Licensing company 4Kids Entertainment Inc., marketer of the once wildly popular Yu-Gi-Oh! trading card game in the U.S., said Wednesday that it filed for Chapter 11 bankruptcy protection.
Shares of 4Kids fell 16.5 cents, or 66 percent, to 8.5 cents on the OTC Bulletin Board.
The children's entertainment company said its filing in U.S. Bankruptcy Court for the Southern District of New York extends only to its wholly-owned subsidiaries in the U.S., and not to its London-based subsidiary, 4Kids Entertainment International Ltd.
The company said it also filed first-day motions to allow it to keep up its everyday operations.
4Kids said filing for bankruptcy protection puts on hold a March 24 lawsuit filed against it by the two companies that own the Yu-Gi-Oh! brand -- Asatsu-DK Inc. and TV Tokyo Japan. The lawsuit claims 4Kids owes the other two companies $4.7 million under their licensing agreement.
Interim chairman Michael Goldstein said in a prepared statement that 4Kids will keep looking into "strategic alternatives" such as a reorganization or buyout.
4Kids has been struggling financially. It reported revenue of $14.5 million in 2010, compared with $34.2 million in 2009 and $41.9 million in 2008. It reported losses for each of the last three years: $27.2 million for 2010; $42.1 million for 2009 and $36.8 million in 2008.
Its shares were delisted from the New York Stock Exchange in June after the company's market capitalization fell due to a restructuring and downsizing. The NYSE requires listed companies to maintain average market capitalization of at least $15 million over any consecutive 30-day trading period.
The company has since traded on the OTC Bulletin Board.