The counterclaim was in response to a suit by Parneros for breach of contract and defamation related to his termination for cause (see "Barnes & Noble’s Fired CEO Sues the Company"), in which he sought the payment of severance and damages.
B&N’s counterclaim tells the story of the acquisition negotiations, which began in late January with a call from the CEO of the potential acquiror (which has been identified only as a book retailer) to company Chairman (and largest stockholder) Leonard Riggio. During the subsequent negotiations, according to the counterclaim, Parneros expressed opposition to the deal internally, tried to restrict information going to the potential acquiror, and worked to keep interaction to limited times. Two meetings loomed large in the narrative.
In a March meeting, Parneros reportedly described Barnes & Noble as "spiraling" and "ugly" and questioned his decision to join the company. Despite those characterizations, the potential acquiror did make an offer in April, and sent a higher offer in late May.
On June 18, a meeting was held at the request of the potential acquiror, which asked for an explanation for a recent sales decline. At the meeting, Parneros gave what the counterclaim described as a "long, rambling monologue, which failed to address the issues and questions posed by the Potential Acquiror and, instead, portrayed the Company in an extremely and unduly negative light, with no realistic prospects for success."
The complaint continued, "Among the many shocking and disparaging statements Parneros made during the meeting, he described the Company as an 'ugly mess' and complained that the Company had ‘no talent’ before he arrived."
The result, the claim alleges, was that the meeting was cut short, a dinner planned for after the meeting was canceled, and the potential acquiror withdrew its offer the next day. The actions, according to the company, were "a disloyal attempt to put his own self-interest in front of that of Barnes & Noble and its shareholders."
Barnes & Noble also detailed its allegations of improper touching and other behavior with a female employee and bullying of the CFO. The company said it had received additional reports of inappropriate contact with female employees after Parneros was terminated.
The counterclaim asks for damages and for a declaratory judgment that the termination was appropriately made for cause, eliminating the need for severance.
Meanwhile, sales have continued to decline (see "Barnes & Noble Sales Just Keep Going Down"), the company does not have a CEO (it's being run by committee), and it's once again in sale talks (see "Barnes &U Noble Looking at Purchase Offers").
