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Phil Vischer Projects

Breaking News: Lyrick vs. Big Idea Verdict Overturned!

This just in… a federal appeals court judge yesterday overturned the decision of the lower court in the lawsuit that ultimately led to Big Idea Productions’ bankruptcy.  If you’ve read the online account of the fall of Big Idea Productions, you know about this case.  In summary, in 2002 Lyrick Studios sued Big Idea, claiming Big Idea had breached its distribution agreement with Lyrick by moving its business to WEA (Warner Music).  Big Idea argued that, first, since Lyrick and Big Idea had not yet come to terms or signed a contract, the two parties were working together “at will” and either could walk away at any time.  Secondly, even if one could argue that the two parties working together for 2 years implied a binding agreement, the latest draft of the agreement under negotiation had a clause allowing Big Idea to walk away if Lyrick was sold to another company, which is exactly what happened in 2002 when Lyrick founder Dick Leach sold his company to Hit Entertainment, a large publicly-traded British firm.  So we at Big Idea felt we had two compelling arguments for our decision to move our distribution rights to another distributor.

Lyrick’s new owners, of course, disagreed, and the matter went to federal court in Dallas, TX in Spring of 2003.  Lyrick’s lawyers argued that there was a binding relationship, and that Big Idea, while having the right to withhold consent to a sale of the company, had “unreasonably withheld” that consent.  Big Idea’s lawyers couldn’t believe their ears when the jury in Dallas agreed with Lyrick's arguments.  The judge entered an $11 million judgment against Big Idea Productions that day, sealing the company’s fate.  Bankruptcy filings soon followed and the assets of the company were sold in a bankruptcy auction to Classic Media of New York.

Well, what do you know.  Big Idea’s creditors, unhappy that half of the proceeds from the asset sale would go to Lyrick Studios, appealed the decision, asking an appeals court judge to look into the case.  And as of yesterday morning, August 9, 2005, the appeals court agreed with Big Idea.  There was no binding agreement between Lyrick and Big Idea as of the time of the lawsuit.  Either company could have walked away at any point.  Big Idea did, in fact, have the right to move its distribution to another company.  Lyrick’s complaint, the appeals court determined, was bogus.

So what changes?  Well, Hit/Lyrick doesn’t get a penny of the proceeds from the sale of Big Idea.  That’s great news, because it means all the creditors – from freelance writers to local print shops – that were owed money when Big Idea was forced by the lawsuit to declare bankruptcy will get most of their money back.  It was a bad day for Hit/Lyrick, who not only lost that case, but will now most likely lose the $12 million lawsuit they recently brought against WEA for, they claim, “inducing Big Idea to break it’s agreement with Lyrick Studios.”  Once a federal court has concluded there was no agreement between the two companies, it’s pretty hard to argue that case with much success.

What it doesn’t do, of course, is turn back the clock.  Big Idea Productions still went bankrupt, and the assets were still sold.  No money will flow back to Lisa and I, or any of the other shareholders of Big Idea Productions.  But, after all the stories in the press and all the rumors, to have a judge acknowledge that we did, in fact, act with integrity in our business dealings with Lyrick feels pretty darn good.

- Phil

6 CommentsLeave a Comment


  • Reply

    Joel Osborn

    14 months ago

    Woo Hoo! That is great news.

    And it’s gotta feel great, too.

    Nice to see the court system work correctly once in a while.

    Any change of an appeal of the appeal?

  • I am glad this was overturned, but I so sorry that the sale of Big Idea couldn’t have been prevented.

    I found the link to your blog through Amy Welborn’s site (open book) and have now subscribed to it via Bloglines. I have loved Veggie Tales since I stumbled upon Larry singing about Santa on a Christian channel one year. (I didn’t have any children yet, nor neices or nephews, and my entire family thought I was insane because I kept going on about this fantastic singing cucumber and a tomato dressed as Santa!)

    I was really saddened when you had to sell, but we still love our Veggies.

    My girls are thrilled that the Veggies are on NBC, and we’ll watch it, but they sure did miss QWERTY when we caught it last week. At least we still have all our videos!

    God bless you, and I will keep you all in my prayers!

  • Reply

    CoraSmallman

    14 months ago

    Praise GOD!!!!!!!!!! I was so upset when the story broke of the lawsuit, that we boycotted Bob the Builder!!! I sure wish it did turn back the clock for you and Lisa as far as having to sell out. You have put so much of yourself into making your ‘big idea’ a reality, I hate that the greed of an individual or group of individuals at HIT had such an impact on your dream! Put you can’t keep a good guy down, and I know that things are moving along swimingly nonetheless!

    Your biggest fans,

    the Smallmans

  • Reply

    Me

    14 months ago

    Yay! No more lawsuit!

  • Reply

    shanydan

    3 months ago

    So who owns Bob and Larry now?

  • Reply

    Rg

    18 weeks ago

    I know this is late, but have you let it go (VeggieTales) entirely? Have you ever thought of Kickstarter? Rachel Coleman (signingtime.com) couldn’t get PBS or anyone else to air her shows (anymore) because they were “too educational”, so she went to Kickstarter and started fundraising and advertised on social media (Facebook, Twitter, etc.) as a result people from all walks of life and especially parents of children with special needs like myself (Her videos taught my autistic, non-verbal son to sign….then it facilitated speech!) scraped up funds to financially back her projects. She currently produces straight to video (and CD’s or mp3′s) or download shows and music. If you were to do something like this I’m sure that there would be plenty of people like myself who would be more than happy to help promote and fund your projects. If it wasn’t for VeggieTales (especially through the singing which brings out my son from his autistic world, which a live person doesn’t) I don’t think my severely autistic son would ever have any inkling about God and His teachings. God bless you and all those who made VeggieTales a reality. Matt. 7:7-8

    My wish, no, my prayer is that someday someone (maybe you?) would make multi-sensory videos (with signing and captioning) similar to Rachel Colman’s but unlike her shows, they would teach the faith to deaf and special needs children (and maybe adults with special needs too!) who only respond to such formats. Just think, bringing Christ to the forgotten and neglected souls….. Matt. 19:14

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