December 4, 2018

B&N filed a hard-hitting countersuit against Demos Parneros


It’s been a few months since we last checked in on the impending legal fracas between Demos Parneros and his erstwhile employeer, Barnes and Noble. Since Parneros filed his truly spicy defamation and breach of contract suit against B&N on November 28th, a hard-hitting countersuit was filed by B&N’s legal team, and presiding Judge John G. Koeltl set a schedule for discovery, which runs through June 14th, and called for a trial to commence on October 23rd, 2019.

As the legal parties for Parneros and B&N continue to hold meetings in advance of discovery, the contours of the coming legal storm have become somewhat clearer. According to reporting by Andrew Albanese at Publishers Weekly, Parneros’s legal team had moved to dismiss the B&N countersuit, but were warned last Thursday by Koeltl that such a motion was unlikely to succeed, that the court would take it’s time in evaluating the merits of both the countersuit and the motion to dismiss, and that the entire affair would likely be a waste of the court’s time. The countersuit, which was filed on October 30th, claims that Parneros intentionally scuttled a potential sale of the company earlier in the year, a clear breach of his “fiduciary duties” for which the company is seeking damages. While Parneros’ team claims that the suit is without factual merit, Keoltl’s comments suggest that the court is likely to evaluate that merit over the course of discovery and litigation, rather than dismiss it now.

During the pre-motion hearing in which Koeltl again suggested that the motion to dismiss was futile, Parnero’s representative Anne L. Clarke told the court that Parneros didn’t want the countersuit “hanging over his head,” and that the opportunity to avoid paying back more than $1 million in previous compensation would be “meaningful.” All of which makes your head spin, really.

While the B&N team didn’t speak during proceedings, they did submit a letter, outlining their position regarding the dismissal of the countersuit, a portion of which reads:

“The counterclaims, which assert that Plaintiff undermined a potential change of control transaction because of his desire to retain his position as the CEO of Barnes & Noble, are well pleaded and, as observed by the Court at the November 13, 2018 initial conference, turn on issues of fact that are not susceptible to resolution on a motion to dismiss.”

While much remains unclear about the outcome of both suits, the stage has been set for some pretty explosive discovery.





Simon Reichley is the Director of Operations and Rights Manager at Melville House.