|K-Line announcement from Jerry Calabrese
February 16, 2006
First of all, let me wish a belated happy and healthy 2006 to all. In the spirit of those really long holiday newsletters we get from friends and family, I offer you my own. I hope the following information is of interest and clears up at least a few questions and curiosities.
ACELA - It’s been a real adventure, but I’m happy to tell you that just about all of the Acelas have been delivered. To those of you who bought one, congratulations and enjoy it. To those of you who didn’t, but have enjoyed speculating about it, thanks for all your interest and good wishes. There’s a lot I could say about how much work went into making it, and how proud we are to have gotten it done, but the Acela is perfectly capable of speaking for itself.
K-LINE – Having said that, another situation, K-Line, is in need of some explaining. The K-Line bankruptcy continues to generate a lot of legal documents, rumors and speculation that can only be weighed in verbal tonnage and lawyer’s fees. That’s why I want to set the record straight in plain English.
Pending only the final documentation of our agreement with Sanda Kan, K-Line’s main manufacturer and principal creditor, Lionel will take control of the K-Line brand, its tooling, its inventory of unsold products, and everything else that lawyers and accountants call, “assets.” As soon as we can straighten things out and get organized, Lionel will make new products under the K-Line brand, and market and sell those products as part of the Lionel line.
For those of you who have paid for but not received K-Line club products, Lionel is going to make good on your orders. It may take us a little time to sort things out, but I believe giving people what they’ve already paid for is the right thing to do, even though we will be doing so at our own expense. It’s also an important step in rebuilding the K-Line brand and demonstrating Lionel’s long term commitment to K-Line’s fans.
It’s too early to lay out the exact details of how everything will be done in the incorporation of K-Line into Lionel, but we’re working on it and expect a reasonably smooth transition.
Finally, I just want to say “thanks” to all of the Lionel fans and retailers who made 2005 one of the best in our recent history, and saw us through some pretty tough times just one year ago. We appreciate your dedication and support and promise to do our best to make 2006 even better.