Lionel L.L.C. may be out of bankruptcy by the end of this month. Attorneys for both Lionel and MTH Electric Trains (formerly Mike's Train House) reached a deal last fall which needs approval by a U.S. bankruptcy judge on January 31.
The plan to emerge from Chapter 11 bankruptcy would pay off creditors and MTH, assuming Lionel can obtain new financing and reach an agreement with MTH over their claims.
MTH claims Lionel owes tens of millions of dollars, including a $40,775,745 jury verdict in 2004 for stealing trade secrets on models produced in South Korea, and a separate patent-infringement claim for $17.5 million for using MTH's patent on smoke-puffing technology. The $40 million verdict was overturned by an appeals court and a new trial was ordered. A settlement would negate the need for a new trial. ____ Mark Mathu