In a lawsuit filed today in Los Angeles Superior Court, Troll
Company, the Danish owner of the rights to the iconic, wild-haired
Good Luck Troll doll, charged that DIC Entertainment Corporation
fraudulently obtained licensing rights to the Troll by hiding its true
financial condition and then conducted such a disastrously underfunded
roll-out that the Troll was transformed from a "multi-billion dollar
renowned property" into one that was unmarketable.
"This case is really very simple," said Troll Company attorney
Patricia L. Glaser, of Christensen, Glaser, Fink, Jacobs, Weil &
Shapiro, LLP, Los Angeles. "It alleges a deliberate fraud, perpetrated
by a company that was in dire financial straits and desperate to find
a source of fast cash, to deceive Troll Company into licensing away
the precious rights to one of the most famous toys in the world."
According to the complaint, when it began its "urgent pursuit" of
the licensing rights to the Troll character in 2003, "DIC held itself
out as one of the largest and most successful animation companies in
the world... Asked by Troll Company if it had the financial
wherewithal to support a successful and global re-launch of the Good
Luck Troll character, DIC proclaimed that it had sufficient financial
resources and that money would be no problem." In fact, the complaint
states, DIC chairman and CEO Andy Heyward personally assured Troll
Company president and CEO Calle 0stergaard that DIC had all the money
it needed to restore the Troll to its former glory.
Billions of dollars of Good Luck Trolls had been sold in decades
past, but because of copyright difficulties, most of the profits went
to others, the complaint alleges. When DIC made its approach, Troll
Company was just completing its long legal battle to regain sole
ownership of the Troll in the U.S. Finally poised to reap the benefits
from its famous character, Troll Company was approached by several
companies keen on re-launching the Troll. Heyward and others convinced
Troll Company that DIC was the best choice - but their concealment of
DIC´s money problems led to Troll Company once again being denied its
The complaint states that the truth about DIC´s financial
condition was far different than portrayed by Heyward. Instead of
being the successful enterprise it held itself out to be, DIC in fact
was losing millions of dollars a year and teetering on the brink of
financial collapse, facts which DIC "cynically concealed" from Troll
"But DIC´s fraud went even further," the complaint states. While
continuing to pursue the original Good Luck Troll, DIC convinced Troll
Company to give it the rights to create a derivative property called
Trollz, which DIC said would involve a cutting-edge web site,
television series and merchandizing that would maximize the eventual
commercial exploitation of the Good Luck Troll. But, says the
complaint, DIC´s real intention was "to devote its limited resources
to the marketing of the derivative Trollz property, which DIC owned.
As for the Good Luck Troll, DIC´s main interest was not for a source
of revenue for either itself or Troll Company, but rather to eliminate
a potentially competing ´troll´ property from the marketplace and thus
give DIC´s Trollz a clear field."
The eventual release of Trollz in 2005 was accompanied by a great
deal of media interest. However, because of DIC´s limited resources,
it was "an enormous flop," according to the complaint. The promised TV
series was instead released straight to DVD, a promised wireless
component never materialized, and the promised "cutting-edge"
interactive web site debuted many months too late to be an effective
marketing tool and turned out to be "unsophisticated and mundane."
According to the complaint, "The consequences for the Good Luck
Troll were devastating. The bad feelings generated among sublicensees
and retailers because of Trollz left the Good Luck Troll facing a
hostile commercial environment. Indeed, several DIC executives
confirmed to Troll Company that the Good Luck Troll had been so badly
harmed by the failure of Trollz that they recommended keeping the Good
Luck Troll out of the market for a substantial period to give
sublicensees and retailers a chance to forget their negative
experience with Trollz."
The complaint continues: "In short, Troll Company has been
severely damaged by DIC´s fraud. Not only did Troll Company fail to
receive the huge rewards that it had labored for years to achieve and
that DIC had predicted would occur; far worse, DIC took Troll
Company´s Good Luck Troll - one of the most famous toy characters in
the world, which DIC itself described as a ´multi-billion dollar
renowned property´ - and rendered it, by DIC´s own admission,
The lawsuit seeks damages of $20 million in addition to
disgorgement of "all amounts by which DIC has been unjustly enriched."
The lawsuit also seeks punitive damages, as well as a permanent
injunction to prohibit DIC from any further exploitation of both the
Trollz derivative work and the Good Luck Troll character.
Troll Company is represented by Patricia L. Glaser of Christensen,
Glaser, Fink, Jacobs, Weil & Shapiro, LLP, Los Angeles, and Jay S.
Handlin of Carlsmith Ball LLP, Los Angeles.
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