MGA Sues Banks for Allegedly Concealing Accounting Fraud

MGA Entertainment has filed a lawsuit (MGA Entertainment, Inc. v. Deutsche Bank AG, BC458341) against several large European banks, alleging that the banks concealed accounting fraud by French toymaker Smoby prior to MGA’s purchase of the company. The suit alleges that in or around 2002, Jean-Christophe Breuil—of the Breuil family, which held the controlling stake of Smoby—was appointed CEO of Smoby Group at which time he started “embezzling hundreds of million of Euros from the company,” says A. Barry Cappello, attorney for MGA.

Cappello alleges “the banks’ conduct during the sale’s due diligence period led MGA to believe that Smoby was a valuable, legitimate enterprise.” After MGA owner Isaac Larian was approached about buying the company, the banks allegedly manipulated Smoby’s internal finances and now the company stands to lose as much as $300 million because of the acquisition.

The banks named in the lawsuit are: Deutsche Bank, Barclays Bank, Credit Agricole Corporate and Investment Bank, Caisse Regionale de Credit, Agricole de Franche Compte, Commerzbank 1814968586  Aktiengesellschaft, Deutsche Bank Luxenbourg, and Societe Generale.

About the author

Guest Contributor

Guest Contributor