4Kids Entertainment files for Chapter 11 bankruptcy protection

Samantha Loveday

By Samantha Loveday

April 7th 2011 at 9:09AM
4Kids Entertainment files for Chapter 11 bankruptcy protection

However, the London-based subsidiary is not part of Chapter 11 filing.

4Kids Entertainment has filed for bankruptcy protection under Chapter 11.

The filing in the US Bankruptcy Court for the Southern District of New York also covers all of the domestic wholly-owned 4Kids subsidiaries.

However, crucially, the London office 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 firm to continue to manage operations in the ordinary way.

In addition, the bankruptcy filing automatically stays the lawsuit filed by the licensors of the Yu-Gi-Oh property, Asatsu-DK and TV Tokyo, which was made against 4Kids on March 24th, until such time as the court may order otherwise.

"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," commented Michael Goldstein, interim chairman of 4Kids Entertainment. "The company will also continue to explore its strategic alternatives, including the possible sale of the business or reorganisation as a stronger and more focused company."

Addressing the Yu-Gi-Oh lawsuit, Goldstein added: "We have made every effort to reach agreement with the licensors. When the company did not receive a positive response from the licensors to its settlement proposal, the board of directors was left with little choice but to authorise 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 favour of the company, 4Kids will pursue the full measure of damages for the significant injury the licensors have caused to the business of 4Kids."