Mega Brands has settled a legal battle with the Rosens, the former owners of Rose Art Industries. Under the terms of the settlement, Mega Brands will receive approximately $17.2 million, and the Rosens will give up additional claims that totaled approximately $54.8 million.
Mega Brands acquired Rose Art from the Rosen family in 2005. In 2006, the Rosens filed a suit accusing Mega Brands of insider trading, alleging that the company had known that a toddler died after swallowing magnets from a Magnetix playset in 2005. Mega Brands countersued claiming the Rosens withheld and misrepresented information about serious defects in Magnetix, which the company acquired as part of the 2005 purchase.
Mega Brands recalled the product in March 2006 and in April 2007. In March 2008, the company made a separate recall of its MagnaMan line, due to the same problem.
