|Lionel LLC Files for Chapter 11 Protection
For Immediate Release
Lionel LLC Files For Chapter 11 Protection
Chesterfield, Michigan – November 15, 2004 – Lionel LLC, the nation’s number one model train manufacturer, today announced that it has filed a voluntary petition in the Bankruptcy Court of the Southern district of New York for protection under Chapter 11 of the U.S. Bankruptcy Code. The filing was prompted by a $40.8 million judgment against the company for the alleged misappropriation of a competitor’s toy train designs by a subcontractor.
Lionel’s day-to-day operations will continue as usual, including meeting all merchandise shipping obligations customary for the holiday selling period and rolling out new products on schedule. The company remains dedicated to creating and manufacturing the quality product for which it has long been known.
Jerry Calabrese, the recently named CEO of Lionel, said, "The MTH judgment alone has forced us to take this action. Lionel is a sound company that enjoys healthy sales, growing demand for our products and the best brand and reputation in the business. Having said that, the size and weight of this judgment is just too much for what is essentially a small business to bear. Taking advantage of bankruptcy protection will not only allow us to pursue an eventual reversal of this unfair decision, it will enable us to create, manufacture and ship our products in our normal and usual way."
About Lionel LLC
Lionel LLC is one of the world’s leading marketers of model trains and accessories. Established in 1900, the Lionel name is the most widely recognized brand in the toy train industry and one of the most recognized brands in America. Lionel has been at the center of every major innovation in toy train manufacturing and marketing since its inception.
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1Chapter 11 of the U.S. Bankruptcy Code allows a company to continue to operate its business and manage its assets in the ordinary course of business. Congress enacted Chapter 11 to enable a debtor to preserve its going concern value and operations, as well as to provide its employees with jobs and to satisfy creditor claims based upon the value of the reorganized company.