Current Status Of MTH, Lionel Lawsuits Settlement By Erol Gurcan
My goal is to keep this report short and sweet (a novel concept for a lawyer). Here is the current status of the MTH Lionel settlement as of this morning.
MTH’s and Lionel’s lawyers were back in bankruptcy court on October 25th. Lionel CEO Jerry Calabrese and Mrs. Martin Davis were present. MTH’s Mike Wolf was not. It was not necessary for him to be. I also attended the proceedings.
Click on the link below to read on
Lionel had two motions on before the court, 1) requesting the court
approve the disclosure statement for the joint plan of reorganization
under chapter 11 of the bankruptcy code and 2)granting a sixth
extension of the exclusive period in which only Lionel may file a plan
of reorganization with the court for a period of 60 days (to December
17, 2007). MTH, which originally opposed both motions, withdrew their
opposition yesterday. After Lionel’s attorneys, Adam Harris, and then
Abbey Walsh, briefly discussed the merits of both motions, they were
quickly approved by Judge Lifland. Written orders were entered later in
the day.
More importantly for us hobbyists, both Lionel’s
attorney Adam Harris and MTH’s attorney, Alec Ostrow, informed Judge
Lifland that BOTH the trade secrets and patent infringement cases have
been settled pursuant to a confidential settlement agreement. In a
nutshell, the two model train rivals have resolved all the differences
between them.
However, the settlement process is not complete at
this point in time. Two things must occur before this can happen. One,
Lionel needs to obtain bankruptcy exit financing so it can pay off its
debts, including the settlement amount owed to MTH under their
agreement, and, paying its other creditors 100% of what is owed to
them. plus interest. Second, the court must approve Lionel’s proposed
reorganization plan. It is expected that all of this will take a few
months to complete.
Interestingly, at one point during today’s
proceedings, Judge Lifland was puzzled why the settlement amount between
the companies was not stated in the legal papers supplied to him. He
wondered why the parties were keeping it a big secret after 7 years of
litigation. Lionel’s attorney Mr. Harris stated the settlement amount
has been kept secret so conclusions based on speculation are not drawn
as to why the parties resolved their differences. Judge Lifland did not
request the settlement amount be revealed.
While there is no
guarantee the settlement agreed to by the parties will ultimately come
to fruition due to the two matters that still need to occur as outlined
above, things appear very positive at this point in time. There is now
light at the end of the tunnel. The lawyers for both parties have done
their job to secure a settlement that both parties can live with.
I
say its time to once again begin enjoying our trains and not spend so
much time worrying about and debating the legal process that has occurred or will occur. Hopefully, this will all be over in a few months
and the marketplace will be the battleground where the rival
train makers will fight it out.
Erol Gurcan
Erol B. Gurcan, an O Gauge industry legal expert, is a regular contributor to OGaugeWatch.com
Other Press Coverage of the settlement:
Toy-Train Titans Near End of Settlement, Washington Post
Lionel, MTH Near Deal in Toy-Train Rift, Associated Press via Houston Chronical
Related posts:
- MTH Settles Lawsuit with Korea Brass
- Court Approves Lionel’s Bankruptcy Plan and Settlement with MTH by Erol Gurcan
- MTH Attempts To Collect $$$ From Korea Brass by Erol Gurcan
- Lionel And MTH Making Progress In Trade Secrets Case By Erol Gurcan
- Lionel Wins Major Rulings In Bankruptcy Court
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