PRESS RE

[prewardude]

LOL! [(-D]

[highrailjon]

I guess that leaves MTH no option other than to start copying Weaver and Atlas stuff!![:D][:D][:D]

[cbojanower]

Here is another thing to think about...

Tony Lash (MTH's un-official mouth piece to the internet) made some comments immediately after the suit along the lines that now that the Lionel cash was coming forth MTH would start producing and introducing new items to the market.

I would venture to read into that comment that without the 40 Million MTH doesn’t have the ca***o grow, and in a decreasing market may find itself short of the operational cash it needs to continue. If Lionel succeeds in delaying the cash long enough, AND the market doesn't get better, MTH could be the one without many options

[Anonymous]

QUOTE: Originally posted by hobo1430

As I tried to post earlier, in my opinion, the judgement seems outlandish. This is all the more outrageous since MTH made their start copying Lionel products. [:(!]

LOL - who's copying who? It was the Koreans who stole the MTH blueprints for Lionel. Lionel then produced trains using the stolen MTH blueprints. Seems like the real copycat is Lionel. Time for a reality check Hobo![;)]

[Anonymous]

As I tried to post earlier, in my opinion, the judgement seems outlandish. Be that as it may, if I have read correctly, the judgement wasn't enough for MTH, they went further by filing an injunction against Lionel forbidding then to sell engines that have little if anything to do with the plans. I also recall reading that MTH is suing Broadway Limited and QSI. Is that how MTH is contributing to the toy train market? This is all the more outrageous since MTH made their start copying Lionel products. [:(!]

A couple of random thoughts:

1. How can the court award MTH $12 million in "future profits" when Lionel can't sell the engines?
2. What is Lionel's yearly profit? It would be interesting to compare that to the size of the award.
3. Wasn't this a jury trial? I wonder how many of the jurors ever owned an O gauge train.
4. I personally will not buy MTH products until they change their business practices. However, it will likely have little effect on MTH.
5. On the other hand, if several train enthusiasts write local department stores stating they will no longer purchase trains from the store if they carry MTH, that might get noticed.

We may have little control over what happens in the courts, but we do have influence over what happens in the hobby. (P.S. I personally would not put preasure on my local hobby shop--they will be squeezed by this as it is and the last think we need is more local shops folding.)

Just some thoughts.

[Anonymous]

What comes around, goes around!![soapbox]

[Big_Boy_4005]

QUOTE: Originally posted by altera6

GET OVER IT!

The original Lionel went out of business in 1969. Moreover, as I recall from reading many an article in this same publication, the original Lionel Co. spared no expense to bury its competition, anybody remember American Flyer? If MTH eventually picks up the Lionel brand name so be it, they will have been the fourth company to do so. To the folks at Lionel, “What goes around comes around”. If is was not for competitive pressure from MTH among others I'm sure Lionel's quality today would be just as shoddy as it was in the 70s, 80s and 90s.

This is mostly untrue. The Lionel name has only changed hands ONCE, when the original Lionel corporation finally went out of business in the late 90's. All other incarnations of the train manufacturer have paid a royalty for the use of the name. I believe that today's situatiion is no different.

What may very well be true is that Mr Cowen Sr was a shrewd and possibly ruthless business man. Of course those were different times, and he wasn't trying to sue his competition into submission. I'm sure that the likes of Ives and Gilbert felt the pressure.

[Anonymous]

GET OVER IT!

The original Lionel went out of business in 1969. Moreover, as I recall from reading many an article in this same publication, the original Lionel Co. spared no expense to bury its competition, anybody remember American Flyer? If MTH eventually picks up the Lionel brand name so be it, they will have been the fourth company to do so. To the folks at Lionel, “What goes around comes around”. If is was not for competitive pressure from MTH among others I'm sure Lionel's quality today would be just as shoddy as it was in the 70s, 80s and 90s.

[nblum]

It states pretty clearly in Mr. Calabrese's comments that the purpose of the filing is to allow Lionel greater freedom to appeal the verdict. They will doubtless be appealing both the verdict and the dollar amounts in this judgement.

[Big_Boy_4005]

QUOTE: Originally posted by TheTruthofTrains

QUOTE: Originally posted by Big_Boy_4005

There is a small part of me that wonders if the whole thing wasn't a trap, and those plans were the bait.

If that's the case, Elliot, the next logical question would be who laid the trap. Looking at the various parties involved, one might well ask when L's former chief engineer, who figured prominently in receiving some pretty incriminating emails and apparently did nothing about them, actually started working for a cutthroat L competitor - after he left L, or before?

It would be very interesting if that was the case. All I really know is that Lionel was caught with their hand in the cookie jar, and that the cookies belonged to MTH. Whose hand reached in, and why the cookies were left out, may end up coming out in the appeal process.[;)]

[conllee]

p.s. If MTH had 40 mil in damages and lost sales on just a couple of engines, then they must be ripping us off BIG TIME!

[conllee]

I don't think 'lil Mikey realizes he will never see a dime of the lawsuit money. I heard he wanted to know were the check was after the judgement. He also forgets he started his company by copying Lionel trains. Gotta go fini***hrowing the rest of my MTH catalogs in the trash were they belong.

[Anonymous]

***ANOTHER LIONEL PRESS RELEASE***

From Lionel, LLC at the URL:
http://www.lionel.com/CentralStation/NewsStand/viewrelease.cfm?newsID=113

Lionel Chapter 11 Filing: Frequently Asked Questions
11/16/2004

Lionel Chapter 11 Filing:

Frequently Asked Questions




The MTH lawsuit against Lionel entered a new phase when the judge officially entered a $40.8 million judgment against Lionel for the alleged misappropriation of designs by a subcontractor. As a result of this action, Lionel filed for Chapter 11 bankruptcy protection on November 15, 2004.

Q. Why is Lionel filing for bankruptcy?

A. In Lionel’s case, filing for Chapter 11 bankruptcy protection is simply a tool that helps facilitate the appeals process. Taking advantage of bankruptcy protection will not only allow Lionel to pursue an eventual reversal of the unfair court decision, it also protects our ability to develop and deliver the high quality product and unparalleled service that have been Lionel trademarks for over 104 years.

The MTH judgment alone forced Lionel to take this action. Lionel is a sound company that enjoys healthy sales, growing demand for its products and the best brand and reputation in the business.

Q. Does filing for bankruptcy mean that Lionel will eventually go out of business?

In the four years since it began, this lawsuit has never had any effect on the day-to-day operation of Lionel, nor will it affect the company during what we are sure will be a long appeals process. Under absolutely no circumstances will this lawsuit force Lionel to go out of business. Thanks to the loyalty of our valued customers and a product line that has made us the industry leader for over a hundred years, Lionel’s business remains healthy and robust. Nothing will interfere with our current and aggressive plans. In fact, over the next year, we will begin introducing a series of new and exciting product innovations and promotional programs that will begin a new era of growth for our hobby.


Does filing for bankruptcy mean that MTH will eventually end up owning Lionel?
No. This judgment, as egregious and damaging as it is, will not result in an absorption of Lionel by MTH or any other of our competitors.


Will any Lionel employees lose their jobs as a result of this filing?
A. No employees will lose their jobs as a result of Lionel entering into Chapter 11 bankruptcy protection. Taking this action will not impact the way Lionel manages and conducts its day-to-day business.



How long will Lionel remain in Chapter 11?
Lionel will remain in Chapter 11 for as long as it takes the appeals process to play out. Again, we are entering into Chapter 11 for one reason and one reason only: to ensure that business continues unabated throughout the entire length of the legal proceeding.

[Big_Boy_4005]

QUOTE: Originally posted by M. DONALDSON

QUOTE: Originally posted by Big_Boy_4005
Lionel's bankruptcy has given MTH an empty victory, not the ca***hey sought.

All Mike wants are the rights to the Lionel name. Wellsping can keep the rest.

This may be true, about Mike's desires, but it is also the one thing that will most likely not happen.

My understanding is that Wellspring is holding the Lionel name seperately, so even if Lionel LLC goes chapter 7, the name is not up for grabs. The name never belonged to the bankrupt entity. If I'm not mistaken that's why an LLC was chosen to operate the manufacturing end of the business. Wellspring knew the value of the asset, and wasn't going to risk it. Wellspring may even have anticipated such an attack.

Someone please correct me if I'm wrong.

[Anonymous]

QUOTE: Originally posted by Big_Boy_4005

There is a small part of me that wonders if the whole thing wasn't a trap, and those plans were the bait.

If that's the case, Elliot, the next logical question would be who laid the trap. Looking at the various parties involved, one might well ask when L's former chief engineer, who figured prominently in receiving some pretty incriminating emails and apparently did nothing about them, actually started working for a cutthroat L competitor - after he left L, or before?

[Anonymous]

QUOTE: Originally posted by Big_Boy_4005
Lionel's bankruptcy has given MTH an empty victory, not the ca***hey sought.

All Mike wants are the rights to the Lionel name. Wellsping can keep the rest.

[Big_Boy_4005]

QUOTE: Originally posted by seacoast

MTH has always been out to be #1 now their wish has come true. However I do not believe that court litigation on MTH's part will help the toy train venue/hobby, industry at all. I see Lionel as a classic name and line that will live on to fight another day.

MTH is the new kid on the block with the big stick- that stick being $cash$ and court judgments. It is because of a few visionary individuals in the late 1980's and Lionel included in that list, that the toy train industry is what it is today.

Lionel's actions may not have been conducive to good business practices however I do not see MTH as an Angel either, their motives should be scrutinized

I don't agree that Lionel's bankruptcy has elevated MTH to the top position. Perhaps that is the case within the hobby, with members of the in crowd, but to the general public, most have no idea who or what MTH is. That is the power of the Lionel name, and in spite of the bankruptcy, the company lives on.

Lionel's bankruptcy has given MTH an empty victory, not the ca***hey sought.

I do agree that Lionel did wrong to produce trains from designs that were not their own. There is a small part of me that wonders if the whole thing wasn't a trap, and those plans were the bait. Regadless, it's over. The question now, is whether Lionel will be appealing the verdict or simply the award.

[Anonymous]

QUOTE: Originally posted by Sask_Tinplater

This is indeed a sad day! Whether or not Lionel was in the wrong in the lawsuit can be debated, but I think that we can all agree that $40 million was certainly very excessive and definetly not a fair judgement! As bad as this news is, I don't think that we have any major things to worry about. As Lionel said, it will continue its operations as it is now without any changes (at the moment). I don't think that we have to fear Lionel going out of business or anything like that. The Lionel name means so much by itself that even if Lionel LLC goes under (which I highly doubt), somebody will step in to get things back in order.

I wonder what J. L. Cowen would have to say about all this?

It doesn't matter if we think that the amount was excessive. We're not the ones making the decisions in this case.

Everyone has to remember that there's a difference between Chapter 7 & Chapter 11. A Chapter 11 filing means the company plans to keep operating & intends to restructure their debt & pay their creditors. This is a good thing.

Chapter 7 is the bad one -- if you file for Chapter 7 protection, it means the company ceases to exist & all of its assets get sold off. The creditors line up in the order of seniority for the debt they're owed & they each get paid until the money runs out. Anybody left in line when the cash is gone is SOL.

There are lots of companies that have taken advantage of Chapter 11, including many airlines that are flying today.

Regarding JL Cowen & his thoughts, there was a time, as I understand it, when good ol' JL was the Mike Wolf of the world. Just ask any Ives fan.

Tony

[Anonymous]

This is indeed a sad day! Whether or not Lionel was in the wrong in the lawsuit can be debated, but I think that we can all agree that $40 million was certainly very excessive and definetly not a fair judgement! As bad as this news is, I don't think that we have any major things to worry about. As Lionel said, it will continue its operations as it is now without any changes (at the moment). I don't think that we have to fear Lionel going out of business or anything like that. The Lionel name means so much by itself that even if Lionel LLC goes under (which I highly doubt), somebody will step in to get things back in order.

I wonder what J. L. Cowen would have to say about all this?

[overall]

I wondering if there will be backlash against MTH for what has happened? I wonder if they will lose sales and market share because of this?

George

[seacoast]

MTH has always been out to be #1 now their wish has come true. However I do not believe that court litigation on MTH's part will help the toy train venue/hobby, industry at all. I see Lionel as a classic name and line that will live on to fight another day.

MTH is the new kid on the block with the big stick- that stick being $cash$ and court judgments. It is because of a few visionary individuals in the late 1980's and Lionel included in that list, that the toy train industry is what it is today.

Lionel's actions may not have been conducive to good business practices however I do not see MTH as an Angel either, their motives should be scrutinized

[cheapclassics]

To all,

Although I do not wi***o ignite a flame war, I think it is a sad, sad day that a brand name that has lasted over 100 years has fallen on hard times. I will leave it to others to discuss whether the fate was deserved or not. My grandfather worked in a clothing store for fifty years and owned the store the last ten years of it's existence. When he finally retired and closed the store, the company name had been in use for almost 150 years. My father worked for an auto parts concern that had lasted over 100 years. Recently the chain was purchased by a larger concern. If the Lionel name does go under, it will be another lost icon.

With a heavy heart,

Keep on training,

Mike C. from Indiana

[FJ and G]

Geez, why don't they just apologize for their misdeeds and move on?

[nblum]

" Taking advantage of bankruptcy protection will not only allow us to pursue an eventual reversal of this unfair decision,"

Can anyone say "change of venue?" :)

[highrailjon]

Whatever the future holds for Lionel will have no bearing on MTH ever seeing one thin dime out of my pocket, anyway. Theres to many other great manufacturers out there such a Atlas, Weaver, K-Line, and 3rd Rail.[:)] My wallet is my jury, the verdict is in, and I rest my case your honor.[:D]

[Tony Lash]

PRESS RELEASE


Lionel LLC Files For Chapter 11 Protection

Chesterfield, Michigan – November 15, 2004 – Lionel LLC, the nation’s number one model train manufacturer, today announced that it has filed a voluntary petition in the Bankruptcy Court of the Southern district of New York for protection under Chapter 11 of the U.S. Bankruptcy Code. The filing was prompted by a $40.8 million judgment against the company for the alleged misappropriation of a competitor’s toy train designs by a subcontractor.

Lionel’s day-to-day operations will continue as usual, including meeting all merchandise shipping obligations customary for the holiday selling period and rolling out new products on schedule. The company remains dedicated to creating and manufacturing the quality product for which it has long been known.

Jerry Calabrese, the recently named CEO of Lionel, said, “The MTH judgment alone has forced us to take this action. Lionel is a sound company that enjoys healthy sales, growing demand for our products and the best brand and reputation in the business. Having said that, the size and weight of this judgment is just too much for what is essentially a small business to bear. Taking advantage of bankruptcy protection will not only allow us to pursue an eventual reversal of this unfair decision, it will enable us to create, manufacture and ship our products in our normal and usual way.”

About Lionel LLC
Lionel LLC is one of the world’s leading marketers of model trains and accessories. Established in 1900, the Lionel name is the most widely recognized brand in the toy train industry and one of the most recognized brands in America. Lionel has been at the center of every major innovation in toy train manufacturing and marketing since its inception.

# # #

1Chapter 11 of the U.S. Bankruptcy Code allows a company to continue to operate its business and manage its assets in the ordinary course of business. Congress enacted Chapter 11 to enable a debtor to preserve its going concern value and operations, as well as to provide its employees with jobs and to satisfy creditor claims based upon the value of the reorganized company.
LEASE LIONEL