Who knew Strawberry Shortcake could be such a little troublemaker? According to a story in The Los Angeles Times, Cleveland-based American Greetings, which owns the rights to the famous ’80s character Strawberry Shortcake has won a temporary restraining order to stop the sale of licensing partner DIC to Toronto-based Cookie Jar.
DIC, which produces the new animated series based on the character, has generated over $3 billion in retail sales from the property. An Ohio judge has granted American Greetings’ request for a temporary restraining order to stop the sale of DIC to Cooke Jar. On Friday, American Greetings filed a suit that alleges that a 2001 agreement with DIC stops the firm from transferring the rights to Strawberry Shortcake without its approval.
“We expected this, and frankly we don’t consider that it has any merit,” Andy Heyward, chief executive of DIC Entertainment, told the L.A Times. “We are prepared to move forward with the merger, and we are moving forward.”
Under the proposed deal, Cookie Jar would acquire DIC’s stock for $0.7153 a share, or a total of $31.5 million. It also agreed to assume $42 million in outstanding debt and pay $14 million in transaction fees. After the merger, DIC would become a division of Cookie Jar, and Heyward will receive a five-year contact to manage DIC. Currently, the Burbank-based studio employs 220 people. The merger will create a huge library of animation (over 6000 hours) which will include DIC’s shows such as Inspector Gadget, Horseland, Sonic the Hedgehog, Sabrina and Madeline with Cookie Jar’s family of series such as Caillou, Johnny Test and Magi-Nation. Cookie Jar will also acquire DIC’s one-third interest in the international TV channel KidsCo, which is also owned by NBC-Universal and Corus Entertainment.
Toper Taylor, president of Cookie Jar Entertainment, said the acquisition of DIC would add a valuable licensing and merchandising business to Cookie Jar’s portfolio. “We spent more than a decade arm-wrestling each other for network [time] slots,” Taylor told the Times. “But we’ve always engaged in mutual admiration.”