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Michael S. Shuster, Daniel P. Goldberg, Kara F. Headley, Dorit Ungar, Kristina "Tina" R. Juntunen, David D. Holahan


After four weeks of trial in Manhattan federal court, KBT&F achieved for client MEGA Brands Inc., a major toy manufacturer, a full release of $60 million in earnout claims allegedly arising from MEGA Brands's acquisition of Rose Art Industries, Inc., a toy company owned by plaintiffs Lawrence and Jeffrey Rosen. Under the settlement, MEGA Brands also recovered from the Rosens $17 million on its counterclaims for fraud, breach of the stock purchase agreement, and related claims arising out of the Rosens' failure to disclose defects in one of Rose Art's key product lines, Magnetix. Four weeks into the six-week trial before Judge Laura Taylor Swain, U.S.D.J. in the Southern District of New York, after both Rosen brothers admitted under cross-examination on the stand that they knew of the defects prior to the acquisition and never disclosed them to MEGA Brands, and after one of the Rosens' accounting experts was disqualified after voir dire, the case settled with the Rosens recovering nothing on their earnout claims, and instead paying MEGA Brands over $17 million in damages. KBT&F partners Michael Shuster and Daniel Goldberg, and associates Kara Headley, Dorit Ungar, Kristina Juntunen and David Holahan led MEGA’s representation.