In conjunction with the Chapter 11 filing, 4Kids also filed motions that will allow the Company to continue to manage operations.
"We want to assure our clients, business partners and licensees that during the pendency of the bankruptcy, 4Kids will continue to provide the same level of service and dedication that it has in the past," says Michael Goldstein, interim Chairman of 4Kids Entertainment. "The Company will also continue to explore its strategic alternatives, including, the possible sale of the business or reorganization as a stronger and more focused company."
The 4Kids bankruptcy filing automatically "stays" the lawsuit filed by the licensors of the Yu-Gi-Oh! property,
"We have made every effort to reach agreement with the Licensors," says Goldstein. "When the Company did not receive a positive response from Licensors to its settlement proposal, the Board of Directors was left with little choice but to authorize the filing of a bankruptcy petition under Chapter 11 in order to best preserve the business and assets of 4Kids Entertainment. We continue to believe that the purported termination of the Yu-Gi-Oh! Agreement was wrongful and that 4Kids' assessment of the audit claims will be vindicated in court. If the Court rules in favor of the Company, 4Kids will pursue the full measure of damages for the significant injury the Licensors have caused to the business of 4Kids.”
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