RC2 settles recall suit
Settlement to cost company $30 million, report says
From Playthings -- Kids Today, 1/24/2008 12:38:00 PM
OAK BROOK, Ill.—RC2 Corp. has settled a class action lawsuit filed against the company last year following the recall of several of its Thomas the Tank Engine Wooden Railway toys due to excessive levels of lead in their surface paint.
The settlement will cost the company $30 million, according to USA Today. In connection with the settlement, RC2 said it expects to record a charge in its 2007 financial results in the range of $3.5 million to $4.5 million, net of tax, to cover estimated additional replacement costs or refunds, donations, notice charges, claims administration and legal fees.
“We’re pleased that we’ve been able to reach a proposed settlement, which if approved, will resolve this nationwide class action in a manner that helps us to continue to build parents’ trust,” said Curt Stoelting, RC2’s CEO, in a statement released earlier this week.
The Circuit Court of Cook County, Ill., has granted preliminary approval to the agreement.
