After selling its biggest source of revenue, Emak Worldwide Inc. has filed a plan to emerge from bankruptcy as a new company.

The L.A.-based conglomerate of advertising agencies Feb. 9 sold Logistix, a subsidiary that makes toys for giveaways in kids’ meals at Burger King and other fast-food restaurants. Logistix accounted for about two-thirds of Emak’s revenue, based on information from the company.

Then on Feb. 28, the company filed a reorganization plan to emerge from Chapter 11 bankruptcy. If the plan is approved by creditors and the court, the company would change its name to Emak Holdings Inc., and it would focus on marketing and advertising.

Logistix was sold to Bensussen Deutsch & Associates, a merchandise marketing agency in Woodinville, Wash., for an undisclosed amount.

The sale and the pending settlement could end a two-year battle between Chief Executive James Holbrook and former Chief Executive Don Kurz over the direction of the company. Kurz led a dissident shareholder group called Take Back Emak that waged an unsuccessful proxy fight for control of the board in 2009.

Kurz maintained Emak should concentrate on its core business of supplying fast-food restaurants and stores with promotional toys, usually based on Hollywood movie or cartoon characters. This model powered the company in its heyday through 2003, when its stock traded above $15 a share.

Holbrook has said the promotional item industry has declined: Retailers now advertise low prices, not toys, to get customers. As a result, he wanted Emak to turn into a group of midsize advertising agencies.

He said that with the sale of Logistix, the company is no longer in the promotional item business. The reorganization plan would make Emak Holdings the ad agency umbrella that Holbrook envisioned.

The reorganization plan calls for the company to pay stockholders 10 cents per share to forfeit any future claims. The shares late last week traded for 40 cents on the Pink Sheets.

The filing states Emak believes the 10-cent price is greater than any recoverable monies if the company liquidated.

Robbin Itkin, partner and bankruptcy attorney at the L.A. office of law firm Steptoe & Johnson, said shareholders most often get nothing in a bankruptcy settlement, so 10 cents per share isn’t necessarily too low.

“There’s a priority scale of who gets paid, and equity holders are on the bottom of the scale,” Itkin said.

As part of the proposed reorganization, Crown Emak Partners, an investment fund controlled by London financier Peter Ackerman that owns all Emak preferred stock, would gain nearly complete control of Emak. A few shares would be reserved for management incentive plans. Also, Crown Emak Partners would loan $4.5 million to the company to pay off creditors and common shareholders.

The biggest customer in Emak history was Burger King Corp., which at one point accounted for more than half the company’s revenue, but Emak lost the account in May. In August, it voluntarily entered Chapter 11 bankruptcy.

Holbrook declined to discuss the bankruptcy plan under advice from his attorneys, but he said the company’s future business model would emphasize marketing services.

Emak has three marketing companies: full-service Chicago agency Upshot, creative boutique Neighbor in Santa Monica and promotional product agency Equity Marketing in Los Angeles.

Holbrook said the sale of Logistix was part of his plan to move away from promotional products. The midsize ad agency model, he continued, will yield lower revenue but higher profit margins and a brighter future than promotional products.

“We are out of that promotional product business now,” he said. “But we are talking about rebuilding Equity Marketing into a new advertising agency in Los Angeles.”

Holbrook expects the company to emerge from bankruptcy reorganization “sooner rather than later.”

A hearing on the bankruptcy is scheduled April 7 in the U.S. Bankruptcy Court in Los Angeles.