A federal judge in Riverside on Thursday scaled back a court-appointed lawyer's control over MGA Entertainment Inc. while the Van Nuys toy maker continues to fight turning over its Bratz doll franchise to El Segundo rival Mattel Inc.
The role of Beverly Hills attorney Patrick Fraioli, who was appointed temporary receiver last month, was converted to monitor. U.S. District Judge Stephen Larson had made the initial appointment in response to Mattel? concerns that MGA Chief Executive Isaac Larian appeared to be hiding the company's assets from creditors.
The receiver essentially replaced the company? board and had sweeping authority to sell assets, investigate business transactions or even recommend that the company file for bankruptcy. As monitor, Fraioli has a say over certain financial transactions, but MGA executives regain control over the company.
Larson ordered MGA to continue turning over to an account controlled by Fraioli all net profits from the sale of an existing inventory of dolls and any new dolls made through this year.
A federal jury last year decided last year that a former Mattel doll designer created the Bratz name and characters for MGA while still working for Mattel. Larson last month declined MGA's request to reduce the $100 million award the jury granted to Mattel Inc
Larson on Thursday denied MGA? motion for a stay pending appeal, which would have given the company the rights to continue making and selling Bratz dolls until it can file its appeal on the entire case with the Ninth U.S. Circuit Court of Appeals.
?attel is gratified that the court is ordering the prompt transition of Bratz to Mattel and has rejected MGA's requests for delay,?Mattel said in a statement Friday. A Mattel spokeswoman said the company had not sought a permanent receiver over the entire company, and was happy with Fraioli being appointed permanent monitor over the Bratz operations.
For reprint and licensing requests for this article, CLICK HERE.