Mattel Inc. on Wednesday filed suit against longtime rival MGA Entertainment Inc. to preserve its right to the Bratz doll assets if it wins an upcoming retrial over the doll line.
Mattel of El Segundo has expressed concern that a creditor that it claims is friendly to MGA Chief Executive Isaac Larian might end up with a superior claim to the Van Nuys toymaker’s assets.
In July, U.S. District Court Judge David Carter ruled that Mattel was wrongly awarded ownership of the Bratz line in a 2008 jury trial. The case is scheduled to be retried on Jan. 11.
Mattel claims that Omni 808 Investors LLC, which is run by Beverly Hills investor Neil Kadisha, bought a loan which was collateralized by MGA assets including rights to the Bratz doll. The loan is in default, so Omni 808 could foreclose and claim the collateral or be first in line if MGA eventually files for bankruptcy. Omni 808's secured rights to the assets could challenge any court judgment Mattel might get if it wins the second trial.
“MGA and Larian … have fraudulently transferred and encumbered MGA’s assets to ensure that no matter the outcome of the underlying lawsuit, Mattel will never be able to recover for its losses, and, to the contrary, MGA and Larian will maintain control over their ill-gotten gains,” Mattel said in the new suit filed in Los Angeles County Superior Court.
“Mattel filed this suit … in order to preserve Mattel’s rights as a potential creditor,” the company said in a separate statement.
In its response, MGA claimed Mattel's accusations in the suit were the same as those dismissed by Carter in the appeal.
"This lawsuit is part of the obsession that current Mattel executives and their board of directors have to litigate MGA and Isaac Larian and his family to death at the expense of Mattel's shareholders," MGA said.
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