Indiana company Fundex Games files for Chapter 11

Fundex Games, an Indiana company that makes games, puzzles and toys, has recently filed for Chapter 11 bankruptcy. The company has declared liabilities of $8.9 million against its assets worth $1.5 million.

The company had been a significant player in the global toy market with offices in New York and Hong Kong, generating $20 million in annual revenue. But the loss of an important product, and a number of lawsuits against the company, has caused recent financial difficulties.

Some of the legal controversy surrounded one of the of the company's most popular games, Phase 10. Phase 10 is a card game now second only to Uno in popularity. The game's inventor alleged Fundex developed spinoffs without properly compensating him. Although the case reached a confidential settlement, Fundex later sold the game to Mattel. Multiple other companies have also filed collections and breach-of-contract suits against Fundex.

The company hopes to keep the business going, but may need to liquidate its assets as part of the bankruptcy proceedings.

Chapter 11 can give businesses the opportunity to reorganize their finances while continuing operations. In a repayment plan submitted to the bankruptcy court the business documents how profits will be used to pay off some or a majority of unsecured debt. It also gives the business owner flexibility in dealing with secured debt and financial obligations like leases.

An attorney can provide further information to businesses considering Chapter 11 bankruptcy, and advice about creating a repayment or debt reorganization plan that will be in a business's best interests.

Source: Indystar.com, "Plainfield's Fundex Games files for Chapter 11 bankruptcy," Dana Hunsinger Benbow, Sept. 11, 2012

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