Lionel Quality Electric Trains
Lionel Chapter 11 Filing: Frequently Asked Questions

Lionel Chapter 11 Filing:

Frequently Asked Questions


The MTH lawsuit against Lionel entered a new phase when the judge officially entered a $40.8 million judgment against Lionel for the alleged misappropriation of designs by a subcontractor. As a result of this action, Lionel filed for Chapter 11 bankruptcy protection on November 15, 2004.

Q. Why is Lionel filing for bankruptcy?

A. In Lionel’s case, filing for Chapter 11 bankruptcy protection is simply a tool that helps facilitate the appeals process. Taking advantage of bankruptcy protection will not only allow Lionel to pursue an eventual reversal of the unfair court decision, it also protects our ability to develop and deliver the high quality product and unparalleled service that have been Lionel trademarks for over 104 years.

The MTH judgment alone forced Lionel to take this action. Lionel is a sound company that enjoys healthy sales, growing demand for its products and the best brand and reputation in the business.

Q. Does filing for bankruptcy mean that Lionel will eventually go out of business?

  1. In the four years since it began, this lawsuit has never had any effect on the day-to-day operation of Lionel, nor will it affect the company during what we are sure will be a long appeals process. Under absolutely no circumstances will this lawsuit force Lionel to go out of business. Thanks to the loyalty of our valued customers and a product line that has made us the industry leader for over a hundred years, Lionel’s business remains healthy and robust. Nothing will interfere with our current and aggressive plans. In fact, over the next year, we will begin introducing a series of new and exciting product innovations and promotional programs that will begin a new era of growth for our hobby.


    1. Does filing for bankruptcy mean that MTH will eventually end up owning Lionel?
    1. No. This judgment, as egregious and damaging as it is, will not result in an absorption of Lionel by MTH or any other of our competitors.


    1. Will any Lionel employees lose their jobs as a result of this filing?

    A. No employees will lose their jobs as a result of Lionel entering into Chapter 11 bankruptcy protection. Taking this action will not impact the way Lionel manages and conducts its day-to-day business.


    1. How long will Lionel remain in Chapter 11?
    1. Lionel will remain in Chapter 11 for as long as it takes the appeals process to play out. Again, we are entering into Chapter 11 for one reason and one reason only: to ensure that business continues unabated throughout the entire length of the legal proceeding.
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