NEW YORK, May 5 (Reuters) - Legendary model train maker Lionel LLC has emerged from bankruptcy protection, the company’s Web site and court documents show.
"After more than seven long years of legal warfare, a brutal financial restructuring, and a lot of corporate soul searching, Lionel has fully emerged from bankruptcy," Chief Executive Jerry Calabrese wrote in a note on the company's Web site, www.lionel.com.
Lionel, which has been in business since 1900, sought bankruptcy protection in 2004 after a trade-secrets dispute with MTH Electric Trains.
“Lionel’s emergence from bankruptcy has been achieved by paying all of its creditors all of the money they were owed, in addition to interest for all the time during which the company was in bankruptcy,” Calabrese wrote.
Rock musician Neil Young, who once had a 20-percent stake in Lionel, will still have a role at the company, Calabrese wrote in a separate statement on the Web site.
“As he has for the better part of the last two decades, Neil will be working with our engineers and product guys to make sure that Lionel continues to honor its pledge to make the best and most affordable model trains in the world.” It was not clear if he still holds a stake in Lionel or what his specific role would be and the company did not return calls for comment.
Lionel, which sells its model trains at big-box retailers like Target Corp (TGT.N) and hobby shops, and MTH settled their dispute last October, paving the way for Lionel to obtain financing to exit bankruptcy.
Documents filed with the U.S. bankruptcy court of the Southern district of New York show that Lionel emerged from bankruptcy on May 1.
Calabrese wrote that in addition to Young, pre-bankruptcy owners Luella Davis and Dick Kughn would remain involved with the company, along with Guggenheim Investment Management LLC, which provided much of the new financing for the company’s exit from bankruptcy. (Reporting by Chelsea Emery, Editing by Toni Reinhold)