Yu-Gi-Oh! creators TV Tokyo Corp. and Nihon Ad Systems have filed a multimillion-dollar lawsuit against 4Kids Entertainment and terminated the company’s license for the show, according to The Hollywood Reporter.
The suit, filed last week in federal court in New York, alleges 4Kids owes the plaintiffs millions of dollars for making secret agreements with TV networks and home video distributors as well as making improper royalty deductions, the Reporter writers.
The plaintiffs filed the suit after exercising their option under the licensing agreement to audit 4Kids’ financial books. The suit says the audit reveals 4Kids sought to hide its income from deals with such companies as FUNimation, Cartoon Network and Majesco in order to avoid having to pay royalties to the plaintiffs, the Reporter writes.
The suit seeks $4 million in damages and was filed after several meetings between the parties to attempt to resolve the issue failed to do so.,
What effect this will have on 4Kids’ Toonzai block on The CW is unclear. 4Kids just announced its lineup for the 2011-2012 season and included new episodes of Yu-Gi-Oh! as a centerpiece of the lineup. The block also is slated to include new episodes of Dragon Ball Z and Magi-Nation, as well as classic episodes of Sonic. Possible new series included Tai Chi Chasers.