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MGA officials in talks on Little Tikes' future
Published on Thursday, Aug 28, 2008
Also unclear is what impact the financial verdict will have on MGA's other divisions, including Hudson-based Little Tikes.
A federal jury awarded toy giant Mattel Inc. damages Tuesday in its copyright infringement lawsuit against MGA, but lawyers for the two playtime powerhouses are still wrangling over whether MGA can continue to make the saucy Bratz line.
U.S. District Judge Stephen Larson must also consider whether any of the damages are duplicative before setting a final amount to be paid to Mattel.
Still, Mattel hailed the jury's unanimous decision as a victory, although the amount fell far short of the $1.8 billion that its attorneys had sought.
''Mattel has pursued this case first and foremost as a matter of principle,'' Mattel Chief Executive Robert A. Eckert said. ''We have an obligation to defend ourselves against competitors who choose to engage in fraudulent activities against us.''
However, analysts said the decision was relatively neutral to the toy company and urged investors to snap up the stock on any weakness.
Stifel Nicolaus analyst Drew E. Crum said in a note to investors that the outcome would be somewhat disappointing for Mattel because it ''does not weaken a key competitor in the fashion doll category, where Barbie's market share has contracted.''
MGA and its chief executive, Isaac Larian, were told to pay a combined $90 million in three causes of action related to Mattel's employment contract with designer Carter Bryant, who developed the Bratz concept. The jury also ordered MGA, Larian and subsidiary MGA Hong Kong to pay $10 million for copyright infringement.
Larian said he would appeal the verdict and MGA attorney Thomas Nolan contended that the three awards related to the contract dispute were duplicative. Nolan said he planned to ask Larson to set total damages at no more than $40 million.
MGA said reports of $100 million in damages were inaccurate and said the jury awarded $20 million.
MGA Vice President of Public and Media Relations Dave Malacrida said the company could not comment about other operations, such as Little Tikes, or the verdict while the case is ongoing.
Two years ago, MGA purchased Little Tikes from Newell Rubbermaid. The company has been in discussions with the city of Hudson and state officials to try to broker some deals to have the company stay in Ohio.
Hudson Economic Development Director Jody Roberts said the last word city officials had was that Little Tikes would remain in its current 122-acre complex off Barlow Road and look into doing some type of lease of the areas they do not need.
''They want to stay here and they are trying to make the numbers work,'' she said. Roberts said city officials had not heard from Little Tikes or MGA officials about how the Mattel verdict might affect the division.
''It's a valuable business. It's been here for many years. They're a great corporate citizen in the city of Hudson and we'd love to see them stay,'' she said.
Get the full article here.
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