4Kids Revenue Plunges

NEW YORK: 4Kids Entertainment, which is facing a lawsuit over the Yu-Gi-Oh! franchise, has reported fourth-quarter revenues of $4.8 million, down from $16.2 million in the year-ago period, with a net loss that was reduced from $21.3 million to $7.4 million.

For the entire year, revenues fell from $34.2 million to $14.5 million, while net loss was reduced from $42.1 million to $27.2 million.

The company has revealed that it is facing a lawsuit from the owners of the Yu-Gi-Oh! franchise, Asatsu-DK Inc and TV Tokyo Corporation. The suit claims that 4Kids has breached the Yu-Gi-Oh! agreement for failing to pay the licensors approximately $4.7 million with regard to certain audit claims. "The company believes that the claims made by ADK in its lawsuit are baseless and its attempt to terminate the agreement invalid,” said Michael Goldstein, interim chairman of the board of 4Kids Entertainment. "4Kids will vigorously oppose the attempted termination of the Yu-Gi-Oh! agreement and the audit claims. If the matter is not settled, 4Kids will, regretfully, be seeking to recover the full measure of damages from licensors for wrongfully terminating the Yu-Gi-Oh! agreement and causing significant injury to the business of 4Kids."

If the company is unable to win the suit, it says it will "take all actions it deems necessary to preserve its business and assets, including the potential filing of a petition under Chapter 11 of the United States Bankruptcy Code."