) inducing every
publisher in the United States to breach contracts
with plaintiffs; (5) interfering with the plaintiff’s
advantageous business relationships; (6) engaging in
unfair competition; (7) violating Sections 349 and 350
of the New York General Business Law; and (8) being
unjustly enriched. The class action allegations have
been withdrawn and the plaintiffs voluntarily
dismissed defendants Harper Collins Publishers, Inc.
and Amazon.com, Inc. from the case.
On April 13, 1999, the Company and the other
defendants filed a motion to dismiss the second through
eighth causes of action in their entireties and for a more
definite statement of the remaining allegations of the
first cause of action. As a result, the plaintiffs’ third
through eighth causes of action were dismissed with
prejudice, as were all claims asserted by Wallace Kuralt
in his individual capacity. Pursuant to the court’s order,
plaintiff The Intimate Bookshop, Inc. filed a second
amended complaint on March 13, 2000. The Company
served an answer on April 5, 2000 denying the material
allegations of the complaint and asserting various
a ff i rmative defenses. On January 11, 2002, the Company
and the other defendants filed a motion for summary
judgment. A hearing on that motion was held on March
22, 2002. The Company intends to continue to
vigorously defend this action.
On November 3, 2000, plaintiffs Lucky, Inc. and
Bookmark It, LLC, operators of an independent
bookstore in Great Falls, Montana, filed an action
against the Company, Borders, certain book publishers
and others in the United States District Court for the
District of Montana. Plaintiffs filed an amended
complaint on November 14, 2000. In their amended
complaint, plaintiffs purported to assert claims on
behalf of all persons or entities who as part of their
business purchase or sell books. Plaintiffs alleged that
the Company entered into agreements with book
publishers and distributors pursuant to which the
Company received discounts and other benefits that
were not available to plaintiffs. Plaintiffs alleged that
such agreements were in violation of the Robinson-
Patman Act and the Montana Unfair Trade Practices
and Consumer Protection Act. This action was settled
in August 2001.
In addition to the above actions, various claims and
lawsuits arising in the normal course of business are
pending against the Company. The subject matter of
these proceedings primarily includes commerc i a l
disputes, personal injury claims and employment issues.
The results of these proceedings are not expected to
have a material adverse effect on the Company’s
consolidated financial position or results of operations.
19. CERTAIN RELAT I O N S H I PS AND RELAT E D
T R A N SACTIONS
The Company believes that the transactions and
agreements discussed below (including renewals of any
existing agreements) between the Company and its
affiliates are at least as favorable to the Company as
could be obtained from unaffiliated parties. The Board
of Directors and the Audit Committee must approve in
advance any proposed transaction or agreement with
affiliates and will utilize procedures in evaluating the
terms and provisions of such proposed transaction or
agreement as are appropriate in light of the fiduciary
duties of directors under Delaware law.
The Company leases space for its executive offices in
properties in which Leonard Riggio, Chairman of the
Board and principal stockholder of Barnes & Noble,
has a minority interest. The space was rented at an
aggregate annual rent including real estate taxes of
approximately $3,966, $3,378 and $2,879 in fiscal
years 2001, 2000 and 1999, respectively. Rent per
square foot is approximately $28.00, which is below
market.
The Company leases a 75,000-square-foot off i c e /
warehouse from a partnership in which Leonard Riggio
has a 50 percent interest, pursuant to a lease expiring
in 2023. Pursuant to such lease, the Company paid
$490, $648 and $573 in fiscal years 2001, 2000 and
1999, respectively.
The Company leases retail space in a building in which
B a rnes & Noble College Bookstores, Inc. (B&N
College), a company owned by Leonard Riggio,
subleases space for its executive offices from the
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S c o n t i n u e d
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