DIC Entertainment, producer of children’s entertainment shows such as “Inspector Gadget, “Strawberry Shortcake” and “Madeline,” has sued Speed Racer Enterprises (SRE) to enforce DIC’s television and merchandising rights to the animated series “Speed Racer,” which appears on the Nickelodeon network.
The suit, filed in L.A. Superior Court, alleges fraud and breach of contract. DIC is seeking damages of $5 million plus punitive damages and injunctive relief. Also named as defendants are John and James Rocknowski, the president and vice president of SRE.
DIC attorney Bonnie Eskenazi said: “This is a classic case of seller’s remorse and greed. DIC has brought this character back to life, and now SRE wants the benefit of that renewed life without paying for it. Instead of being grateful to DIC after all the hard work’s been done, they want to cut DIC out.”
According to the complaint, DIC and SRE entered into an agreement in August 2002 under which DIC acquired worldwide exploitation rights to the “Speed Racer” property. But at the last minute, DIC alleges, SRE disavowed the agreement, either to extort a better deal or to shop around the property for a better price. SRE perpetrated the alleged fraud, DIC claims, by causing DIC to delay the exercise of its option to buy certain “Speed Racer” episodes and terminating DIC’s rights under the agreement.
Under the agreement, DIC paid $779,500 plus 50% of gross receipts to be the exclusive distributor of certain classic and new “Speed Racer” episodes and “Speed Racer” characters, including Racer X and Trixie. DIC also got an option to purchase additional classic and new “Speed Racer” episodes from Tatsunoko Production Co., which created “Speed Racer” in the 1960s. Under the option, DIC was to step into SRE’s shoes as the distributor by buying the additional “Speed Racer” episodes from Tatsunoko.
But after DIC was able to re-launch “Speed Racer” on Nickelodeon, SRE refused to give DIC the SRE-Tatsunoko agreement. After months of delay, SRE claimed the option deadline had passed, and it terminated its agreement with DIC.