THQ has ‘prevailed’ in a dispute brought by Jakks Pacific before ...
THQ has “prevailed” in a dispute brought by Jakks Pacific before the California Court of Appeals to disqualify potential arbitrators, THQ said Monday. Jakks, THQ’s partner in the World Wrestling Entertainment videogame franchise, disclosed late last week in a…
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10-K SEC filing that the Court of Appeals affirmed Los Angeles Superior Court’s ruling that disclosure wasn’t required in its court battle with THQ until after the court named an arbitrator (CED March 4 p8). The companies dispute the preferred return rate in the distribution period for WWE games July 2006 through December 2009. “Following numerous delays” by Jakks, THQ said, it filed in the Superior Court to compel arbitration and name an arbitrator. A trial judge named an arbitrator, but “Jakks petitioned the California Court of Appeals to disqualify all but one of the potential arbitrators considered by the judge, based on its interpretation of when potential arbitrators were required to complete disclosure questionnaires,” said THQ. The Court of Appeals now has “denied” Jakks’s petition, “which will allow the arbitration process to move forward,” THQ said. Jakks claims arbitration has lagged for “a host of reasons,” but THQ Executive Vice President of Business and Legal Affairs James Kennedy said “the sole cause of delay has been Jakks.” THQ believed Jakks’s position in its petition from the judge’s appointment of an arbitrator “was wrong, and the Court of Appeals has now agreed,” he said. “We look forward to moving the arbitration process forward expeditiously,” he said. THQ challenged statements by Jakks on a Feb. 20 conference call about the economics of the videogame joint venture and expectations for WWE videogame sales, saying the remarks “do not reflect the views of THQ or the THQ/Jakks Pacific joint venture.” Under the joint venture operating agreement, THQ is responsible for joint venture operations, THQ said, saying Jakks “is not currently actively involved in joint venture operations.” Therefore, THQ said, Jakks’ statements on the venture’s economics and its expectations of joint venture performance “are not based on any active involvement in the business operations of the joint venture.” THQ CEO Brian Farrell called WWE “a tremendous brand,” saying “we have consistently grown this franchise in the videogame space on a global basis, with life-to-date sales of more than $1 billion.”