4Kids Entertainment Files for Bankruptcy Under Chapter 11
04/06/2011| 02:30pm US/Eastern
4Kids Entertainment, Inc. (Pink Sheets: KIDE), the global
children's entertainment and merchandise licensing company, announced
today that it has filed a petition in bankruptcy for relief under
Chapter 11 of the U.S. Bankruptcy Code. The bankruptcy filing in the
U.S. Bankruptcy Court for the Southern District of New York also covers
all of the domestic wholly-owned 4Kids subsidiaries. 4Kids Entertainment
International, Ltd., the Company's subsidiary based in London England,
is not part of the bankruptcy filing.
In conjunction with the Chapter 11 filing, 4Kids also filed a variety of
first day motions that will allow the Company to continue to manage
operations in the ordinary course.
"We want to assure our clients, business partners and licensees that
during the pendency of the bankruptcy, 4Kids will continue to provide
the same level of service and dedication that it has in the past," said
Michael Goldstein, interim Chairman of 4Kids Entertainment, Inc. "The
Company will also continue to explore its strategic alternatives,
including, the possible sale of the business or reorganization as a
stronger and more focused company,".
The 4Kids bankruptcy filing automatically "stays" the lawsuit filed by
the licensors of the Yu-Gi-Oh! property, Asatsu-DK Inc ("ADK") and TV
Tokyo Corporation, (collectively, the "Licensors") on March 24, 2011
against 4Kids, until such time as the Court may order otherwise.
"We have made every effort to reach agreement with the Licensors," said
Goldstein. "When the Company did not receive a positive response from
Licensors to its settlement proposal, the Board of Directors was left
with little choice but to authorize the filing of a bankruptcy petition
under Chapter 11 in order to best preserve the business and assets of
4Kids Entertainment. We continue to believe that the purported
termination of the Yu-Gi-Oh! Agreement was wrongful and that 4Kids'
assessment of the audit claims will be vindicated in court. If the Court
rules in favor of the Company, 4Kids will pursue the full measure of
damages for the significant injury the Licensors have caused to the
business of 4Kids," concluded Goldstein.
4Kids is represented in its bankruptcy filing by its long standing
outside counsel, Kaye Scholer LLP.
About 4Kids Entertainment, Inc.
With U.S. headquarters in New York City, and international offices in
London, 4Kids Entertainment, Inc. (Pink Sheets: KIDE) is a global
organization devoted to the creation, development, production,
broadcasting, distribution, licensing and manufacturing of children's
Through its subsidiaries, 4Kids produces animated television series and
films, distributes 4Kids' produced or licensed animated television
series for the domestic and international television and home video
markets, licenses merchandising rights worldwide to 4Kids' owned or
represented properties, operates Websites to support 4Kids' owned or
represented properties. Additionally, the Company programs and sells the
national advertising time in "TheCW4Kids" five-hour Saturday morning
block on The CW television network.
Additional information is available on the www.4KidsEntertainment.com
corporate Website and at the www.4Kids.tv
game station site.
The information contained in this press release, other than
historical information, consists of forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995.
These statements may involve risks and uncertainties that could cause
actual results to differ materially from those described in such
statements. Although the Company believes that the expectations
reflected in such forward-looking statements are reasonable, it can give
no assurance that such expectations will prove to have been correct.
Important factors beyond the Company's control, including general
economic conditions, consumer spending levels, competition from toy
companies, motion picture studios and other licensing companies, the
uncertainty of public response to the Company's properties and other
factors could cause actual results to differ materially from the
4Kids Entertainment, Inc.
Bruce R. Foster,
© Business Wire 2011