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4Kids Threatens Chapter 11 If Suit Not Settled Date: 4/1/2011 |
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4Kids Entertainment released its Q4 and full year results on Thursday, and in the process served notice that it may file for Chapter 11 if it is not able to settle the suit filed against it by TV Tokyo and NAS (see ?4Kids Sued?) over Yu-Gi-Oh! licensing. ?If such attempts [to settle the dispute] are unsuccessful,? the 4Kids announcement said, ?4Kids intends to take all actions it deems necessary to preserve its business and assets, including the potential filing of a petition under Chapter 121 of the United States Bankruptcy Code.? The suit asked for a minimum of $4,792,460 from 4Kids in payment for royalties the Yu-Gi-Oh! anime rightsholders claim they are owed. 4Kids had around $11.3 million in liquid assets at the end of 2010, but lost $7.4 million in Q4 alone. 4Kids argues that the termination by TV Tokyo and NAS ending its licensing agreement for the Yu-Gi-Oh! property was not properly noticed, and contests the assertions made in the suit. 4Kids? losses for 2010 were not limited to Q4. For the full year, the company lost $27.2 million on sales of $14.5 million. Sales for the full year declined around 58% from the previous year. Sales declines appear to be accelerating. Q4 sales were $4.8 million, a 70% decline from sales in Q4 2009. |
| Source: ICv2 |
