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Barnes & Noble Inc
Aletheia Research & Management Inc. filed for bankruptcy after co-founder Roger Peikin sued co- founder Peter Eichler in a dispute arising from a U.S. Securities and Exchange Commission probe into the investment adviser, according to court documents.
Aletheia listed assets and liabilities of $10 million to $50 million in a Chapter 11 petition filed yesterday in U.S. Bankruptcy Court in Los Angeles. Chapter 11 of the federal bankruptcy code is typically used by companies that plan to keep operating while they reduce debt and reorganize.
Eichler, the chief executive officer, forced Peikin, who holds 30 percent of the company, out of the day-to-day operations in June 2010 by “hijacking control of Aletheia’s board,” Peikin claimed earlier in a lawsuit in state court in Los Angeles County.
The “final break” between the founders “came when Peikin objected to Eichler’s handling of an ongoing investigation by the U.S. Securities and Exchange Commission,” Peikin said in his complaint.
Peikin first sued Eichler in November 2010, claiming wrongful termination. He updated the allegations twice with more details. The latest version of the complaint was filed in July.
Eichler didn’t return a call requesting comment on the bankruptcy and Peikin’s lawsuit.
Aletheia was the third largest shareholder of Barnes & Noble Inc. (BKS) when Ron Burkle’s Yucaipa Cos. was fighting to add a slate of candidates to the bookseller’s board of directors. The Barnes & Noble board was concerned about Aletheia’s collaborating with Yucaipa on a takeover bid, according to court documents.
The takeover never happened, and Aletheia is no longer listed as a major shareholder of Barnes & Noble.
The biggest unsecured debts listed in the bankruptcy petition included $5.5 million owed to William C. Mow of Los Angeles, $16 million in legal damages claimed by Proctor Investments of New York and $2.5 million claimed by the California Franchise Tax Board. The Proctor and Franchise Tax claims are disputed by Aletheia.
The bankruptcy case is In re Aletheia Research & Management Inc., 12-bk-47718, U.S. Bankruptcy Court, Central District of California (Los Angeles). The lawsuit is Peikin v. Aletheia Research & Management Inc., BC450058, Superior Court of California, Los Angeles County.
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