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Okay, so you might recall that Mattel won a $100 million judgment and the rights to the popular doll. Bratz maker MGA said it might be forced to shut down as a result of the award. But Mattel's claim to the money is in question because MGA’s newest and largest creditor appears to be first in line to claim the assets. That creditor, Omni 808 Investors LLC, is headed by Bev Hills investor Neil Kadisha, who has ties to MGA CEO Isaac Larian. From the Business Journal:
The situation arose because Kadisha’s Omni 808 bought a loan collateralized by the assets of MGA, apparently including the rights to the Bratz doll. Since that loan is in default, Omni 808 could foreclose and claim its collateral. Omni 808’s secured rights to the assets could challenge Mattel’s court judgment. Theoretically, Mattel could get nothing. Court documents suggest that Kadisha could be a friendly debt holder because Omni 808 is connected to Larian’s brother-in-law. That raises the possibility that Larian could remain in control of the company.
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MGA is trying to prevent the court from appointing a receiver who would oversee the Bratz finances through 2009. It was during this legal tussle about the receiver when Mattel was startled to discover that it may not be first in line to get Bratz and the money. That’s because of some financial maneuvers that occurred while the trial was occurring. In summer 2008, Kadisha’s company bought most of a loan from Wachovia Bank for $110 million. The loan, originally for $313 million, was made to MGA and it was collateralized by the company’s assets, including MGA’s inventory, accounts receivable, and apparently the intellectual property rights of the doll itself. (Wachovia retained $22 million of the debt and exchanged it for unsecured promissory notes.)
Mark Lacter created the LA Biz Observed blog in 2006. He posted
until the day before his death on Nov. 13, 2013.