MONTREAL, Nov. 9 /PRNewswire-FirstCall/ - MEGA Brands Inc. (TSX: MB) is
pleased to announce the settlement of all outstanding litigation with Lawrence
Rosen, Jeffrey Rosen and Sydney Rosen (the "Rosens"). The Rosens filed suit in
2006 claiming earnout payments and damages relating to the Rose Art
acquisition. MEGA Brands countersued claiming the Rosens withheld and
misrepresented information about serious defects in the Magnetix product line
purchased as part of the transaction.
"This is great news for our company. The settlement validates our
long-standing view that serious defects in Magnetix were not disclosed to MEGA
Brands before it acquired Rose Art. It also justifies the company's decision
to dispute the Rosens' claim to an earnout," said Marc Bertrand, President and
CEO of MEGA Brands. "A settlement of this magnitude mid-trial speaks volumes
to the merits of our case."
Under the terms of the settlement, MEGA Brands will receive cash of
approximately $17.2 million. In addition, the Rosens forego all claims for
additional consideration which totalled $54.8 million. As a result, the
Corporation will record a recovery of $72 million in its results for the third
quarter ended September 30, 2009.
The Corporation expects to report its third quarter ended results on November
13, 2009.
About MEGA Brands
MEGA Brands is a trusted family of leading global brands in construction toys,
games & puzzles, arts & crafts and stationery. They offer engaging creative
experiences for children and families through innovative, well-designed,
affordable and high-quality products that deliver on our Trusted Brands
promise. Visit http://www.megabrands.com for more information.
The MEGA logo, Mega Bloks, Rose Art, MagNext and Board Dudes are trademarks of
MEGA Brands Inc. or its affiliates.
Forward-Looking Statements
All statements in this press release that do not directly and exclusively
relate to historical facts constitute "forward-looking statements". These
statements represent the Corporation's intentions, plans, expectations and
beliefs. In certain instances, these statements require us to make assumptions
and there is significant risk that these assumptions may not be correct.
Furthermore, these statements are subject to risks, uncertainties and other
factors, many of which are beyond the Corporation's control. The Corporation
disclaims any intention or obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise, other than as required by applicable legislation. Readers
are cautioned not to place undue reliance on these forward-looking statements.
More information about the risks that could cause our actual results to
significantly differ from our current expectations can be found in the "Risks
and Uncertainties" section of our 2008 annual MD&A and Q2 2009 MD&A.
SOURCE MEGA Brands Inc.
Investors and Analysts: Eric Laniel, (514) 333-5555, ext. 2620,
Elaniel@megabrands.com; Media: Carine Sroujian, (514) 333-5555, ext. 2669,
Csroujian@megabrands.com
