M & A Law Prof Blog

Editor: Brian JM Quinn
Boston College Law School

Friday, July 9, 2010

Yucaipa v Barnes & Noble (day 2)

Again, courtesy of Courtroom View Network, I'm a fly on the wall of the Barnes & Noble poison pill trial.  Greg Taxin is back on the stand and now being questioned by Vice Chancellor Strine.   It's more like a conversation between two very informed people than it is a witness examination.  Vice Chancellor Strine has already made a reference to Michael Vick getting off.  This is going to be fun.    


Strine and Taxin this morning - 

VC Strine - B&N 2  Taxin-B&N 

Taxin is making the general argument that the B&N pill is novel because it's intended not to prevent a takeover, but to prevent blockholders or large shareholders from taking collective action (i.e. running a proxy contest).  Strine doesn't seem like he's on board with this, yet.

VCS: "Blockholders ... it's starting to look like Italy around here without the benefit of the food..."

Taxin is now being questioned regarding an amendment to the beneficial ownership definition and what B&N might have been trying to accomplish with its amendment:

Beneficial ownership

Taxin now under cross examination.  Got the assignment to write an expert report in the middle of June and turned around a final report in three days.  That's quick. 

Trying to make Taxin do math in his head while on the stand.  OK, I admit, I'd fail that test. C'mon give the guy a piece of paper.  

More math...this time Nachbar has helpfully done it ahead of time and provided it on a piece of paper to Taxin.  

OK, now they are arguing 6th grade math ... fractions ... I'm going to go out on a limb and suggest that Taxin is better at 6th grade math than Nachbar. ... Strine breaks out in a "cold sweat" due to the geeky back and forth over numerators and denominators.  ...  I'm going for a cup of coffee.  

Back again ... Taxin is now trying to teach Nachbar why an increase of 1 million shares in the numerator is not the same of an increase of 1 million shares in the denominator ...

Now back and forth  - not about the expert report but about whether Taxin understands an institutional investor's deposition testimony to mean that the third party admires Ron Burkle or not.  Hmm.  

Uh ... is Taxin suggesting that the database he relied on to write his report doesn't include any cases of hostile acquisitions where there was a pill in place and an acquirer ran a proxy contest in conjunction with a tender offer?  That's odd.  Strine doesn't appear to be impressed.  

Nachbar offers up a binding judicial admission on behalf of all the defendants  - B&N will not seek to enforce the language of "beneficial ownership" any differently than "beneficial ownership" is interpreted under DGCL 203.   Okay, now we're getting somewhere!

Taxin is excused.  Leonard Riggio is called ... but he's indisposed.  Okay, he's in the men's room.  He'll be in soon.   Riggio is now on the stand.  Going through some background - "Isn't it a fact ..." type questions.


Confusion reigns over binders ... it's time for a break!


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