Wednesday, June 27, 2007, 6/27/2007 11:24:00 AM

Lionel Trains Has Its Bankruptcy Reorganization Plan Criticized By Trade Secrets Claimant

By Todd
In 2004, Lionel Trains was sued by Mike's Train House for allegedly stealing toy-train technology and trade secrets. The case went to a jury and the jury awarded $40.8 million to Mike's Train House, forcing Lionel Trains to file for bankruptcy in November, 2004.

Lionel Trains appealed the $40.8 million verdict and their appeal was successful - in December, 2006 the Sixth Circuit Court of Appeals reversed the trial court verdict and remanded for a new trial. Mike's Train House appealed that decision to the Supreme Court of the United States but they have not decided whether or not to accept that appeal.

Perhaps the most interesting aspect of this case is that Lionel Trains is owned by the Estate of Martin Davis (former CEO of Paramount) and Neil Young. The only comment we have is "hey hey, my my . . . . "

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