July 25 (Bloomberg) -- Pop star Lady Gaga and her management company were sued by MGA Entertainment Inc., the maker of Bratz toys, over allegedly failing to approve a line of dolls in the singer’s image.
The Van Nuys, California-based company, alleging breach of contract in New York state court, is seeking more than $10 million in damages from the pop star, her management company, Culver City, California-based Atom Factory, and Los Angeles-based Bravado International Group, a merchandising company that works with musicians.
MGA Entertainment says in the complaint that it agreed to produce dolls in Lady Gaga’s image in December 2011 at Bravado’s “request and insistence” and paid the company a $1 million fee in anticipation of shipping the products to retailers this summer in time for the holiday selling season.
In April, Bravado Chief Executive Officer Tom Bennett, told MGA’s chief executive officer, Issac Larian, that Lady Gaga, the stage name of Stefani Germanotta, wanted to delay production and shipping of the dolls until her new album is released in 2013, according to the complaint. MGA says the defendants have continued to withhold final approval in order to delay marketing the dolls until next year and instead sell a licensed Lady Gaga perfume called “Fame.”
“Defendants’ conduct is egregious, in bad faith and is pretextual, especially in light of the fact that MGA has, among other things, paid Bravado a $1,000,000 advance, agreed to an excessively generous royalty rate, invested millions in the preproduction of the Lady Gaga dolls and put its reputation and goodwill on the line in order to secure distributors and retail shelf space,” MGA Entertainment said in the complaint.
New York State Supreme Court Justice Jeffrey K. Oing today declined MGA Entertainment’s request for an order requiring Bravado, Atom Factory and Lady Gaga to immediately approve the samples that were submitted to them for review, said Amanda Silverman, a spokeswoman for Lady Gaga.
Today’s ruling couldn’t be immediately confirmed in court records. The two sides are scheduled to return to court Aug. 29, when Lady Gaga will ask the judge to dismiss the lawsuit, Silverman said.
“This is a dispute between Universal Music Group’s merchandising company and MGA,” Silverman said in an e-mail. “There was no legitimate reason for dragging Lady Gaga into that dispute.”
Peter Lofrumento, a spokesman for Vivendi SA’s Universal Music Group, the parent company of Bravado, said in an e-mail that the claims in the suit are meritless and the company will defend itself in court.
A telephone message left at the headquarters of Atom Factory wasn’t returned.
MGA Entertainment estimated the Lady Gaga line of dolls would yield $28 million in revenue for the fall 2012 retail season, and had agreements with at least six distributors, with orders coming from at least 10 countries, according to the complaint.
MGA Entertainment last year won $310 million in damages and fees from Mattel Inc. in a trial over ownership of the rights of the Bratz line of dolls. Mattel in February asked a federal appeals court to reverse the judgment.
The case is MGA Entertainment Inc. v. Bravado International Group Merchandising Services Inc., 652547/2012, New York State Supreme Court (Manhattan).
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