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May 23, 2008

Interesting Article About Lionel

Investment Dealer's Digest ran an interesting article about Lionel.  You can read it here.  The article may only be posted for a limited time so be sure to read it before IDD places it on their subscribers only site.

April 19, 2008

New Statement From Jerry Calabrese Posted On Lionel Website

Jerry Calabrese, CEO of Lionel, issued a statement by proxy at the Spring 2008 TCA National Train Museum open house on Wednesday, April 16th.  The statement is posted on Lionel's website and can be read here.

April 15, 2008

Lionel 2008 Christmas Catalog Available On-Line

Lionel's new 2008 Christmas catalog is available for viewing on-line.    Check it out here.

March 29, 2008

Court Approves Lionel's Bankruptcy Plan and Settlement with MTH by Erol Gurcan

In what should be one of their last court appearances, lawyers for MTH, Lionel and Sanda Kan (Lionel’s principal manufacturer of trains) appeared in a New York Bankruptcy Court on March 27th.

At the end of the hearing, Judge Burton Lifland approved Lionel’s confirmation plan for reorganization. The court also approved Lionel’s settlement with MTH.

Click the link below to read on

Continue reading "Court Approves Lionel's Bankruptcy Plan and Settlement with MTH by Erol Gurcan" »

March 24, 2008

Lionel Big Boy Review By Erol Gurcan & Eliot Scher

The following appeared in the February '08 edition of The Lion Roars, the magazine of the Lionel Collectors Club of America and was reprinted here with permission from the authors.

Viewpoint I
by Erol Gurcan

During the last two years, my reviews in TLR have concentrated on less expensive locomotives and train sets. In my view, the two major commercial O-gauge magazines often ignore this segment of the market; they choose instead to concentrate on more expensive trains, as some car magazines focus on exotic, expensive, and powerful automobiles. However, not everyone can afford a $1,000-or more O-scale locomotive and/or has a large layout equipped with O72 minimum radius curves necessary to run it.

Click on the link below to read on

Continue reading "Lionel Big Boy Review By Erol Gurcan & Eliot Scher" »

February 23, 2008

Watch A Short Video Demo Of Lionel's New Legacy System

Classic Toy Trains Magazine has posted a video on their website that demonstrates how to create unique horn blasts with a Legacy equipped Lionel locomotive and the Legacy CAB-2 controller.  Check out the video here.

February 22, 2008

Lionel Issues 2008 Catalog Updates & A Product Alert

LionelLionel has posted on Lionel.com a number of catalog updates for the 2008 Lionel Signature and RTR Catalogs.  Check out the list here

Also, Lionel issued a product alert with information about paint issues on the new Milwaukee Road EP-2 Bipolar locomotive.  Lionel received reports that paint was chipping between the 3 sections of the locomotive during shipping.  As a result, Lionel has established a return policy for those who own a Bipolar with paint issues.  Read the product alert here.

February 07, 2008

NJ Man In The Midst Of Recreating Lionel's Showroom Layout

The Asbury Park Press ran a story on their website about a Freehold, NJ resident that is in the process of recreating the 16' x 32' layout that was on display in Lionel's New York City showroom from 1949 to 1957.  Read the article here.  View a short video here.

February 05, 2008

Neil Young And Lionel To Buy Out Partner Of Creative Trains

Neil Young (actually his family trust) and a partner, Louis Kovach, own a company called Creative Trains.  Creative Trains and Lionel are partners in a venture called Liontech.  Liontech is the brains behind the development of TMCC.  Mr. Kovach has agreed to sell his 50% share of Creative Trains to Neil Young and Lionel for $650,000.  The Bankruptcy court has to grant permission to Lionel to make the purchase and is scheduled to hear the request on 2/21/08.  Read the entire story here.

February 01, 2008

New Lionel Catalogs Available On-Line

Lionel released 3 catalogs on-line early this morning.  The 2008 "Signature Addition" Catalog Volume 1 is filled with 200 pages of O Gauge and American Flyer goodness.  K-Line by Lionel 2008 Catalog Volume 1 features the Milwaukee Road's Olympian Hiawatha on the cover.  Lionel, taking a page from the MTH play book, introduced a new "Ready To Run" catalog featuring all their traditional lower end train sets, rolling stock and accessories.  Lots of great new products in all the catalogs.  Check them out for yourself by clicking on the links below. 

Lionel 2008 Signature Addition Catalog Volume 1
Lionel 2008 Ready To Run Catalog
K-Line by Lionel 2008 Catalog Volume 1

January 30, 2008

Lionel Execs Get Pay Raise

According to an article in Crain's Detroit Business, Lionel CEO Jerry Calabrese and VP of Marketing Mark Erickson will receive pay raises.  The raises had to be approved by the bankruptcy court hence the reason the raises being made public.  Mr. Calabrese will make $1 million per year and Mr. Erickson will make $465,000 per year. 

Both execs have been working without a new contract since 12/31/07.  According to the story, the raises more than double their salary but eliminate performance bonuses based on company performance.  The two execs also get a piece of the proceeds if Lionel is sold for more than $60 million and options to purchase a piece of Lionel if the plan for exiting bankruptcy is confirmed.  Read the entire story here.

January 24, 2008

Lionel 2008 Catalogs To Be Released Next Week

Lionel has posted a count down clock on their website counting the days, hours and minutes to the release of their 2008 catalogs.  The catalogs will be released on-line on February 1st.  Check it out on the Lionel website.

Thanks for the tip Justin.

January 13, 2008

What's New From Lionel for the 2007 Holiday Season (and 2008) by Erol Gurcan

The following article written by Erol Gurcan appeared in the December 2007 issue of The Lion Roars, a periodic publication of the Lionel Collectors Club of America.  The '07 holiday season is behind us but there is some interesting info in the article you may not have known plus there is discussion about what to expect from Lionel in 2008.

I recently had the opportunity to speak with some of Lionel’s senior executives including President and CEO Jerry Calabrese, Product Manager Matt Ashba, Chief Technology Officer John Zahornacky, and K-Line by LionelTM Product Manager Nick Ladd.  They described what the company is doing this holiday season and for 2008.  Here’s a summary of the conversations. 

Click on the link below to read on


Continue reading "What's New From Lionel for the 2007 Holiday Season (and 2008) by Erol Gurcan" »

January 11, 2008

Bankruptcy Court Grants Lionel 7th Extension: MTH Motion to Extend TRO Granted by Erol Gurcan

There was some model train litigation involving Lionel and MTH in two different courts on 1/10/08.

Firstly, in the New York City Bankruptcy Court, Lionel’s motion for a 7th extension of the exclusive period in which to file its reorganization plan, was granted by Judge Lifland. MTH’s lawyer, Alec Ostrow did not oppose the motion. The court’s order gives Lionel the exclusive right until March 31 file its plan with the court. Others including MTH may file alternative plans after that up and until May 30.

Click on the link below to read on

Continue reading "Bankruptcy Court Grants Lionel 7th Extension: MTH Motion to Extend TRO Granted by Erol Gurcan" »

January 10, 2008

MTH Attempts To Collect $$$ From Korea Brass by Erol Gurcan

In my last legal article, (written at the request of the Coil Couplers web site), I stated that in MTH’s fraudulent transfer of assets lawsuit against Korea Brass aka Hagye Trading/Model Korea Trading (MKT), the court on November 20, 2007 issued a temporary restraining order (TRO) and entered an order directing all monies paid by Lionel to Korea Brass were to be deposited into a court approved interest bearing escrow account. The practical effect of this was, Lionel, which is not a party in MTH’s lawsuit against Korea Brass, will not be able to take delivery of trains that it paid for and which were manufactured by KB, since the money is going into a court escrow account rather than directly to KB. Ultimately, we hobbyists will not be able to purchase the trains which are affected in these legal proceedings, at least for now.

Click on the link below to read on

Continue reading "MTH Attempts To Collect $$$ From Korea Brass by Erol Gurcan" »

January 07, 2008

New AP Story About Lionel and MTH

As Associated Press story about Lionel and MTH was posted on the Forbes website recently.  It's an interesting read and features a quote from Erol Gurcan.  Check it out here.

New Lionel Catalog Due Out Soon

Rumor has it that the next new Lionel catalog will be released this month.  Stay tuned.

December 28, 2007

REVIEW: Lionel's Harry Potter Hogwarts Express by Erol Gurcan

Lionel’s Harry Potter Hogwarts Express Train Set has been one of the most anticipated O-gauge train sets this year.  Moreover, the fact that it is on the cover of Lionel’s current catalog establishes its significance to the company’s success.  The set arrived at hobby and retail stores last month, just in
time for the holiday season.

Click on the link below to read on

Continue reading "REVIEW: Lionel's Harry Potter Hogwarts Express by Erol Gurcan" »

December 20, 2007

AP Report: Lionel Struggles To Exit Bankruptcy

An Associated Press report published yesterday in the Houston Chronicle states that Lionel is having difficulty securing financing for its exit from Chapter 11 bankruptcy.  The reason for the struggle is due to the credit crunch "fueled by the subprime mortgage industry."  Jerry Calebrese, CEO of Lionel is quoted in the article:

"We're not naive, an awful lot of people that would want to make a substantial equity investment in a company like ours want to have a meaningful say in what's going on and we understand that"...

"Whether that means a substantial minority or an effective majority, it doesn't matter as long as they have common vision of what we're trying to do. It matters a lot if they're short-term investors."

Based on Mr. Calabrese's comments it seems Lionel now has to turn to private equity investment as an option which could be very interesting if the investment comes from a company or individual that wants to be actively involved in the operation of the company.

Lionel is not the only company having difficulty trying to exit bankruptcy due to the credit crunch.  The article states auto-parts supplier Delphi as another example.

Read the AP article here.

December 17, 2007

Legal Explanation of Latest Coil Couplers Posts

Hrt1 Over the last two days, there have been a few posts on the Coil Couplers of America website stating that MTH has cut off Lionel’s supply of locomotives, including some of the new Legacy models, from its supplier Model Korea Trading Company (aka MKT, the company named in the Coil Couplers post of the last two days) due to the court ordered stoppage of payments by Lionel.

Click on the link below to read on

Continue reading "Legal Explanation of Latest Coil Couplers Posts" »

December 14, 2007

It's A Wonderful Life Train

Iawl How many times have you watched It's A Wonderful Life this Christmas season?  If your answer is more times than you care to admit, Lionel and Lands' End have the perfect train set for you.  The It's A Wonderful Life Train from Lionel is a special run for a Lands' End promotion celebrating the famous Christmas film.  The 2 boxcars and caboose included in the starter set are adorned with images from the movie.  The set lists for $299.00.  View the set at LandsEnd.com here.  Read the PRNewswire story about the train set and Lands' End promotion here.

December 06, 2007

Lionel's Legacy System Finally Shipping?

According to a post by "Clyde Coil" on the Hi Rail Times blog, Lionel is very close if not already shipping the Legacy system to owners of the Legacy equipped Big Boy.  Here's an excerpt from Clyde's post:

Yer all gonna have yer Legacy sets real soon. LIONEL will be reborn in 08!!!! According to our sources inside LIONEL, some sets are already "in house" but they're waiting for the rest before they let 'em go to the Big Boy owners.....

The rest of the Legacy sets are gonna be in yer stores before Christmas because they're already on their way.

Good news for Lionel and those that have been patiently waiting for Lionel's new control system.

November 19, 2007

Lionel at Target

Targetlionel1 I was in Target this weekend and noticed 3 Lionel trains sets prominently displayed on an end cap in the toy department.  The 2 O Gauge "Lionel Lines Super Sets, 1 steam and 1 diesel, were $199.00 each and branded with "Only at Target" on the boxes.  There was also a battery operated Polar Express G Scale set for $129.99.   "Super Set TrackPacks", a set of O Gauge track pieces and a Polar Express G Scale track pack are being sold for $29.99.    

Target.com is also selling other Lionel sets including the O Gauge Polar Express set for $289.99 and the G Gauge Holiday Express set for $279.99.  Last year's "Only at Target" Lionel set is also still available for $249.99.  Target is offering free shipping on all Lionel sets.   

I did notice that the Target web site's description of the Lionel diesel set is a bit different than what was offered in the store.  The following is from the website:

Click on the link below to read on

Continue reading "Lionel at Target" »

November 05, 2007

Post War Photo Thread On Model Train Journal Forum

Frank53 started an interesting thread over at the Model Train Journal forum that is worth a look.  Frank53 is asking everyone to post a photo of a post war Lionel item (items produced between 1945 & 1969) along with the Lionel item number.  You can post photos of as many items as you like as long as they have not been posted yet.  The thread started on 10/30 and has 22 pages of photos and counting.  The thread is becoming a great free photo reference of post war Lionel items (wiki anyone?).  Use the forum's search function to search by item number to see if a photo of your favorite post war item has been posted yet.

View the thread here.

Thanks for the tip Frank.   

November 01, 2007

Review: Two New Conventional Lionel Locomotives by Erol Gurcan

Below is a review of a couple of conventional Lionel locomotives, the Baby Trainmaster and the Junior Mikado, that first appeared in the October '07 issue of the LCCA magazine "The Lion Roars."  Articles like this is one of the many benefits in being a member of the LCCA.  Enjoy.  Erol

I have reviewed two new, inexpensive conventional locomotives – one diesel and one steam.

I. The Baby Trainmaster

In its 2007 Volume 1 Catalog (page 85), Lionel® introduced an all-new locomotive, the Fairbanks Morse H16-44 in New York Central décor, commonly known as the Baby Trainmaster (6-18385). The loco arrived in stores in June 2007. It is also shown in the current 2007 Volume 2 Catalog (page 95).

Click on the link below to read on

Continue reading "Review: Two New Conventional Lionel Locomotives by Erol Gurcan" »

October 27, 2007

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

Continue reading "Current Status Of MTH, Lionel Lawsuits Settlement By Erol Gurcan" »

October 20, 2007

AP Story About Lionel Bankruptcy

The Associated Press ran a story this week about the Lionel Bankruptcy hearing.  Read the story here.

October 15, 2007

Lionel And MTH Making Progress In Trade Secrets Case By Erol Gurcan

It's been about 2 months since I have written anything substantive about the Lionel MTH Trade secrets case or about the status of Lionel's bankruptcy. That's because there was little going on in the proceedings during this period of time. As you may recall, on August 13, MTH filed an appeal concerning Judge Lifland's August 2 rulings in favor of Lionel. On August 2, Judge Lifland ruled that any future trial (the Bankruptcy Code 502(c) damages estimation hearing) in the trade secrets case would be held before him, instead of in the Federal District Court in Detroit Michigan, and granted a fifth extension of time to Lionel to file an exclusive bankruptcy plan with the court. MTH had opposed Lionel's motion for exclusivity and proposed three alternative plans which were rebuffed by Judge Lifland.

Click on the link below to read on

Continue reading "Lionel And MTH Making Progress In Trade Secrets Case By Erol Gurcan" »

September 25, 2007

Lionel's Hogwarts Express

If you're kicking around the idea of buying a Lionel Hogwarts Express set, check out these great photos from OGR Magazine Forum participant Rail_Spike here.  I'm not into Harry Potter or European trains but this set is nice.

September 24, 2007

Lionel's Jerry Calebrese Speaking In Montclair, NJ

Lionel's CEO, Jerry Calebrese, has scheduled a speaking engagement with the Adult School of Montclair, NJ on Tuesday, November 6. There is a $15 registration fee.  See the Lionel website for more details. 

August 27, 2007

Lionel Proactively Testing Products For Lead Paint

An article in Crain's Detroit Business covering a Michigan based product testing company, NSF International Inc., mentions Lionel as one of NSF's customers.  Lionel's CEO, Jerry Calabrese, indicates in the article that Lionel is taking a proactive stance and testing it's warehoused inventory for lead tainted paint even though the company hasn't received complaints.  Tests have "not found cause for concern" according to the article.  This is good move by Lionel and I'd be surprised if other O Gauge train manufacturers haven't taken similar steps.  Read the Crain's article here.

If you ever wondered why lead was ever used in paint, check out this Chemistry World article.

August 04, 2007

Lionel Wins Major Rulings In Bankruptcy Court

Lionel won two major and important rulings from Judge Lifland in the bankruptcy court this morning. The more important of these was the decision that the future trial (in others words,the Bankruptcy Code section 502c "damages estimation hearing') in the trade secrets case would be tried before the judge, instead of a jury trial in the Federal District Court in Detroit, Michigan. The second important ruling was Lionel was granted a fifth extension of time, giving it the exclusive right to file its bankruptcy reorganization plan.

Click on the link below to read on

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August 01, 2007

Lionel and K-Line by Lionel 2007 Volume 2 Catalogs Available On-Line

The 2007 Volume 2 catalogs for Lionel and K-Line by Lionel are now available at Lionel.com.

July 25, 2007

Baltimore Sun Runs Article About MTH vs. Lionel

The Baltimore Sun ran an article about the MTH vs. Lionel case.  The article contains quotes from Lionel's CEO, Jerry Calabrese, the lead attorney for MTH and Tom McComas of TM Books & Video.  Read it here.

July 24, 2007

Lionel 2007 Volume 2 Catalog Available on 8/1/07

According to Lionel's website, the countdown timer in the upper right corner announces that the 2007 Volume 2 Catalog will be available on 8/1/07.

July 20, 2007

Best Friend of Charleston

Lionel is offering a replica of the "Best Friend of Charleston" steam locomotive as a special "on-line" exclusive.  The steam locomotive was built in 1830 for the South Carolina Canal and Railroad company.  Lionel is offering the locomotive with a tender and one passenger car for $349.99.  An add-on passenger car is also available for $64.99.  Learn more about the real Best Friend of Charleston here.  View Lionel's version here.

July 18, 2007

Lenny Dean, Lionel Employee For 60 Years, Passes At Age 81

Lenny Dean was an employee of Lionel for nearly 60 years.  He played an instrumental role in Lionel's service department for many years and helped Lionel move production from New Jersey to Michigan after General Mills purchased the rights to make and sell Lionel trains.   Mr. Dean's years of service, his knowledge of Lionel trains and his relationship with collectors made him a very popular figure within the O Gauge community.   Angela Trotta Thomas featured Mr. Dean in one of her works to celebrate his 60 years of service with Lionel.  Check it out here.  Read the letter sent to dealers by Lionel's president Gary L. Moreau announcing Mr. Dean's retirement here.  Classic Toy Trains magazine ran an article announcing Mr. Dean's death here and Mr. Dean's obituary can be found here.

UPDATE:  Sources tell me that the wake was very well attended.  Numerous floral arrangements including one in the shape of Lionel's Circle L logo.  On display was the Lionel Lenny Dean boxcar and Angela Trotta Thomas' LIFE cover of Lenny along with letters to/about Mr. Dean from Lionel.  Lionel also posted a tribute to Mr. Dean on their website here.

July 14, 2007

MTH Lionel Update: Parties In Settlement Talks by Erol Gurcan

Attorneys for both MTH and Lionel were back in a New York Bankruptcy Court on July 10th. Both MTH's Mike Wolf and Lionel's Jerry Calabrese were present. I was present for part of the day.

On the docket were several items, including Lionel's motions seeking court approval to pay its lawyers and accountants etc. the fees earned between January 1, 2007 to April 30, 2007. These motions were unopposed. Judge Lifland approved all of them and entered an order to that effect.

Click on the link below to read on

Continue reading "MTH Lionel Update: Parties In Settlement Talks by Erol Gurcan" »

July 10, 2007

MTH Proposes Alternative Reorganization Plans To Bankruptcy Court by Erol Gurcan

In my last article, I summarized that Lionel and MTH were in court on June 27th, with Lionel’s attorneys were attempting to convince Bankruptcy Judge Burton Lifland that he should try the trade secrets and separate $17.5 million dollar patent infringement case to expedite their exit from bankruptcy. MTH’s attorneys had cross-moved to send the trade secrets case back for trial to the Federal District Court in Michigan, the court where a jury awarded them $40.7 million dollars in June 2004.

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Continue reading "MTH Proposes Alternative Reorganization Plans To Bankruptcy Court by Erol Gurcan" »

June 28, 2007

Bankruptcy Court Judge Begins Hearing Motions on Future Trial Venue by Erol Gurcan

Lionel and MTH’s attorneys were back in a New York bankruptcy court on June 27th before Judge Burton Lifland. Interestingly, the courtroom was crowded since a lot was potentially riding on the hearing. Lionel’s CEO and President Jerry Calabrese, and Chief Financial Officer Scott Turkington were present in court. They were scheduled to testify and later did. More about that later. Mrs. Martin Davis was present as well. MTH’s Mike Wolf was not.

Click on the link below to read on

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June 19, 2007

Lionel and MTH Motions Adjourned to June 27:Lionel Looses $1.25 million in May by Erol Gurcan

In my last article, I stated that Lionel's motion for the damages estimation hearing (which would actually be a trial on this issues of potential liability and damages in the trade secrets case) and MTH's cross-motion to have the trial take place in the Federal District Court in Michigan (the court where the jury awarded MTH $40.7 million dollars on June 7, 2004) were scheduled to be heard in the New York Bankruptcy Court today. However, both motions were adjourned to June 27, 2007. Thus, nothing occurred in court today on this matter.

Click on the link below to read on

Continue reading "Lionel and MTH Motions Adjourned to June 27:Lionel Looses $1.25 million in May by Erol Gurcan" »

June 11, 2007

MTH Lionel Trade Secrets Case: MTH Withdraws Supreme Court Appeal. What's Next? by Erol Gurcan

MTH has abandoned its plans to seek redress in the United States Supreme Court concerning the trade secrets case. On May 30, 2007, MTH filed a motion (an application for a court order) with the Sixth Circuit Court of Appeals to vacate the 90 day stay that was previously granted by it so they could file a write of certiorari with the US Supreme Court. The Sixth Circuit has not decided the motion yet, but there is no reason to think that they will not grant it. Certainly, Lionel is not going to oppose it, and it will make less work for the US Supreme Court.

So the question becomes, Where do we go from here, or what happens next?

Click on the link below to read on

Continue reading "MTH Lionel Trade Secrets Case: MTH Withdraws Supreme Court Appeal. What's Next? by Erol Gurcan" »

June 05, 2007

K-Line by Lionel Circus Themed Items Brochure Released

K-Line by Lionel is producing a line of Ringling Bros. and Barnum & Bailey themed items.  Check out the on-line brochure here.

May 30, 2007

A Review Of Lionel's Bankruptcy Reorganization Plan by Erol Gurcan

Lionel filed its bankruptcy reorganization plan with the court on May 21. This was an important and necessary step in moving the trade secrets and patent infringement litigation forward, and in beginning the process to exit from bankruptcy.

I recently reviewed Lionel’s bankruptcy reorganization plan filed with the court. It contains some surprising and interesting legal, financial and hobby related information. Is Lionel opening a new office, now much does Lionel spend a year on new tooling, how much does it earn a year in royalties based on its trademark, and what are MTH’s annual sales based on Lionel’s estimates? If you would like to know the answers to these questions and more, then read on. The information for this post was obtained from Lionel’s reorganization plan filed with the bankruptcy court.

Continue reading "A Review Of Lionel's Bankruptcy Reorganization Plan by Erol Gurcan" »

May 25, 2007

New Press Releases Posted on Lionel's Website

LionelI haven't visited Lionel's website over the past few days and of course they posted 2 press releases during that time.  The first has to do with the closing of Davis Trains in Ohio.   Apparently Davis was a well know repair shop for K-Line Collector Club products.  Lionel announced that Brasseur Electric Trains in Saginaw, Michigan will now service those products.  Read the press release here.

Jerry Calabrese also released a statement about their recently redesigned trucks on Lionel diesel engines.  One of the undesired by-products of the redesign was an increase in the gap between the trucks and the body of the locomotive.  It was a small but noticeable increased that collectors complained about so Lionel is redesigning the trucks to decrease the gap on future Legacy equipped diesel locomotives.  Read about the redesign here.

Hat tip to Erol for informing me about the press releases.

May 24, 2007

Lionel Files Reorganization Plan: Parties Unable To Settle Legal Disputes by Erol Gurcan

Lionel and MTH's attorneys were back in a New York bankruptcy court 5/22/07. Lionel CEO Jerry Calabrese was present in court. MTH's Mike Wolf was not.

Lionel's lawyer, Adam Harris quickly informed Judge Lifland that Lionel filed their bankruptcy reorganization plan with the court yesterday. Among the items in the plan is payment in full of all unsecured claims with interest. The plan is necessary in order for Lionel to begin their exit from bankruptcy. Lionel has been in bankruptcy since November 15, 2004, a period of over 2 1/2
years.

Click on the link below to read on

Continue reading "Lionel Files Reorganization Plan: Parties Unable To Settle Legal Disputes by Erol Gurcan" »

May 02, 2007

MTH Lionel trade secrets case: Headed to US Supreme Court? by Erol Gurcan

As you may recall, on April 19, 2007, the Sixth Circuit Court of Appeals denied MTH's petition for a rehearing of its December 14, 2006 decision in the trade secrets case. That earlier decision vacated the jury's $40.8 million dollar judgment against Lionel and codefendant Korea Brass, and remanded the case to the District Court in Detroit, Michigan for another trial. Bankruptcy Judge Burton Lifland in New York has stated in the past he will hold a damages estimation hearing in the trade secrets case rather than let another trial take place in Detroit. The two model train rivals were recently holding mediation talks in New York in both the trade secrets case and patent infringement case. The next court date in the bankruptcy court is May 22.

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Continue reading "MTH Lionel trade secrets case: Headed to US Supreme Court? by Erol Gurcan" »

April 27, 2007

Lionel 2007 Christmas Catalog Available On-line

LionelLionel has released its 2007 Christmas catalog on-line.  Highlights include the new G Scale version of the Polar Express, an O Gauge Polar Express Steam Train Sounds tender and new Holiday 2-8-2 Mikados with Railsounds available in red or green.  The back cover includes a teaser for the new Harry Potter Hogwarts Express.  View the new catalog here.

April 24, 2007

Appeal's Court Denies MTH's Petition For Rehearing by Erol Gurcan

On April 19, The Sixth Circuit Court of Appeals denied MTH's petition for a rehearing of its December 14, 2006 decision. That earlier decision vacated the jury's $40.8 million verdict in favor of MTH in the trade secrets case, and remanded it to the Eastern District of Michigan for another trial. While the above news is certainly important, it is not unexpected. I stated in a post in January that MTH's chances of prevailing on the petition were small. Additionally, MTH's Attorney Alec Ostrow stated at least twice at the bankruptpcy court conference on January 9, 2007 that is was unlikely MTH would prevail on the petition.

The more important question now becomes, what is going to happen now that the appeals process is over. Where do we go from here?

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April 17, 2007

Lionel Financials - March '07 by Erol Gurcan

Lionel's monthly operating report for March 2007, filed with the bankruptcy court on April 13, 2007, showed net earnings, or profit of $189,000. While the amount itself is small, it is a profit nonetheless, which is significant for this time of year. During the calendar year 2006, Lionel did not post a monthly profit during the first seven months of that year. Additionally, in March 2006, Lionel showed a loss of $349,000 and in March 2005, a loss of $534,000.

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April 12, 2007

Associated Press Article About Lionel's Bankruptcy

The Detroit news is running an Associated Press article concerning Lionel's bankruptcy.  Read it here.

UPDATE:  Check out Erol Gurcan's report here.

April 10, 2007

Lionel's TMCC II Legacy in the hands of a master modeler

Some of you may not be familiar with Norm Charbonneau.   Norm is what I and many others would consider a master O Gauge modeler.  His layout is a work of art and has graced the cover of O Scale magazine late last year (a rarity for a 3 rail layout).  Norm also maintains a blog for the purposes of chronicling progress made on his layout and for sharing his modeling knowledge.  The subject of his latest post is Lionel's TMCC II Legacy train control system.  Norm had the unique opportunity to put Lionel's new train control system and a new TMCC II equipped Big Boy on his layout for a test session.  Read about his evening with Legacy here.

April 04, 2007

Lionel's Super O Track

To model railroad purists the presence of the unrealistic third rail running down the center of O Gauge track is a major drawback to O Gauge model railroading.  Even with today's realistic looking modern offerings from Atlas, Lionel, MTH, Gargraves and Ross Custom Switches, that third rail is hard to hide.  Back in the heyday of O Gauge railroading, modelers were basically stuck with using the unrealistic looking three rail tinplate track Lionel was manufacturing at the time.  Modelers came up with ways to enhance the look of tinplate track by adding extra home made railroad ties and weathering the rails but the third rail still stuck out like a sore thumb.  O Gauge enthusiasts didn't seem to mind but those looking to create a more realistic model railroad layout opted for 2 rail O Scale, S Gauge or HO scale.  Despite its unrealistic appearance, running electricity through a third rail did simplify the control of automatic accessories and eliminated the need for special wiring on layouts with reversing loops. 

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Continue reading "Lionel's Super O Track" »

March 14, 2007

Lionel's new Legacy train control system delayed. Why all the fuss?

There's been a lot of chatter in the O Gauge world about Lionel's delay in delivering the new TMCCII Legacy train control system.  The first sign of a delay surfaced back in October of '06 when it was rumored that Lionel was supposed to demo the new system at the Fall '06 York Train meet but didn't.  Rumors hinted that the meet organizers wouldn't let Lionel demo the system at the meet.  Turns out the real reason was that the system wasn't quite ready.  Lionel representatives presenting at the TCA Museum's open house addressed the rumors by announcing the system wasn't ready and that Lionel was doing all they could to get the system out the door by the planned delivery date of the end of 2006.  You can listen to Lionel's statement at the bottom of the post located here.

Recently, speculation as to why the system was delayed started surfacing in the O Gauge forums.  O Gauge Railroading Magazine contacted Lionel about the delay and received a response from Neil Young that they posted here.  The response included the following excerpt.

Click on the link below to read on

Continue reading "Lionel's new Legacy train control system delayed. Why all the fuss?" »

February 27, 2007

Lionel's Jerry Calabrese Interviewed by The Star Ledger (NJ)

The Star Ledger, a Northern New Jersey newspaper, ran a story about Lionel's CEO, Jerry Calabrese.  The story's focus is on how the New Jersey native is turning around Lionel.  The most interesting news gleaned from the article is that Lionel is in negotiations with the owners of the Prudential Center in Newark, NJ with hopes of opening a Lionel Museum or exhibit there.  Rumors had been circulating around the O Gauge community that Lionel was looking to establish a presence in New Jersey.  Maybe the museum is that presence.  There were a few other interesting quotes from Calabrese in the article.

Click on the link below to read on

Continue reading "Lionel's Jerry Calabrese Interviewed by The Star Ledger (NJ)" »

February 23, 2007

Court Grants Lionel's Motion; Mediation Begins by Erol Gurcan

Lionel and MTH's attorneys were back in bankruptcy court the morning of February 22nd for both a motion and status conference. Lionel CEO/President Jerry Calabrese and MTH owner Mike Wolf were not in court today. It was not necessary for them to be present. Both attended the last bankruptcy court conference on January 9 when both sides agreed to mediation. I attended today's court proceedings.

Click on the link below to read on

Continue reading "Court Grants Lionel's Motion; Mediation Begins by Erol Gurcan" »

February 21, 2007

Lionel's Acela, a year later

Last year around this time Lionel released what is arguably the most technologically advanced O Gauge model train, the Amtrak Acela.  Lionel successfully reproduced every little detail of the real Acela right down to the operating tilting mechanisms on each car.   It's an absolutely beautiful piece.  With the release of the Acela, Lionel, the company that made O Gauge popular in the mid 20th century, made a statement that it can produce a train packed with the latest 21st century technology and gadgetry.  Only 2000 sets of Acela were made by Lionel each with an MSRP of $1,999.99.  With a limited production I'm sure some collectors speculated that Lionel's Acela would increase in value over time.  It's may be too soon to tell if the speculators were right but an examination of recent Acela listings on eBay gives an indication of what has happened to the price over the past year.

Click on the link below to read on

Continue reading "Lionel's Acela, a year later" »

February 14, 2007

Lionel Files Request to Extend Deadline for Chapter 11 Reorg Plan by Erol Gurcan

On February 9, 2007, Lionel filed a motion (an application for a court order) with the bankruptcy court seeking an extension to file a chapter 11 reorganization plan. The motion seeks an exclusive 75 day period in which it be allowed a to file a plan after the appeals court either denies, or issues a final decision regarding MTH's petition for a rehearing of the trade secrets case appeal. On December 14, 2006, the Sixth Circuit Court of Appeals reversed the trial court jury's $40.7 million dollar verdict ($38.6 million directly against Lionel) rendered in June 2004, and remanded the case to the trial court for another trial.

Click on the link below to read on

Continue reading "Lionel Files Request to Extend Deadline for Chapter 11 Reorg Plan by Erol Gurcan" »

February 13, 2007

Lionel Seeks Extension for Chapter 11 Plan

Lionel has asked the bankruptcy court to extend the deadline for filing a reorganinzaion plan.  Read the story here.

February 06, 2007

Lionel and MTH Sign Agreement for Mediation by Erol Gurcan

On January 30, 2007, the attorneys for both Lionel and MTH signed a stipulation (legalese for agreement) agreeing to mediate MTH's separate trade secrets and patent infringement claims against Lionel. Bankruptcy Judge Burton Lifland "so-ordered" (approved) the stipulation on February 1, 2007. When the parties were last in the bankruptcy court on January 9, 2007, Lionel's attorney suggested mediation, MTH's lawyer agreed, and Judge Lifland directed the parties to do it.

Click on the link below to read on

Continue reading "Lionel and MTH Sign Agreement for Mediation by Erol Gurcan" »

February 03, 2007

Lionel and K-Line by Lionel 2007 Volume 1 catalog corrections

Lionel has released a list of corrections for their 2007 Volume 1 Lionel and K-Line by Lionel catalogs. 

Click on the link below to read on

Continue reading "Lionel and K-Line by Lionel 2007 Volume 1 catalog corrections" »

New K-Line by Lionel Website

I'm not sure when this happened but Lionel launched a new website dedicated to their K-Line by Lionel product line.  The site probably launched in conjunction with the inaugural K-Line by Lionel 2007 Volume 1 catalog but I missed it.   Check out the site here.  Hey Lionel, you may want to redirect traffic heading for www.k-linetrains.com to the new site.

January 23, 2007

Lionel and K-Line by Lionel 2007 Volume 1 Catalogs Available On-Line

The Lionel 2007 Volume 1 and K-Line by Lionel 2007 Volume 1 catalogs are now available on-line.  Lionel's catalog includes a new 246E tinplate set and a beautiful Southern Pacific GS-4 (MSRP $1,199).  The K-Line catalog is interesting, lots of SuperStreets and a few steam locomotives including K-Line's rendition of the Southern Pacific GS-4 (MSRP $599.99).

January 22, 2007

Appeals Court Orders Lionel To Respond To MTH's Petition by Erol Gurcan

On January 18, 2007, the Sixth Circuit Court of Appeals posted on its PACER web site that a letter was sent to Lionel's lawyer, Walter Dellinger, notifying him to respond MTH's petition (filed with the court on December 28, 2006)for an en banc hearing. Lionel's response is due by February 1, 2007. An en banc hearing means that the full court will consider it, which could be a group of anywhere from 15-20 judges (in other words all the judges of the court), instead of the 3 that orginally heard the appeal on June 7, 2006.

Click on the link below to read on

Continue reading "Appeals Court Orders Lionel To Respond To MTH's Petition by Erol Gurcan" »

January 18, 2007

Lionel's Gross Sales In 2006 Top $62 Million by Erol Gurcan

On January 16, 2007, Lionel filed its monthly operating report with the bankruptcy court. It is required to file a monthly operating report since it is in bankruptcy. The report was affirmed to by its Chief Financial Officer, Scott Turkington. December’s numbers were obtained directly from its profit and loss summary filed with court.

The interesting thing about December’s numbers is that it allows us to see how Lionel did as a company for the calendar year 2006, rather than just a monthly snapshot, which I have reported on in the past.

Click on the link below to read on

Continue reading "Lionel's Gross Sales In 2006 Top $62 Million by Erol Gurcan" »

January 11, 2007

Lionel Catalog News

LionelLionel will be releasing it's new 2007 Volume 1 catalog at midnight on 1/23/07.  The interesting news is that Lionel will also be releasing a separate K-Line by Lionel 2007 Volume 1 catalog as well.  Lionel posted a "countdown clock" on their website recently which shows the cover of both catalogs.  Lionel announced at the Fall 2006 TCA Open House (reported by OGaugeWatch here) that K-Line's Superstreets line of products will be produced in 2007.  Superstreets adorns the cover of the 2007 Volume 1 K-Line by Lionel catalog.  I assume the countdown clock is an indication that both catalogs will be  immediately available on-line at midnight on 1/23.

Visit www.lionel.com for more details.

January 10, 2007

MTH and Lionel Appear in Bankruptcy Court by Erol Gurcan

January 9, 2006-For the first time since December 14, 2006, when an appeals court vacated MTH’s $40.7 million dollar trade secrets verdict against Lionel, and remanded the case for another trial, attorneys for the two rival model train makers appeared in the Bankruptcy Court for the Southern District of New York today.

Click on the link below to read on

Continue reading "MTH and Lionel Appear in Bankruptcy Court by Erol Gurcan" »

January 04, 2007

MTH Files Petition For Rehearing with Appeals Court by Erol Gurcan

Those of us following the legal proceedings in the MTH Lionel trade secrets case know that on December 14, 2006, a three judge panel of the Sixth Circuit Court of Appeals unanimously reversed the district court jury’s $40.7 million dollar verdict, and granted Lionel’s motion for a new trial, and remanded the case to the district court for that purpose.

Click on the link below to read on

Continue reading "MTH Files Petition For Rehearing with Appeals Court by Erol Gurcan" »

January 03, 2007

Lionel's Jerry Calabrese Releases Year End Message

LionelLionel's CEO, Jerry Calabrese, released a year end message yesterday.  Among other things, the message includes promises of an expanded K-Line catalog and mentions a TMCC Legacy release of early 2007.

Read the entire message here.

 

Related posts:
A Conversation with Lionel CEO and President Jerry Calabrese by Erol Gurcan
Lionel's Jerry Calabrese Interviewed by New York Sun

December 21, 2006

A Conversation with Lionel CEO and President Jerry Calabrese by Erol Gurcan

Photo1 The Past Is Prologue
Train hobbyists familiar with the history of Lionel® know that when New Yorker Joshua Lionel Cowen entered the electric train business more than 100 years ago, he setup shop in lower Manhattan. During Lionel’s golden years following World War II, the company had an office and display showroom at 15 East 26th Street in mid-town Manhattan. After General Mills bought Lionel in 1969, the company moved to Chesterfield, Michigan.  The connection to New York City all but disappeared.

Click on the link below to read on

Continue reading "A Conversation with Lionel CEO and President Jerry Calabrese by Erol Gurcan" »

December 19, 2006

Lionel Earns $2.8 Million Profit in November 2006 by Erol Gurcan

On December 14, 2006, Lionel filed its monthly operating report for November 2006, with the bankruptcy court. For the month of November, Lionel posted a profit, or net income of $2,868,000. Its monthly disbursements were $6,818,000. The report was affirmed to by its Chief  Financial officer, Scott Turkington. Lionel is required to file a monthly operating report since it is in bankruptcy. November’s numbers were obtained directly from its profit and loss summary filed with the court.

Click on the link below to read on

Continue reading "Lionel Earns $2.8 Million Profit in November 2006 by Erol Gurcan" »

December 14, 2006

More Press Coverage of MTH v Lionel Court Ruling

Lionel Awarded New Trial In Model Trains Trade Secrets Case, Associated Press
Appeals Court Sends Lionel-MTH Back To Square One, Classic Toy Trains

UPDATE:
Lionel's Press Release

Related Posts
Summary of Appeals Court Ruling in MTH v Lionel Trade Secrets Case

Summary of Appeals Court Ruling in MTH v Lionel Trade Secrets Case by Erol Gurcan

On June 7, 2004, the jury in the trade secrets case ruled in favor of MTH and awarded them $40.7 million dollars as follows; $11,978,887 for PAST lost profits, $13,794,518 for FUTURE lost profits, and $12,834,820 against Lionel, and $2,167,440, against codefendants Korea Brass and Yoo Chan Yang for UNJUST ENRICHMENT. Lionel filed for bankruptcy in November, 2004, and filed a notice of appeal, in January 2005. Korea Brass did not appeal.

In a nutshell, overall, today's appeals court's decision is favorable to Lionel, and not to MTH.

Click on the link below to read on

Continue reading "Summary of Appeals Court Ruling in MTH v Lionel Trade Secrets Case by Erol Gurcan" »

Court Rules on Lionel's Appeal

Just heard from my friend Erol Gurcan and he stated that the court (Sixth Circuit Court of Appeals in Cincinnati Ohio) has ruled on Lionel's appeal of the $40.7 million dollar judgment obtained against it by MTH.  Erol's reading through the court documents now and expects to have a summary of the decision out soon.  Stay tuned.  Thanks for the tip Erol!

   

Related Posts
A Status On Lionel's Bankruptcy; How Long Will It Last? by Erol Gurcan (7/21/06)

December 08, 2006

A Good Article About Lionel

AmericanHeritage.com posted a very nice article about Lionel.  Check it out here.

November 28, 2006

Old Lionel Videos

I saw a post on Model Train Journal concerning old Lionel Train videos that I thought was worth repeating here.  Click on the link below to view a number of old Lionel train videos from Google Video and tvdays.com.


Continue reading "Old Lionel Videos" »

November 13, 2006

Lionel's Hiawatha

Lionel 2006 Catalog Vol 1 Lionel's new Milwaukee Road Hiawatha has been the subject of a couple of very informative threads appearing on the O Gauge RailRoading forum and the Model Train Journal forum.  Lionel's latest version of the Hiawatha was introduced in their 2006 Volume 1 catalog and is now starting to be delivered.  I got a good look at the stream lined locomotive and matching passenger cars at the TCA's fall York, PA meet and was very impressed with the detail.  The end of the observation car is a work of art but unfortunately there are no pictures of it in the threads. Check out the forum threads below:

Lionel's New Hiawatha - Model Train Journal.com
Lionel Hiawatha is here - O Gauge Railroading

Click on the link below for links to photos of the real Hiawatha

Continue reading "Lionel's Hiawatha" »

November 10, 2006

Target and Lionel

If you haven't heard, Target will be selling a Lionel starter set this year.  As of last weekend, the set hasn't hit the shelves of my local Target yet.  If you have to have this set and can't wait for it to show up in your local Target you can order it on-line from Target with free shipping.  One catch, the free shipping expires on 11/11/06 so you better hurry.  Check out Target's website for details.

UPDATE 11/14/06:  Free shipping extended to 11/18/06.   Also, you can get and additional 10% off using the following link to access Target.com:  www.target.com.  You won't see the savings until you get to the page where you choose the method of payment at checkout.  [via Gizmodo and Dealhack]

November 09, 2006

Lionel A Hall Of Famer

Lionel was inducted into the National Toy Hall of Fame today.  Lionel Trains along with the Easy Bake Oven were the latest inductees into the Strong National Museum of Play Hall of Fame located in Rochester, NY.  Both became the first electric toys to be inducted and join 35 other toys that include such classics as Candy Land, the bicycle, Tinker Toys and Play-Doh.

Read the complete story at Playthings.com.

November 04, 2006

Clearing Up The TMCC2 "York Controversy"

There have been a few interesting posts recently over at the Hi-Rail Times concerning Lionel's legal issues with MTH.  Erol Gurcan (aka "LocoLawyer"), a regular contributor and friend here at OGaugeWatch, recently addressed one of those Hi-Rail Times posts through an article he wrote that I posted the other day.  Erol's article provoked a response from none other then "Clyde Coil" himself.  I laughed my you know what off when Clyde called Erol a "hog faced caboose chaser"!  Great stuff.

In a post entitled "CCA Seeks Loco-Lawyer", "Clyde" writes a seemingly sarcastic post asking LocoLawyer to get to the bottom of why Lionel didn't demo TMCC2 Legacy at the Fall '06 TCA train meet in York, PA.  There is some controversy as to why and Clyde's stance is that the TCA wouldn't "sanction" a demo to be held at York.  Well, Lionel addressed this controversy during the TCA Museum's Fall '06 open house.

UPDATE 11/4/06:  The folks at Hi-Rail Times pulled both posts mentioned above.

Click on the link below to read on

Continue reading "Clearing Up The TMCC2 "York Controversy"" »

November 03, 2006

Lionel's Jerry Calabrese Interviewed by New York Sun

LionelJerry Calabrese, Lionel's CEO, and Lionel Trains are the subject of an interesting article published in the NY Sun today.  Mr. Calabrese was interviewed by the Sun and discusses Lionel's return to New York City and how he wants to "re-establish what Lionel's tradition was for its first 65 years and stake our flag back in the world of pop culture".  The article also mentions that Lionel has signed a licensing deal with the makers of the Harry Potter movies.

Read the New York Sun article here.

November 02, 2006

Coil Couplers Continues To Distort The Legal Facts by Erol Gurcan

November 1, 2006-O gauge hobbyists who regularly read the Coil Couplers Of America web site, know it is  pro-Lionel, and funded by rock singer Neil Young, who is also a 20% owner of the company. The web site is also independent of Lionel LLC and does not speak for them on an official level, but does occasionally cite un-named sources within the company for its information.   

However, the Hi-Rail Times section of the Coil Couplers web site continues to distort the truth regarding the legal proceedings between MTH and Lionel, thereby possibly confusing O gauge hobbyists interested in the various legal proceedings. It has once again become necessary to set the record straight regarding their latest post.

UPDATE 11/3 - Hi-Rail Times responds to Erol's article.

Click on the link below to read on

Continue reading "Coil Couplers Continues To Distort The Legal Facts by Erol Gurcan" »

November 01, 2006

Lionel Announces UP Heritage Collection

Yesterday, Lionel announced in a press release that they will produce an "officially licensed" version of Union Pacific's Heritage Locomotive series.  The series consists of 6 locomotives decorated in paint schemes from the fallen flag railroads Union Pacific has acquired over the years.  Lionel also announced a Lionel/Union Pacific joint release of a 7th paint scheme sometime in 2008. 

Click on the link below to read on

Continue reading "Lionel Announces UP Heritage Collection" »

October 19, 2006

TCA Fall '06 Open House - Recap Part 3

Atlas O and Lionel had plenty to announce at the open house.  First up was Atlas O's Jim Weaver.  He ran down all the interesting and new offerings for each of Atlas O's three product lines.

Atlas O Master Series:

  • Atlas O's first steam loco will be an USRA 0-6-0 switcher.  See my post here for more info.  Initial road names will be Pennsylvania, Burlington, Jersey Central, Union Pacific and unlettered.  Locomotives will be detailed specific to each road name.  Shipping is scheduled for April '07.

Click on the link below to read on

Continue reading "TCA Fall '06 Open House - Recap Part 3" »

October 08, 2006

Lionel's TMCC2 vs MTH's DCS

D. Railer over at the Hi-Rail Times blog is maintaining a list of the differences between Lionel's TMCC2 and MTH's DCS train control systems.  He is also asking for both DCS and TMCC2 users to help add to the list.  Check out the list here.  (Ed. Note:  Hi-Rail Times & the Coil Couplers site is pro Lionel so keep that in mind when reading the comparisions and remarks.)

Related Posts
Neil Young and Lionel

September 17, 2006

Jerry Calabrese Comments on Union Pacific Trademark Infringement Settlement and Lionel’s Recent Sales By Erol Gurcan

September 16, 2006-On September 13, 2006, I wrote an article stating Lionel had settled the trademark infringement lawsuit brought against it by Union Pacific and had entered into a licensing agreement with them. The next day, Lionel CEO Jerry Calabrese posted a statement on its web site confirming the licensing agreement and thanking UP for working with Lionel to resolve the situation.
Earlier today, I talked with Mr. Calabrese and discussed the trademark infringement settlement and Lionel’s recent sales. He wanted me to pass along a few comments about our conversation.

Click on the link below to read on

Continue reading "Jerry Calabrese Comments on Union Pacific Trademark Infringement Settlement and Lionel’s Recent Sales By Erol Gurcan" »

September 15, 2006

Lionel Releases Statement About Union Pacifc Lawsuit

Lionel Lionel's CEO, Jerry Calabrese, released a statement about Lionel's settlement with Union Pacific concerning trademark infringement.  Read it here.

 
 
 

Related Posts
Union Pacific and Lionel Settle Trademark Infringement...
A Summary Of The Union Pacific MTH Trademark Infringement...

September 13, 2006

Union Pacific and Lionel Settle Trademark Infringement And Enter Into Trademark Licensing Agreement

September 13, 2006-Lionel has settled the trademark infringement lawsuit brought against it by UP. Additionally, the two have also entered into a trademark licensing agreement. However, the court where Lionel’s bankruptcy has been pending since November 15, 2004, must approve the deal since they are in bankruptcy. To that end, Lionel’s attorney’s filed two motions (an application for a court order) in the United States Bankruptcy Court for the Southern District of New York on September 13, 2006, requesting, 1) the court approve the agreement entered into by the two parties, and 2) requesting the court make some of the terms of the agreement confidential. The motions are currently scheduled to be heard on October 11, 2006. The information for this article was obtained from the two motions.

It is expected the motion requesting the court to approve the lawsuit settlement and

Click on the link below to read on

Continue reading "Union Pacific and Lionel Settle Trademark Infringement And Enter Into Trademark Licensing Agreement " »

August 19, 2006

K-Line Collector Club Info From Lionel

Jerry Calabrese, CEO of Lionel, released a statement on the status of some pre-paid K-Line collector club orders that went undelivered because of the K-Line bankruptcy.  Lionel promised to fulfill the pre-paid orders once they had a chance to sort out the paper work and determine which club members were due product.  Apparently Lionel has made some head way.  You can get all the details from the Lionel website here.

August 18, 2006

Lionel 2006 Volume 2 Catalog Corrections

Earlier this year MTH had announced a slew of catalog corrections for the MTH 2006 Volume 2 catalog and yesterday, Lionel announced a few corrections of their own for the Lionel 2006 Volume 2 catalog.   They are:

6-38621 K Line By Lionel Pacific and 6-38619 Santa Fe By Lionel Pacific.
These will come with plastic tenders, not die cast.

6-30016 NYC Flyer Set. Rolling stock will have plastic trucks, not die-cast.

6-30042 Cascade Range Expansion Pack. Will come with 4 pieces of straight
track, no uncoupling track as correctly described in Volume I catalog.

Related Posts
Lionel To Offer Another Version of "Big Boy"
Lionel 2006 Volume 2 Catalog Available On Line

August 16, 2006

Lionel To Offer Another Version Of the "Big Boy"

Lionel will be offering another version of the Union Pacific "Big Boy", #4012, which is currently preserved at the Steamtown National Historic Site.  The #4012 will be the same configuration as the #4014 shown in the 2006 Volume 2 catalog.  The TMCC II Legacy promotion will also apply to the #4012.

August 12, 2006

TMCC II Legacy

TMCC II "Legacy" is Lionel's new digital train control system.  I posted about this in the past but "Clyde Coil" and "D. Railer" over at the HiRail Times blog have been posting so many new articles about the system I thought it was worth mentioning again.  You can also get the scoop directly from the new Lionel catalog by clicking on the following links:

Introduction
Details

Based on the recent posts on HiRail Times it seems like the new "Legacy" system is amazing.  I wish I had a layout that could handle Lionel's new Union Pacific "Big Boy" which is one of the first products to get the new system and includes a TMCC II Legacy controller. 

August 11, 2006

A Summary Of The Union Pacific MTH Trademark Infringement Case by Erol Gurcan

August 11, 2006-Over the last several months, there has been a lot of discussion on the OGR on line forum about the validity (or lack thereof) of Union Pacific’s three trademark infringement lawsuits (against Lionel, MTH and train photographer Nils Huxtable), but little information concerning the specifics in each lawsuit. There was also plenty of discussion last week because of a UP press release on its web site regarding its trademark licensing program. That memo stated in part;  Click on the link below to read on

Continue reading "A Summary Of The Union Pacific MTH Trademark Infringement Case by Erol Gurcan" »

August 08, 2006

Lionel Financials

Not much O Gauge news to post about during these dog days of early August so I took some time to finally finish this post about Lionel's financials that I started back in April of this year.  Since Lionel, LLC is in bankruptcy, it has to submit an operating report to the bankruptcy court each month.  The reports are entered into the public record so we get an opportunity to look at the finances of the privately held company.  I pulled down Lionel's operating reports from 1/2005 through 6/2006 and parsed some of the numbers and present them here in graph form.  Click on the link below to read on

Continue reading "Lionel Financials" »

July 28, 2006

Lionel 2006 Volume 2 Catalog Now Available On Line

The new Lionel 2006 Volume 2 catalog has been released on line.  Check it out here.

July 27, 2006

O Gauge Railroading's Interview With Lionel's Jerry Calabrese

If you're not a subscriber to O Gauge Railroading magazine, you'll want to check out OGR's interview of Lionel's CEO, Jerry Calabrese from the June/July issue of OGR.  Lionel has posted the interview here.

 

Related Posts
Lionel's CEO, Jerry Calabrese, Comments On Latest MTH Lawsuit
Jerry Calabrese and Mike Wolf Comment On June 7's Trade  Secrets Appeal

July 26, 2006

Lionel 2006 Catalog Volume 2 Available At Hobby Stores

The new Lionel 2006 Volume 2 catalog is now available at hobby stores.  Lionel has not posted the catalog on their web site yet but I would expect it to be posted by the beginning of next week.  The much anticipated Union Pacific "Big Boy" with Lionel's new train control system, TMCC2, is on the cover.  Lionel's "K-Line by Lionel" products are also making their debut in the new catalog.

Details about TMCC2 or TMCC "Legacy" have been the subject of many recent posts on the HiRail Times blog.

 

Related Posts
Clyde Coil Post About TMCC Legacy
Understanding The Lionel - K-Line Deal   Part 1
New Press Release About Lionel/K-Line Deal (4/25/06)
The Latest On Lionel's TMCC2 Train Control System (4/25/06)

Bankruptcy Court Approves Lionel’s Motion to Extend its Time to File For Reorganization by Erol Gurcan

July 25, 2006-In my article dated July 21, 2006, I stated Lionel’s attorneys had recently filed a motion (an application for a court order)  with the bankruptcy court seeking to extend its time to file a plan of reorganization. The motion specifically requested that Lionel be given 120 days to file a plan of reorganization with the court once there is a decision in the MTH-Lionel trade secrets appeal heard on June 7, 2006. A decision in that case is expected late this year or early next year. Lionel’s motion also sought an additional 60 days to allow other interested parties, such as Lionel’s creditors (like MTH) to file their own plan with the court, once Lionel’s plan was filed. In my July 21 article, I stated I expected the motion to be granted.  Click on the link below to read on.

Continue reading "Bankruptcy Court Approves Lionel’s Motion to Extend its Time to File For Reorganization by Erol Gurcan" »

July 23, 2006

"Lionel Trains: On Track" for Nintendo DS

Lioneltrains DSI Games will be releasing Lionel Trains: On-Track in Q4 of 2006 for the Nintendo DS game system.  The game is supposedly like Railroad Tycoon and will feature 20 different Lionel trains. The game lists for $19.95 and has a release date of 10/17/06.  This is an interesting branding play by Lionel to attract the attention of the video gaming crowd (or is it a play by DSI for kids interested in Lionel Trains?).

Clyde Coil Post About TMCC "Legacy"

Clyde Coil of the Hi Rail Times blog posted a few details about the new Lionel TMCC "Legacy" system.  As reported by OGaugeWatch.com back in April, the system that everyone has been referring to as TMCC2 will be making it's debut at the LCCA convention in Denver, Colorado.  Clyde mentions  retrofit kits will be available to upgrade older locomotives and hints that you will be able to upgrade Atlas O locos as well.  He goes on to mention that DCS will still have the same compatibility with Lionel's TMCC systems.

Read Clyde's post here.

 

Related Posts
TCA Open House Part 4


July 22, 2006

Lionel 2006 Catalog Volume 2

The talk around the O Gauge forums and hobby shops is that the new Lionel 2006 Catalog Volume 2 will be available next week.  Lionel has started including new products from the '06 volume 2 catalog  in their on line "product navigator".  There are also some photos of new K Line by Lionel offerings.  Click on the links below to see some of the new offerings including the new Union Pacific 4-8-8-4 Big Boy and MTA Subway with TMCC2.

UPDATE 7/22/06:  I guess the web developers at Lionel finally realized that building new web pages on their public facing Internet sever wasn't a good idea and removed public access to the  partially complete product navigator pages for the UP Big Boy and MTA Subway Set.

New UP 4-8-8-4 Big Boy  MSRP $1,699
MTA R-27 Subway  MSRP $699.99
Here is a nice interior photo of a Subway car
Great Northern Diesel Freight MSRP $739.99
K-Line Power Car Photo
K-Line 4-6-2 Photo
K-Line Diesel Switcher

 

Related Posts
Catalogs

July 21, 2006

A Status On Lionel's Bankruptcy; How Long Will It Last? By Erol B. Gurcan

Those of us following the various legal proceedings in the 3 rail world know that Lionel has been in bankruptcy since November 15, 2004, now a period of 20 months. While that may not sound like a long time to some, by comparison,  K-Line’s bankruptcy was over and done with in 8 months, and they did not emerge from it. (K-Line’s tooling and assets were purchased by its principal manufacturer Sanda Kan in April 2006, who in turn, licensed them to Lionel as part of a licensing and marketing agreement).   Click on the link below to read on.

Continue reading "A Status On Lionel's Bankruptcy; How Long Will It Last? By Erol B. Gurcan" »

July 02, 2006

K-Line Close Outs?

According to several threads on various O Gauge forums, Lionel has sent train shops a sales letter containing a list of original K-Line inventory, manufactured by K-Line before Lionel's involvement, available at reduced prices.  These items will not have warranty coverage from Lionel and will be sold as-is.  I've seen a copy of the letter from Lionel's VP of Sales posted on several forums and judging by the posts in the forums it seems to be legitimate.  The letter also states that new "K-Line by Lionel" products will be in Lionel's 2006 Volume 2 catalog (info that is consistent with a Lionel press release about the K-Line deal released in April) due out in July '06 .  Contact your local train shop for more details.

Related Posts
New Press Release From Lionel About K-Line Deal

June 24, 2006

Interesting Use of Lionel Trains

Back in the day, Lionel trains were apparently viewed as more than just toys by the scientific community.  An article In the June 1949 issue of Popular Science explains how Lionel trains were used to move capsules of radon gas around a laboratory.  The Modern Mechanix blog has scanned and posted the original Popular Science article.  Check it out here.

Related Posts
Unusual Use For Lionel Trains

June 20, 2006

MTH Dropping Patent Infringement Lawsuit Against Lionel

Here's the press release received by OGaugeWatch today from MTH's Andy Edleman, VP of Marketing, announcing that MTH has dropped the patent infringement lawsuit with Lionel.

June 20, 2006 – M.T.H. Electric Trains announced today that it is dropping its patent infringement lawsuit with Lionel after both Lionel and M.T.H. agreed to wait on the Sixth Circuit Court of Appeals ruling in the theft of trade secrets case between the two firms. That ruling is expected in six to eight months at which point the patent infringement case could be revisited should Lionel need to resolve it in order to exit from bankruptcy. 

The patent infringement suit was filed by M.T.H. in response to Lionel’s motion for discovery of M.T.H.’s patent infringement claim using Bankruptcy Rule 2004, a particularly invasive form of discovery that afforded M.T.H. no confidentiality protection for information uncovered during the discovery process.  Consequently, information obtained during the discovery could have been shared with Lionel’s engineering and marketing teams and provide the company with an inside look at M.T.H.’s plans for its technology.

Related Posts

MTH Files Patent Infringement Case Against Lionel by Erol B. Gurcan

Lionel's CEO, Jerry Calabrese, Comments On Latest MTH Lawsuit

MTH Responds To Lionel's Statements On New Patent Infringement Lawsuit

MTH Releases A Time Line Of Developments That Led MTH Into Latest Lawsuit With Lionel

June 14, 2006

MTH Releases A Timeline Of Developments That Led MTH Into Latest Lawsuit With Lionel

Mr. Andy Edleman, MTH's VP of Marketing, in his response to Lionel's statement about the new patent infringement lawsuit filed by MTH against Lionel, stated he would produce a timeline of events supporting MTH's decision to move forth with the patent infringement lawsuit.  In his initial response Mr. Edleman commented:

"...we believe consumers who desire to understand the nature of this dispute would be best served by reviewing an assortment of documents that lays out how this entire dispute began...  Beginning Wednesday, June 14, 2006, a timeline of events complete with a series of downloadable documents will be available via various online forums that illustrates Lionel’s actions and M.T.H.’s counter actions in the brightest of light.

Mr. Edleman has graciously supplied OGaugeWatch.com with the timeline which includes links to  several documents.  Here is the timeline document in it's entirety:

"The following timeline illustrates the developments of patent infringement issues between M.T.H. Electric Trains and Lionel over the past four years. Under each date we have included a link to a PDF document that contains either actual correspondence between M.T.H. and Lionel counsel or court documents pertaining to the actual issue.

Consumers interested in understanding in more detail the actual events between the two firms, as they occurred, will find this information far more helpful than a press release designed to put the firm's best foot forward. With this information, consumers will be able to see both company's tactics and concerns so that one can draw a more balanced impression of what has been occurring in our industry.

It is our hope that when such information is digested, M.T.H.'s actions will be better understood.

Continue reading "MTH Releases A Timeline Of Developments That Led MTH Into Latest Lawsuit With Lionel" »

MTH Responds to Lionel's Statement On New Patent Infringement Lawsuit

MTH's Mr. Andy Edleman, Vice President of Marketing, responded to Jerry Calabrese's statements concerning MTH's latest lawsuit.   In his response, Mr. Edleman explains why MTH made the decision to file the patent infringement lawsuit.  Below is Mr. Edleman's statement in it's entirety.

"June 13, 2006 – Regretfully M.T.H. Electric Trains feels compelled to respond to Lionel’s statement regarding our recently filed lawsuit in the Southern District of New York Bankruptcy Court. The action was filed against Lionel LLC for patent infringement pertaining to Lionel’s inclusion of certain patented features found in M.T.H.’s sound and train control technology.

Continue reading "MTH Responds to Lionel's Statement On New Patent Infringement Lawsuit" »

June 13, 2006

Lionel's CEO, Jerry Calabrese Comments on Latest MTH Lawsuit

News from the O Gauge legal front has been fast and furious over the past few days.  The most recent news comes from Lionel's CEO, Jerry Calabrese, who released a statement on Lionel's web site concerning the latest MTH lawsuit against Lionel.  In the statement Mr. Calabrese comments:

"Yesterday, despite its prior statements to the contrary, MTH sued Lionel for alleged infringement of its smoke and speed related patents, seeking unspecified damages and injunctive relief.  MTH also asked the court to preemptively rule that its own trains do not violate four of Lionel's patents, or to declare our patents invalid.  Lionel does not believe that it infringes MTH's patents and intends to vigorously contest these claims and defend its patents, which pre-date the MTH patents in question. 

We’re disappointed that MTH has again decided to resort to litigation at this time, especially since the alleged smoke and synchronized speed related patent infringement issue was already filed in the bankruptcy court as a $17 million secondary claim, and would have had to be resolved before Lionel could emerge from bankruptcy, in any case. There are a lot of possible explanations as to why MTH chose to bring this action now, but I’ll refrain from interpretation or speculation."

Mr. Calabrese goes on to speculate the reason for the lawsuit may be in response to the perception that Lionel's June 7 court appeal of a court's $40+ million ruling against Lionel for theft of MTH trade secrets went well in favor of Lionel.

You can read the Mr. Calabrese's entire statement here.

Related Posts
MTH Files Patent Infringement Lawsuit Against Lionel

Jerry Calabrese and Mike Wolf Comment On June 7’s Trade Secrets Appeal by Erol B. Gurcan

June 13, 2006 - Those who have been following the legal proceedings in MTH’s trade secrets case against Lionel, know that each side’s lawyers squared off in the Sixth Circuit Court of Appeals in Cincinnati, Ohio on June 7. OGR forumite BOB (Bob Baritzek) attended the oral argument of the appeal and wrote an article on the OGR on line three rail forum summarizing what took place. Bob’s report noted that Lionel’s CEO Jerry Calabrese, and MTH’s owner, Mike Wolf,  attended the oral argument of the appeal. Since that time, neither side has publicly commented about the appeal on their respective web sites or other media, until now.

Continue reading "Jerry Calabrese and Mike Wolf Comment On June 7’s Trade Secrets Appeal by Erol B. Gurcan" »

June 12, 2006

MTH Files Patent Infringement Lawsuit Against Lionel By Erol B. Gurcan

June 12, 2006-On June 7, 2006,  I reported that Lionel had filed a motion in its bankruptcy court, requesting it be allowed to obtain discovery with respect to MTH’s 17 million dollar patent infringement claim involving synchronized puffing smoke and sounds effects in relation to the speed of the model train. Specifically, the discovery sought involved infringement related documents from both MTH and Train America Studios, and depositions of persons from both companies. (A deposition occurs when a witness, who has first been sworn in, is asked questions by an opposing party’s attorney, and the questions and answers are recorded by a stenographer.  A written record in the form of a booklet is then prepared by the stenographer and can be used at trial to impeach the witness). The depositions of MTH persons would at least involve owner Mike Wolf and David  Kriebiehl, its Vice President of Research and Development, as both are allegedly listed as inventors according to Lionel’s motion. On June 12, 2006, MTH filed opposition papers to Lionel’s motion, and more importantly, has now sued Lionel for patent infringement.

Continue reading "MTH Files Patent Infringement Lawsuit Against Lionel By Erol B. Gurcan" »

June 07, 2006

Erol’s Legal Update on MTH’s Patent Infringement Claim Against Lionel

June 7, 2006-As some of you may recall from my legal articles published in April, the appeal in the Lionel MTH trade secrets case is scheduled to be heard in the Sixth Circuit Court of Appeals today. Some are hoping that once there is a decision by the appeals court, which is expected late this year, that this will end the six years of litigation between the two train companies, and once again allow them to focus on making quality O gauge trains.    

However, unfortunately, there remains another legal issue between the two, which will most likely be around  long after the trade secrets case is decided. Specifically, this involves a patent infringement claim against Lionel, alleging it  infringed an MTH patent involving its “use of a microprocessor controlled system for the synchronization of puffing smoke and sound effects with the speed of the model train.”

Continue reading "Erol’s Legal Update on MTH’s Patent Infringement Claim Against Lionel" »

May 25, 2006

Lionel Acela Prices On eBay 4 Months Later

Back in the beginning of February I posted auction results from Lionel  Acela listings on eBay as the sets were starting to hit hobby stores.  The list price for the Acela is $1,999.00.  A very anxious person on January 29th paid $2,224.99 for one on eBay!   Well, four months have passed and the average selling price of the Acela on eBay over the past 30 days is $1,642.75.  There seems to be plenty of sets from the limited production run of 2,000 available because there were 20 Acela eBay auctions over the past 30 days.  It will be interesting to track how fast prices will rise over the next year or so as the sets become scarcer.

May 19, 2006

Bankruptcy Court Approves Change In Attorneys Representing Lionel

May 19, 2006 - On May 15, 2006, United States Bankrutpcy  Judge Burton Lifland signed an order granting Lionel's motion to have the law firm of Schulte, Roth and Zabel represent them in future bankruptcy proceedings.  Although the order was approved by the court on May 15, it directed the rentention and compensation of Schulte Roth and Zabel became effective as of April 17, 2006.

By way of background, on April 24, 2006, I reported that Lionel's attorneys filed a motion (an application for a court order)   in the court where

Continue reading "Bankruptcy Court Approves Change In Attorneys Representing Lionel" »

May 03, 2006

Desperate Times Call For Desperate Measures

For fans of Lionel and Mike's Train House (MTH), the #1 and #2 producers of O Gauge model railroad products respectively, it's been a struggle to hold a friendly dispute about which company  makes the best products without uttering the words bankruptcy or lawsuit.  Lionel, the infamous maker of model trains and MTH, the relatively new kid on the block, have been involved in what could be called an epic lawsuit for such a small cottage industry that has lasted over 6 years.  MTH filed suit against Lionel when MTH discovered that new locomotives produced by Lionel were far too similar to those made by MTH.  As it turns out, MTH was right and in 2004 a court ruled that Lionel did in fact steal trade secrets from MTH and awarded MTH $40+ million.  Great for MTH right?  Wrong.  The verdict has had a profound negative impact on the "big 2".  The large verdict in favor of MTH sent Lionel, once the biggest toy manufacturer in the world back in the day, into bankruptcy.  MTH, who has spent millions on legal fees and has yet to collect any money from Lionel, had 57 employees in early 2005, down from 127.  Profits for MTH have dwindled as well from a high of $9.2 million in 1997 to estimated six digit losses in 2005 (according to information in a Inc.com article about the case). Seemingly desperate times for the big "2".  And while the two companies duke it out it the

Continue reading "Desperate Times Call For Desperate Measures" »

April 26, 2006

Lionel and MTH Legal Recap By Erol B. Gurcan

April 26, 2006 - Last  week, I posted several  articles concerning  the current state  of Lionel’s  legal matters. However, last week was also a vacation week since it was right after Easter, and  many kids were off  from school. Thus, many O gauge enthusiasts may have been away with their kids  or grandchildren,  and not read some or any of my legal posts. Many also  went to the York meet and  may not have read the on line forums  in the few days before it. This article will bring you up to speed  as there were several important and interesting legal matters last week that directly affected Lionel and/or MTH. Even if you read my posts last week, I think you will learn something new in this article.    

1)    I reported on April 17  the Sanda Kan K-Line sale of assets agreement  was scheduled to be signed and completed in a couple of days. The deal was completed last

Continue reading "Lionel and MTH Legal Recap By Erol B. Gurcan" »

April 25, 2006

CNNMoney.com Article on Lionel Joint Venture

CNNMoney.com posted an article about Neil Young's involvement with the Creative Trains and Lionel, LLC joint venture to build Lionel's TMCC 2.0 train control system.  The article states that Young is to contribute $1.5 million to the venture.  The article goes on to state:

Creditors including Mike's Train House Inc., a rival train maker, had objected to the joint venture because of Young's involvement on both sides of it, and because Lionel would only license but not own the resulting technology.

But U.S. Bankruptcy Judge Burton Lifland ruled that Lionel "exercised prudent business judgment" in entering the venture, which he said is in the bankruptcy estate's best interest.

Lionel had argued that it needed the venture because it has no technology employees who could develop the control system, and keep it "on the cutting edge of technology."

Creditors dropped their objections after Lionel and Young modified the venture and related agreements, the judge said.

Read the entire article here.

The Latest on Lionel's TMCC 2.0 Train Control System

The much anticipated debut of Lionel's newest version of the Train Master Command Control system, TMCC 2.0, was announced by Jerry Calabrese in his presentation at the TCA's Open House last week.  Below is Erol B. Gurcan's latest update on the legal proceedings surrounding the development of TMCC 2.0.

April 25, 2006-On April 19, 2006, OGR on line forumite Lionel LLC correctly pointed out, that pending bankruptcy court approval, Lionel was going to enter in to joint venture limited liability agreement with Creative Trains for the development of TMCC 2.0. I followed up by stating Lionel’s attorneys had made a motion for this relief (an application for a court order), and it was scheduled to be argued in its bankruptcy court on April 25, 2006 at 10 am.  I called the court today just before noon. I was informed Lionel’s motion was approved by  Judge Lifland. I also checked the federal judiciary’s PACER website to confirm this. It is true an order has  been signed by the judge allowing Lionel to enter into the joint venture agreement with Creative Trains for the development of TMCC 2.0.  The signed order  is also already on the  PACER web site.

Practically speaking, this allows Lionel to continue  funding, and Creative Trains to continue developing,  the long rumored TMCC 2.0. Neil Young is one of the principals in Creative Trains (and 20% owner of Lionel and is one of three persons  on its board). The agreement between Lionel and Creative Trains  was an exhibit to Lionel’s motion papers. It calls for a Creative Trains “to develop, implement and deliver” TMCC 2.0  by October 31, 2006 (just over six months from now).  Lionel is expected to show a working prototype at the LCCA ‘s Denver Convention in late July (three months from now).   

As of this writing, there is nothing on the Hi-Rail Times of the Coil Couplers website about the court approving the deal. You heard it hear first! DANG. 

Erol Gurcan, ESQ.

Thanks for the update Erol! 

Erol B. Gurcan, an O Gauge industry legal expert, is a regular contributor to OGaugeWatch.com.

New Press Release From Lionel About K-Line Deal

Lionel's CEO Jerry Calabrese has issued a press release today on Lionel's web site.  If you have been following OGaugeWatch.com over the past week there's not much new news in the statement.  You can read his statement here.

April 24, 2006

Latest Legal News In Lionel's Bankruptcy Proceedings From Erol B. Gurcan

The latest update on Lionel's bankruptcy proceedings written by Erol B. Gurcan:

I checked the federal judiciaries PACER web site today for the bankruptcy court in the Southern District of New York,  which is  where Lionel's bankruptcy is pending. Today, Lionel's attorneys filed a motion (an application for a court order)  with the court  asking it to allow them to have the law firm of Schulte, Roth and Zabel represent Lionel in future "bankruptcy and general corporate counsel" matters, in place of their current attorneys, O'Melvney and Myers. That office has represented Lionel since they filed for bankruptcy  on November 15, 2004. The main reason for the motion, is the principal attorney representing Lionel in the bankruptcy proceedings, Adam Harris, withdrew as a partner from O'Melvney and Myers on April 17, 2006, and joined the firm of Schulte, Roth  and Zabel.   O'Melvney and Myers will continue to handle litigation, appellate and intellectual property (trade secrets, trademark, copyright and patent law) matters. Thus, O'Melvney's office will  still argue Lionel's appeal in the MTH trade secrets case on June 7 in the Sixth Circuit Court of Appeals in Cincinnati , Ohio.  The motion in the bankruptcy court will be heard on May 8.

The point of the information provided above is to assure all O gauge enthusiasts not to read too much into the change of attorneys on Lionel's behalf. It does not indicate there any problems etc. I want to emphasize that  it is not uncommon for an attorney to leave one law firm and go to another, and take some clients with him. My goal was to post the above information first and let you have all the facts, so as to  avoid any baseless speculation  as to what is really occurring.

Thanks for the update Erol!

April 19, 2006

TCA Open House - Part 4

The last presentation of the day was Lionel.  Jerry Calabrese and two other Lionel representatives presented for Lionel.  Mr. Calabrese started the presentation.  This was my first experience with Mr. Calabrese in person and he projected himself as a business man that was running a company that made trains.  He made the following interesting points:

  • Mr. Calabrese thanked everyone for the success of the '06 volume 1 catalog
  • He stated that people made it clear that they want more affordable products.
  • He announced that the K-line deal was complete and that "12 tractor trailers are removing K-Line product inventory" from K-Line head quarters for relocation to Lionel's Michigan headquarters.
  • Mr. Calabrese confirmed that Lionel will make good on all outstanding K-Line club orders and all other orders that customers pre-paid for.
  • He stated that all repairs that remained at K-Line have been repaired and sent back to their  owners.
  • It will take at least 60 to 90 days for Lionel to sort out the details of the outstanding orders.
  • Some outstanding K-Line orders have not been manufactured yet and most all orders on manufactured goods have been sent out.
  • Lionel will re-launch K-Line in the '06 catalog volume 2 due out in July.  The initial offereings will be sparse but Lionel will carry on the K-Line brand.
  • TMCC2 will be in '06 catalog volume 2
  • A "Big Boy" manufactured with new tooling will be first to get TMCC2 which is scheduled to shipped by the end of the year.
  • Lionel will produce a subway set with TMCC2 also scheduled to be shipped by the end of the year.
  • The first exhibition of TMCC2 will be at the LCCA convention in Denver on the layout that was displayed at Grand Central Station over last year's holidays.
  • TMCC2 will be backward compatible.
  • Mr. Calabrese finished his portion of the presentation by saying Lionel is "Having another good year".

The Lionel Reps took over the presentation.  The highpoints were:

  • They announced a new drive system for Diesel locomotives.
    • Power is transferred from the motor to a single axle to maximize tractive effort
    • Improved slow speed operation
    • Traction tires can be easily replaced by removing the removable side frames
    • Synchronized lash up performance between locos with new drive system
  • Reviewed the Polar Express offerings
  • Showed a production sample of the new Hiawatha
  • Showed production samples of new Coke containers and "Carolina" heavyweight passenger car

See photos of the Lionel display models here.

April 18, 2006

Legal Matters Update

Erol Gurcan posted his latest update on several legal matters within the O Gauge industry on the OGR Forum.  Check it out here.

UPDATE: Here is another update from Erol:

Hi,Dave-here is the latest on the K-Line Sanda Kan deal. You can post it on ogaugewatch.com

In my legal article yesterday, I stated the asset purchase agreement between Sanda Kan and K-Line was scheduled to  be signed the same day (April 17). I also stated the closing should occur in a couple of days. I can now confirm based on my two sources closely involved with the deal that both the asset purchase agreement was signed  today (April 18) and the closing also took place today. The closing involved Sanda Kan paying K-Line and Merrill Lynch. Thus, the agreement is now a done deal.  It will be interesting to see when Lionel makes a formal announcement that they have obtained the licensing rights pursuant to its agreement with Sanda Kan now that they own the assets.    

On a related matter, some have asked about the K-Line products which are still in their  possession for repair and have not been returned. I have been informed that beginning last week, a former K-Line employee began making repairs, and the items are being sent back to their owners. However, this will take a little time. It is expected that most or all items will be repaired before they are returned. Concerning parts for K-Line products, I was not able to find out what will happen with this.   

Erol B. Gurcan

Please note that I normally will post Erol's articles on OGaugeWatch.com in their entirety but due to a glich with my email I didn't receive a copy of Erol's original article that he posted on OGR so I linked to the OGR version. Dave

April 11, 2006

New Lionel Christmas 2006 Catalog Now On Line

The new Lionel 2006 Christmas Catalog is now available on  line at www.lionel.com.   

April 08, 2006

Lionel's 2006 Christmas Catalog Available in Train Shops

L06christmasThe Lionel 2006 Christmas catalog is now available at your local train shop.  There are 24 new offerings from Lionel.  My favorites include the Candy Cane Single Dome Tank Car ($59.99 MSRP) and the North Pole Central 4-4-0 Steam Locomotive ($109.99 MRSP).  I'm sure the most popular offerings will be the new Polar Express items.  There is a Polar Express Add-on Figure set which includes Santa, the Hobo, the Lonely Boy (Billy) and the Hero Girl.  A perfect compliment to the four figures (The Conductor, Hero Boy, Smoke and Steamer) included in the Polar Express Set.  There is also a new Polar Express Elf Handcar, including elves hanging from the handcar's handles ($74.99 MSRP).  This is a replica of the hand car the elves in the movie use to deliver the detached observation car back to the train. 

The most popular item is sure to be the Polar Express Add-on Hot Chocolate Car ($59.99 MSRP).  This car is a coach car (not a diner) with silhouettes of the dancing "hot chocolate" waiters and

Continue reading "Lionel's 2006 Christmas Catalog Available in Train Shops" »

April 03, 2006

Lionel's Latest Catalog

A new catalog from Lionel will be distributed to train shops within the week.  Charlie from Nassau Hobby reported on the O Gauge Railroad forum that a new 15 page Christmas catalog is due from Lionel containing plenty of Christmas themed goodies.  For all you Polar Express fans there are three new items including a new "Hot Chocolate" add on diner car that includes a golden ticket, a set of 4 figures and an elf Hand Car.  There are plenty of other Christmas items as well.  The catalog is not available on Lionel's web site and I'm not sure if it  ever will be so see your local hobby shop for a copy.

March 29, 2006

Two Pieces of Lionel "History" For Sale On eBay

Two plaques commemorating Lionel's 25th and 50th anniversaries are for sale on eBay.  The 25th anniversary plaque is up for $19,500 and the 50th anniversary plaque is selling for $25,000.  The  50th anniversary plaque was presented to the founder of Lionel, Joshua Cowen, during a ceremony at Lionel's Hillside, NJ plant and there are photos of Mr. Cowen holding the plaque.  The 25th anniversary plaque was presented to the "Lionel Corporation".

The 25th Anniversary Plaque:

Prewarplaque

The 50th Anniversary Plaque:

Cowenplaque1

March 20, 2006

More Info About Lionel's "Legacy" System

Hi-Rail Times has another post containing speculation about features of the upcoming Lionel "Legacy" control system.  According to the post, the new system will have a recording and playback feature allowing the operator to automate sequences of events involving trains and accessories on a layout.

Read the Hi-Rail Times post

UPDATE 3/20/06:  The post I made reference to on Hi-Rail Times has mysteriously disappeared and has been replaced with a post anouncing the filming of Three Rail World Episode 3 the 3rd short film in a series that seems to be preparing everyone for the arrival of the new "LEGACY" control system.

March 17, 2006

"Sneak Preview" of Hiawatha on Lionel Web Site

Lionel has posted a series of "sneak preview" photos of their upcoming Hiawatha locomotive on the Lionel website today.

March 16, 2006

Latest Issue of Lionel's Inside Track "in the mail"

Bob Cosgrove, editor of the Lionel Railroader Club, announced on the OGR forum that the latest issue of Lionel's Inside Track news letter is in the mail.  This must be welcomed news to Lionel Railroader Club members as it has been a long time between issues.  Back on February 7th I posted that Lionel had announced the hiring of Mr. Cosgrove and issued an apology to club members for the delay between issues.  You can join the Lionel Railroader Club by visiting Lionel's website.

The Story Behind the "$50,000" Bronze Prototype

Turbine1_2On March 1st I posted about a listing on eBay for what was thought to be a bronze prototype of a Lionel Turbine engine for a “Buy It Now” price of $50,000.  I was curious as to how this piece was obtained so I emailed the seller, Trains ‘n Hobbies.  The owner of Trains ‘n Hobbies, John E. Charvat, was kind enough to send a response to my inquiry. Here’s John’s response:

I am the owner of Trains 'n Hobbies opened in Oceanside, New York in 1979. We moved to Rockville Centre, NY in 1983, and have been there since. We primarily deal in the smaller scales, especially HO, but do handle the larger scales, including Lionel.  Like most stores, we buy and sell used of all scales. 

One day (in 1992) a man in his twenties came in and asked if we bought used Lionel and I answered in the affirmative. He said he had a brass Lionel loco. I told him that this was unlikely, since Lionel had not made brass models since the WWI era. He insisted and I told him to bring it in. I thought no more about it until he returned several days later with a package under his arm and said he had the brass Lionel loco that we talked about. I had visions of a Number 1 or an early trolley, but when he opened the package my heart sank. Not another Turbine! I looked at it and thought that maybe someone had painted it brass to resemble an HO import. I told him that this was not in good shape and would be useful only for parts. I offered him a very low figure since as I told him; in addition to the condition Turbines were not particularly scarce. After a protest, (I was ready to let him walk) he relented.

I took the loco down to my shop, and was puzzled to discover that the 'paint' wouldn't come off. I took it apart and noticed that the inside looked handmade with screwed together frame pieces and other oddities: the smoke chamber was an aluminum tube; the apron (rear ladder) was screwed on rather than peened over; the E-unit lever was over the drivers; and many of the parts including the motor field were bronze. The basic setup was the same as other horizontal motored locos, such as the early 726, and the motor looks like an Atomic motor, but there are no markings anywhere on the piece. Then it dawned on me that Lionel had built prototypes out of bronze, and this could be one of them.

I was later told that some salesman's samples were also made of bronze, but haven't been able to confirm that. In either case, no bronze Turbine has appeared up 'til now, that I know of. I wrote a letter to Lionel and Greenberg and neither of them could affirm or deny the existence of a Turbine Prototype. I have been unable to track down any information on this very unusual loco and have listed it twice to arouse some interest, hoping that someone will have some knowledge and be able to give me some insight or leads on how to find out more.

View photos here.

If anyone has any information about this piece, please contact John at trainsnhobbies@netzero.net.  By the way, the piece didn't sell and has since been re-listed on eBay.

March 14, 2006

The Latest on the newest MTH v. Lionel "Lawsuit" from Erol B. Gurcan

By way of background, on Saturday, March 11, 2006, D. Railer posted on the Hi Rail Times of the Coilcouplers web site,  that according to their inside sources at Lionel, "MTH recently sued Lionel for patent infringement", involving  synchronized smoke, and asking for $15,000,000 in damages.  This information  made its way on to the OGR forum under a thread called "guess what,  another lawsuit."   I posted a response to this thread, stating that no one had seen the lawsuit papers, namely a complaint, which must be filed with the court to start  a legal action. This would need to occur before a defendant is served with the complaint, usually by a process server.  I also stated I asked Charlie of Nassau Hobbies to get a copy of the complaint and that I would publish a summary of it in a few days.

On Sunday, March 12, Charlie forwarded me an e-mail sent to him by MTH president Mike Wolf, stating that a lawsuit had NOT been filed by MTH against Lionel for patent infringement. Charlie posted this information on the AOL message board and I posted it on the OGR forum. Later on Sunday, Mike Wolf,  emailed me directly from China where is presently on business, and again stated MTH had  not sued Lionel, and called the coil couplers post a "lie."      

Thinking there could be a mistake or misinformation  on Coilcouplers end since Mike Wolf was adamant that a lawsuit had not been filed, I emailed them seeking an explanation and asking for proof that a lawsuit had been filed, such as by sending me a copy of the complaint.   I never received a  response.

However, on Monday evening, March 13, 2006,   The Coilcouplers web site posted a "correction" stating "MTH recently filed a 17 million dollar claim against Lionel for patent infringement." It basically altered its earlier "lawsuit"  statement and replaced it with one stating a "claim" had been filed with the court. Specifically, the current statement reads, "There was some confusion caused by our describing the MTH claim as a lawsuit in our previous article which this one replaces. In essence this MTH claim is the same as a lawsuit. Lionel is required to respond and defend against this outrageous MTH claim of 17 million dollars in damages before leaving bankruptcy."    The web site also posted two documents as links which I have reviewed. They are a proof of claim for patent infringement (and not a complaint which starts a lawsuit) filed with the bankruptcy court where Lionel's bankruptcy is pending, on August 3, 2005 (over 7 months ago).

The following is what I have determined from the above facts. Firstly, Mike Wolf was correct that a lawsuit by MTH against Lionel for patent infringement  has not been filed.

Second, the Coilcouplers web site statement that Lionel is "required to defend" the claim in the same way since it is in essence a lawsuit, is not accurate since a defendant must file an answer when a complaint has been filed with the court and served on the defendant.

Moreover, it was Coilcoupers that initiated this whole matter by wrongly stating  MTH had recently sued Lionel, and then having to alter its statement when confronted with the fact it was incorrect. Perhaps it should have better checked it facts before posting its first article, instead of having to later correct it. Tensions in the three rail  run high when lawsuits are involved, and I'm sure Clyde Coil as his associates are well aware of this. MIke Wolf has informed me it is Neil Young, that set up and paid  for the Coilcouplers web site, and  posts some of the material on it. As a 20% owner of Lionel, he should know if a lawsuit has been filed as opposed to a claim being made even though he is not an attorney.    Mike Wolf's proof that Neil Young is involved in the Coilcouplers web site is by way of a copy of a check  he has in his possession, and the web site manager who stated under oath that he gets material to post from Neil via e-mail. Mr. Wolf has offered to send me a copy of the check once he returns from China in two weeks.   

Lastly, the claim is not  that "recent", since it was filed over 7 months ago. If Coilcouplers was so concerned about it, why didn't they mention it earlier? The two documents it linked to its March 13 statement are public documents since they are required to be filed with the court, and have been  for some time.

We will probably  never know if the first Coilcouplers on-line post was an honest mistake or intended to distort the real facts. However, trying to spin  a correction by stating a claim is the same thing as filing a lawsuit or suing, is not accurate.

As a side note, prior to the  Coilcouplers  correction on March 13, Mike Wolf emailed me  the same day  and stated he does not have any plans to file a suit, unless Lionel, who has just threatened to recently sue him for infringing on its patents for TMCC  and speed control, does so. He also claims part of Lionel's goal is to ask the court take DCS (MTH's digital remote control system)  off the market.  If Lionel sues him, MTH plans to counter sue, concerning Lionel allegedly infringing on MTH's patent for  synchronized smoke. Mike's position is MTH  is 100% confident it has all the prior art necessary to defend DCS against Lionel's claim, and they have let Lionel know this.             

Erol Gurcan, ESQ

Thanks for the update, Erol.

March 13, 2006

Rumors of New MTH Lawsuit Not True

Erol B Gurcan confirmed to me in an email yesterday that Mike Wolf is denying a patent infringement lawsuit has been filed against Lionel by MTH.  Mr. Gurcan's email reads:

In yesterday's ogaugewatch.com, you posted Clyde Coil's message  that MTH had filed a patent infringement  lawsuit against Lionel involving synchronized puffing smoke. Since then, Mike Wolf, owner and president of MTH has contacted Charlie of Nassau Hobbies who then emailed me, to report that MTH has NOT filed such a lawsuit. Mike even emailed me directly this evening stating the coilcouplers statement is a "lie." Your readers should know that MTH disputes a patent infringement lawsuit against Lionel has been filed as of this time. 
Feel free to post this on your web site.

Erol Gurcan ESQ.

Thanks for the update Erol.  The report of the alleged lawsuit has yet to be recanted by Hi-Rail Times.

UPDATE 3/13/06:  Hi Rail Times has posted a "correction" that contains links to two documents that seem to prove that MTH filed patent infringment claims (not lawsuits) against Lionel.  One document is dated 2005 and the other seems like it is from 2004.  Given the age of the documents, I'm not sure why the original Hi Rail Times article suggested these claims are new.  More to come.

March 12, 2006

Report of MTH Lawsuit on Hi Rail Times Not True?

 The buzz on the various O Gauge forums is that MTH did not sue Lionel and that the story posted on Hi Rail Times alleging that MTH has file a lawsuit against Lionel is some sort of smear tactic.  Charlienassau of Nassau Hobby posted on the AOL Lionel Model Trains discussion board that Mike Wolf, owner of MTH, is denying that MTH has sued Lionel.  This is interesting because Hi-Rail Times is said to be run by Neil Young, rock star and part owner of Lionel.

March 11, 2006

Hi Rail Times Reporting Another MTH Lawsuit

D. Railer of Hi Rail Times is reporting today that MTH has filed a patent infringement suit against Lionel.  From Hi Rail Times:

MTH's view is that LIONEL's command controlled trains featuring the Odyssey speed control system with synchronized smoke and sound effects infringe MTH patents.

According to D. Railer the lawsuit asks for $15 million.  Stay tuned.

View the entire article on Hi Rail Times

Lionel's Holiday Tradition Express Catalog

Lionel has a new catalog posted on their site containing a few holiday items including a G Scale Holiday Tradition Express set.

View comments on the Classic Toy Train Forum.

March 10, 2006

Info About New Lionel Control System on Hi Rail Times

A new article by D. Railer of Hi Rail Times is suggesting that retro kits will be available when the new TMCC LEGACY system is released.  D. Railer also mentions a "A LEGACY Master Control Panel for operation of entire LIONEL layouts".  Sounds interesting.

Read the entire Hi Rail Times Article

Lionel/K-Line Update from Erol B Gurcan

There have been some recent posts on the OGR 3 rail forum stating that the K-Line website has been shut down, possibly due to the host not being paid. Some may also interpret this to mean that the K-Line's sale of assets to Sanda Kan has been completed, since there is no longer a need for a website.

I contacted K-Line's bankruptcy attorney, Terri Gardner, today as I had not heard anything on their pending sale of assets to Sanda Kan since Lionel's motion to allow it to enter into the licensing deal with Sanda Kan had been approved by the bankruptcy court on February 28, 2006, 10 days ago. Ms. Gardner stated K-Line's sale of its assets to Sanda Kan has not been concluded. There still is no closing date. The agreement is still being negotiated and written documents for it being drawn up. The information obtained from Ms. Gardner does not violate any attorney client privileges.

As I recently stated on February 17 and 28 2006, until the sale of K-Lines assets to Sanda Kan is completed, they do not have anything to license to Lionel. Once the K-Line Sanda Kan deal is concluded, it is expected the Sanda Kan Lionel licensing deal will take place shorty thereafter as the two have already signed a tentative agreement concerning it. Continue to stay tuned.

I will update everyone once there is a major development.

Erol Gurcan

March 08, 2006

Large Lionel Collection for Sale

Someone in the Northern Illinois area is attempting to sell a large collection of Lionel trains, over 200 pre-war, post war and modern cars/engines plus accessories and paperwork.  No indication of an asking price.  The seller has information about the collection posted on his website.

March 02, 2006

New Catalogs from Lionel and MTH Due Out Soon

Charlie from Nassau Hobby posted on the OGR forum that both Lionel and MTH will be releasing new catalogs soon.  In Lionel's catalog, due out this weekend, he hinted that there will be add ons for the Polar Express.  According to Charlie, the MTH catalog, 2006 Vol. 2 is due out in a "few weeks"

View CharlieNassau's Lionel catalog post on OGR
View CharlieNassau's MTH catalog post on OGR

March 01, 2006

Lionel Makes VH1's List of 100 Most Famous Toys

VH1 will air a show entitled "I Love Toys" in which it will count down the 100 most famous toys from your childhood.  The press release lists the top 90 toys and Lionel Trains come in at #26.  VH1 will air five 1-hour daily episodes starting on March 6 at 10 pm ET/PT continuing until March 10.

View the VH1 press release on Yahoo finance.

February 28, 2006

Lionel Court Proceedings Update from Erol B Gurcan

February 28, 2006 - Lionel’s motion in the United States Bankruptcy Court in the Southern District of New York, seeking court approval to allow it to enter into the licensing agreement of K-Line’s assets with Sanda Kan  was on before Honorable Burton Lifland this morning at 10 am. I called the judge’s chambers shortly before noon today. I was informed that, after a hearing, Lionel’s motion was granted by the court.  The court order allowing Lionel to license K-Line’s assets from Sanda Kan should be entered later today or tomorrow. This clears the way for Lionel to be able to eventually license K-Line’ assets from Sanda Kan. I stated in my article on February 17  this was the most important and difficult of the 3 events that needed to occur before Lionel could obtain the licensing rights.

However, as I also reported yesterday, based on information provided to me from K-Line’s bankruptcy attorney Terri Gardner, the sale of K-Line’s assets to Sanda Kan has not been concluded as of the current time. There is also no closing date for this deal as of yesterday. The information provided to me from Ms Gardner is public information and does not violate any attorney client privilege. Until Sanda Kan purchases K-Lines assets, they have nothing to license to Lionel. It is expected this will definitely occur  in the near future.   Stay tuned.      

Erol B. Gurcan

Senior Trial Attorney

February 27, 2006

Current Lionel - K-Line Update from Erol B. Gurcan

February 27, 2006-As of today, the sale of K-Line’s assets to Sanda Kan has not been concluded. Therefore, K-Line’s bankruptcy is still pending. There is no  closing date for the sale as of the current time. The above information was obtained today from K-Line’s bankruptcy attorney, Terri Gardner. The information provided is public information and does not violate any attorney client privileges.

Regarding Lionel’s proceeding to obtain K-Line’s assets, as I stated in my last OGR post on February 17, 2006, Lionel  filed a motion (an application for a court order) on February 16, returnable in the US Bankruptcy Court in Manhattan (where its bankruptcy proceeding is pending) on February 28 (tomorrow), asking the court for permission to allow it to enter into the licensing and marketing agreement with Sanda Kan. This information was obtained from Lionel’s own motion.  As I stated in my previous post, this was the most important and difficult of the three things that had to occur before Lionel could obtain K-Line’s assets from Sanda Kan. As I also stated, I expect this to occur, but it is more than a formality as the judge can grant the motion, deny it, or modify the requested relief on such terms as are reasonable to the court. Even if the motion is granted tomorrow, the licensing deal with Sanda Kan, through a new entity known as Newco,  will not take place yet as they have not concluded their deal with K-Line. Until that occurs, Sanda Kan (through Newco) does not have any assets to license to Lionel.

I will keep everyone updated as necessary.    

Erol B. Gurcan

Senior Trial Attorney

Please note that Mr. Gurcan has graciously offered to add OGaugeWatch to the e-mail distribution of his legal updates concerning the Lionel lawsuits.  His articles will be posted on OGaugeWatch in their entirety with Mr. Gurcan's permission.  Thanks Erol.  

Understanding the Lionel - K-Line Deal - PART 3

In Part 2 of my multi part series to give you a clear understanding of the Lionel – K-Line “deal” I gave you a summary of the K-Line bankruptcy, the principal players involved, and explained what I believed to be the “monkey wrench” that derailed Sanda Kan’s initial attempt to take over the K-Line assets. I also explained the emergence of the deal that Lionel’s CEO, Jerry Calabrese, mentions in his 02/16/06 statement. In this final installment of the series I will review the details of the proposed Lionel/K-Line deal, including the cost to Lionel and Lionel’s option to acquire the K-Line assets.

According to court documents filed with the U.S. Bankruptcy Court for the Southern District of New York on 02/16/06, Lionel is proposing a deal involving Newco (a.k.a. NC Train Acquisition, LLC, a legal entity of Sanda Kan), Sanda Kan and itself that will eventually give Lionel the option to acquire the remaining K-Line assets.

OK, keeping in mind that this deal is predicated on Newco’s purchase of the K-Line assets, here are the terms of the proposed deal:

Continue reading "Understanding the Lionel - K-Line Deal - PART 3" »

Vote For Your Favorite "6464" Lionel Boxcar

There is a new survey on the Coil Couplers of America website allowing you to vote for your favorite Lionel "6464" boxcar from the 1950's.  The survey page also has a link to an interesting write up about the "6464" series of boxcars complete with photos from the e-Train online magazine.

February 26, 2006

Understanding the Lionel - K-Line Deal - PART 2

In Part 1 of my multi part series to give you a clear understanding of the Lionel – K-Line “deal” I gave you a summary of the events that lead K-Line and Lionel into bankruptcy. In Part 2, I will summarize the details of the K-Line bankruptcy, the principal players involved, and explain what I believe to be the “monkey wrench” that derailed one principal player’s attempt to take over the K-Line assets.

The material creditors in the K-Line bankruptcy are Merrill Lynch Business Financial Services and Sanda Kan. As material creditors, both have a claim to what is left of K-Line. Merrill Lynch, K-Line’s senior secured lender, has a claim of $1.6 million dollars that is secured by all of K-Line’s assets located in the United States, including accounts receivables, inventory and intellectual property. Sanda Kan, K-Line’s principal inventory

Continue reading "Understanding the Lionel - K-Line Deal - PART 2" »

February 24, 2006

A Little Lionel History

On the OGR forum, ed h posted a question asking for photos of Lionel's New Jersey factory.  There is a link in the thread with some photos of the abandoned NJ factory but nothing from when it was operating.  So I decided to do search the web for photos of the NJ factory.  I came up empty but did find a bunch of pictures of the Michigan facility from 1988.  Take a look.

February 23, 2006

Understanding the Lionel - K-Line "Deal" - PART 1

In Part One of this multi part series of posts I will lay out the necessary background you need to know to get a complete understanding of the Lionel/K-Line “deal” announced by Lionel’s CEO, Jerry Calabrese last week. Over the past week, speculation and opinions surrounding the announcement has dominated the O Gauge Railroading forum and to a lesser extent, been the subject of some discussion in the other forums. Readers of Mr. Calabrese’s statement were lead to believe (by reading between the lines) that Lionel was actually taking over K-Line. That isn’t the whole story.

To get a better understanding of the deal, I obtained a copy of the docket report detailing the motion filed by Lionel in the U.S. Bankruptcy Court for the Southern District of New York. Since Lionel is in bankruptcy, any of its financial dealings need to be reported to and approved by the bankruptcy court and become part of the public record. On February 16th, 2006, lawyers representing Lionel filed a motion with the court to allow it to enter into the agreement Mr. Calabrese alluded to in his statement last week. Upon reading the report, I quickly realized there were several aspects of the proposed “takeover” which need to be presented to paint a complete picture of the Lionel/K-Line deal. Please note that throughout the court documentation K-Line is referenced as MDK, Inc. For the purposes of clarity, I will refer to MDK, Inc as K-Line.

For you to gain a better understanding of the proposal on the table, it is important to be

Continue reading "Understanding the Lionel - K-Line "Deal" - PART 1" »

February 20, 2006

UPDATE: Lionel Acela Prices Dropping on eBay

Since my last post on this topic, the price of a Lionel Acela set on eBay is coming done.  Over the past month, the Acela sold for as high as $2,224.99 on 1/29/06.  The lowest price paid to date is $1,609.90 on 2/19/06.  Lionel limited production of the Acela to 2,000 sets and the retail price is $1,999.99.  The chart below shows the Acela prices on eBay since 1/22/06.  Click on the chart for a larger view.

Acelaprices_1


February 17, 2006

Another Statement from Lionel's CEO

Lionel CEO Jerry Calabrese has issued another statement on the Lionel web site today.  The subject of this statement addresses Lionel's reaction to Sun Model Corporation's attempt to liquidate K-Line locomotives.  In the statement Mr. Calabrese explains that Lionel had asked Sun Models to stop shipping models that were covered by a permanent injunction issued by a Federal court when Lionel brought suit against K-Line for stealing it's technology.  The Lionel CEO goes on to explain that Lionel has decided to allow Sun Models to continue to liquidate the models in question "even though we have no legal or moral obligation to do so" in what could be interpreted as a sign of good will toward K-Line fans.

Mr. Calabrese seems to take a shot at K-Line's current owner when he states:

Lionel intends to make K-Line products as part of a larger plan to expand our own middle line offerings that we believe have a greater role in our catalog and overall business –  offerings intended to give more people a chance to own quality Lionel products at many levels.  This includes engines and rolling stock that are more manageable in size and price, but yet strong on value.  Having said that, selling highly detailed, die cast, steam engines that contain state of the art electronics for not much more, or in some cases, less than they cost to make, is a devil’s bargain and not a good deal for anyone.

Manufacturers and dealers who do that kind of business do not survive in the long term.  In their wake they leave broken companies, broken hobbies and broken promises.  Who takes responsibility for unshipped orders and pre-paid deposits?  Who provides service and repairs trains that don’t work?  Who invests in new tooling for next year’s products and keeps the hobby fresh and alive?  Worst of all, this kind of irresponsible opportunism poisons the market for merchants and manufacturers who are committed and deeply invested in the next 20 years of the model train business, not the next 20 minutes.

Read Mr. Calabrese's entire statement on the Lionel web site

 

An Interesting Take on the Lionel - K-Line Announcement

Today, Charlie of Nassau Hobbies posted Erol B. Gurcan's (a trial attorney that has had his hand on the pulse of the K-Line bankruptcy) take on the state of the Lionel - K-Line announcement made yesterday by Lionel's CEO, Jerry Calabrese.  It's worth a read because Mr. Gurcan makes the case that it may be a bit premature and incorrect to assume that Lionel is actually taking over K-Line.

View Mr. Gurcan's analysis on the OGR forum

February 16, 2006

Lionel Announces Takeover of K-Line

In a news flash posted on the Lionel web site today, Jerry Calabrese, Lionel's CEO, announced that Lionel will be taking over K-Line's assets including the brand, tooling and unsold inventory and will be making new products under the K-Line brand.  He also stated that Lionel will make good on all prepaid orders for K-Line club products.

Mr Calabrese also stated that Lionel will be opening a new office and showroom in New York City at 33rd and Madison.

On an unrelated note, Lionel has recently posted an Acela FAQ page on their site.

UPDATE: View the trains.com article

February 13, 2006

Original Lionel Dealer Display Sells for Big $'s on eBay

D40_display_1An original Lionel D-40 dealer display layout from 1951 was up for auction on eBay this past week and sold for $17,600.  There were 32 bids from ten bidders.  The winner cast only one bid with 40 seconds remaining in the auction.  Another bidder placed a bid of $17,500 with 7 seconds left but it wasn't enough. 

The 4' x 6' layout of 0-27 track with 2 #1122 switches, a #6019 operating track and display shelves with a Lionel semaphore blade sign was pre wired to accept a number of Lionel accessories that the dealer was to supply.  The layout surface still has it original "grass" intact.  The auction included some of the Lionel accessories plus a copy of the original instruction sheet and wiring diagram.  Shipping charges were an additional $500.  The display was originally available to dealers in 1951 for less than $50.00.

February 12, 2006

Unusual Use for Lionel Trains

Here's an unusual use for a Lionel train.  The photo below is from a picture gallery accompanying a Detroit News article about toy trains.  It's a photo of a scientist using a Lionel toy train to move radioactive material around a lab.  Notice that he is at a ZW controlling the trains.  Click on the photo for a larger view.  The article itself has nice photo of the Lionel assembly line in 1976.

Lionel_lab_3

February 07, 2006

Lionel Apologizes to Lionel Club Members

In a "News Flash" communication to Lionel Club members found on the company's website, Mark Erickson of Lionel's marketing department issues an apology to Lionel Club members.  In the statement, Mr. Erickson apologizes for the length of time between issues of Lionel Inside Track, the club magazine and what most people feel is the real benefit from club membership.  He also announced that Bob Cosgrove has been hired to the Editor-in-Chief post to oversee production of the magazine to ensure the magazine is produced in a timely fashion.  Lionel will be producing an extra issue of the magazine this year.

Read the Lionel "News Flash"

February 06, 2006

Lionel Acela More Impressive in Person

Today I stopped by one of my favorite train shops on the way home from work hoping to get a look at the new Lionel Acela set.  Sure enough, there was the Acela in the display case in all of it's O Gauge glory.  The pictures I've seen posted on the web are impressive but seeing the Acela for myself left me saying WOW! as I stared at it for a while.  It is much longer than I expected and the detail is incredible, right down to the perfectly positioned tiny "Danger High Voltage" sign on the base of the pantographs.  The Acela as a static display was extraordinary so I'm sure it's even more impressive when it's operating.  Unfortunately the shop wasn't running it and probably never will (they don't have much of a working layout - which boggles my mind but that a subject for another post).  This shop was selling the Acela set for $1,699 which is a good price compared to what it's been selling for on eBay recently.  It's a hefty price tag but seems to be well worth it if you have the $$ and layout to run it on.

February 05, 2006

How much for the New Lionel Acela Set on eBay?

Lionel's Acela set was limited to a production run of 2,000 sets.  The sets started hitting hobby shops over the past week or so.  If you are looking for the set many have shown up on eBay.  How much will you pay?  The highest paid so far is $2,224.99, the cheapest is $1,725.  The set retails for $1,999.00.  Here's a recap of  how the Acela has been selling on eBay to date (date shown is auction ending date):

01/22/06  Buy It Now  $1,999.00 plus $40.00 shipping
01/27/06  Buy It Now  $1,999.00 plus $40.00 shipping
01/29/06  18 bids $1,999.00 plus $40.00 shipping
01/29/06  36 bids  $2,224.99 plus $35.00 shipping
01/30/06  Buy It Now  $1,995.00 plus $30.00 shipping
01/30/06  Buy It Now  $1,999.00 plus $40.00 shipping
01/30/06  Buy It Now  $1,995.00 plus $30.00 shipping
02/02/06  17 bids  $1725.00 plus $35.00 shipping
02/03/06  0 bids  $1725.00, $1995.00 Buy it Now w/free shipping  (re-listed)
02/03/06  0 bids $1,999.00 Buy it Now $40.00 shipping (re-listed)

See all the latest Acela listings

February 01, 2006

More Lionel Acela Pictures

CSX FAN posted some more Acela Pics on the OGR forum.  His layout is impressive, especially the cantenary lines.  The detail that Lionel built into this set is amazing.

View the Acela Photos

Update:  Even more pics from OGR  Great detail in these photos!

January 29, 2006

Acela Pics

One picture of the new Acela posted by Prewardude on the Classic Toy Trains forum.

See the Acela picture on CTT.

See more pics on OGR.

January 25, 2006

Ex Lionel Executive Lands at Rokenbok Toys

Members of OGR and CTT forums are reporting that James W. Brady, former head of marketing at Lionel, has been appointed CEO of Rokenbok Toys.  This seems to be old news from 1/16/06 (I missed it when it came out) according to an article on Playthings.com. 

More details on Playthings.com

January 18, 2006

2006 Lionel Catalog Highlights

Here are some of the highlights I found interesting in the new 2006 Lionel catalog. 

 

  • New Thomas theme items.  Lionel is expanding the wildly popular (at least in my household) Thomas the tank engine line with a new James engine and a Sodor Freight expansion pack that contains 4 cars including a caboose and a flat car with Harold the helicopter.  These new additions join Percy the tank engine, who was introduced in the 2005 Catalog, Volume 2.

 

  • A new Christmas themed set, the North Pole Central Christmas Train, is released.  The components of the set, locomotive, musical boxcar, animated gondola and caboose are the same as 2005's Holiday Tradition set but have a North Pole central paint scheme.  Lionel also added 2 new North Pole Central themed holiday expansion packs, a passenger and a freight pack.

Continue reading "2006 Lionel Catalog Highlights" »

2006 Lionel Catalog Revealed Early

The Lionel Catalog, set for release at midnight on 1/18, was discovered to be available well prior to the midnight launch by an astute O Gauge RR forum participant.  Mark of Mojomark.com discovered the link as a result of some information he gleaned from Lionel's website when Lionel inadvertently posted a catalog link prematurely on 1/17.

Read the entire entry on Mojomark.com

January 17, 2006

New Lionel Catalog - Access Denied

UPDATE:  Lionel has fixed their site and the countdown is back.  Release is set for midnight tonight.  Thanks for the update Mark M.

The Lionel website, which has been counting down the days, hours, minutes to the release of the new catalog,  proclaims that the new catalog is now available for viewing.  Clicking on the link returns "You are not authorized to view this page".  Nice job Lionel.

View the Lionel website.

January 12, 2006

Neil Young and Lionel

For those of you that are somewhat new to the O Gauge hobby, like myself, you may not know that Neil Young is a minority owner of Lionel Trains.  Neil, an avid train hobbyist, is known to take train layouts on tour with him.  Neil also designed what eventually became Lionel's Train Master Command Control system, a wireless control system, so his handicapped son, Ben, could operate the trains on Neil's layouts.    In 1995, Neil and Wellspring Associates purchased Lionel.

According to this blog post on the Neil Young News blog site, Clyde Coil at Hi Rail Times is actually Neil Young.  There are some interesting videos on the Clyde Coil site that were made this year and seem to be announcing the coming of a new "system" which is most likely TMCC 2.  Folks on the OGR forum have come to the consensus that the layout in the videos is indeed Neil's.

Interesting web posts about Neil Young's involvement in the O Gauge hobby:
Neil Young and Lionel Trains
Take a ride on Neil Young's Trains

View the Clyde Coil videos here.

2006 Lionel Catalog

The home page of www.lionel.com has a clock counting down the minutes to the release of the 2006 catalog.  The catalog will be released on 1/17.

January 05, 2006

Lionel BB1 Review

There is a nice review of Lionel's new BB1 switch engines by Bob Bubeck on the OGR forum.  Bob includes a link to pictures of the BB1 at the end of his post.

Read the entire review on the OGR forum.

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