The United States Bankruptcy Court for the Southern District of New York has ruled in favor of 4Kids Entertainment in the first phase of the trial of the lawsuit brought by plaintiffs Asatsu-DK and TV Tokyo Corporation, the licensors of the Yu-Gi-Oh! property, against 4Kids.
In a decision on Dec. 29, 2011, the Court ruled that the Yu-Gi-Oh! property license agreement was not effectively terminated by the Plaintiffs prior to the 4Kids’ bankruptcy filing on April 6, 2011; rather, the Yu-Gi-Oh! Agreement remains in full force and effect and is property of the 4Kids’ bankrupt estate.
The Court’s opinion considered the plaintiffs’ audit findings totaling over $4.8m and concluded that audit findings totaling approximately 99 percent of the amount claimed by the plaintiffs were "meritless."
The second phase of the trial to determine the damages payable to 4Kids arising from plaintiffs’ purported termination of the agreement has not been scheduled, but is expected to commence as early as the first quarter of 2012.
"We are very pleased with the Court’s decision which confirms that the Plaintiffs’ purported termination of the Yu-Gi-Oh! Agreement was wrongful and that the Plaintiffs’ audit claims were baseless," says Michael Goldstein, interim chairman of 4Kids. "We are hopeful that members of the Yu-Gi-Oh! Consortium will take note of the Court’s detailed findings and work with 4Kids to put this matter behind us so that all parties can work together constructively for the continued success of the Yu-Gi-Oh! brand. We would also like to thank our many clients and business partners for their support and understanding."