FW: Press Release

["Craig Berry" <craig@collectiblecaboose.com>]

If you haven't seen this, thought you might find this interesting.  MTH
has 2 response emails (so far).  I'll send these out under separate
cover.

 
Craig Berry
The Collectible Caboose
store: (512) 259-9494
mobile: (512) 657-3128


-----Original Message-----
From: BOB RYDER [mailto:BRYDER@LIONEL.COM] 
Sent: Tuesday, June 13, 2006 1:47 PM
To: BOB RYDER; CHUCK HORAN; CINDY NEDRY; DEB ESSER; JAMES KEELEY; J. Don
Reece; KATHLEEN STEINER; MICHAEL BRAGA; Richard Grutzmacher
Subject: Press Release


Dear Lionel Dealer/Wholesaler:
Following is a press release for your information.

JERRY CALABRESE COMMENTS ON LATEST MTH LAWSUIT
June 13, 2006

Dear Friends,
The least favorite part of my job is commenting on legal issues, but I
thought it was important to set the record straight from the outset and
confirm that Lionel has, again, been sued by MTH.  
Yesterday, despite its prior statements to the contrary, MTH sued Lionel
for alleged infringement of its smoke and speed related patents, seeking
unspecified damages and injunctive relief.  MTH also asked the court to
preemptively rule that its own trains do not violate four of Lionel's
patents, or to declare our patents invalid.  Lionel does not believe
that it infringes MTH's patents and intends to vigorously contest these
claims and defend its patents, which pre-date the MTH patents in
question. 
We're disappointed that MTH has again decided to resort to litigation at
this time, especially since the alleged smoke and synchronized speed
related patent infringement issue was already filed in the bankruptcy
court as a $17 million secondary claim, and would have had to be
resolved before Lionel could emerge from bankruptcy, in any case. There
are a lot of possible explanations as to why MTH chose to bring this
action now, but I'll refrain from interpretation or speculation. 
What I do know for sure is that last week the Federal Court of Appeals,
in Cincinnati, heard our arguments about why we believe the MTH judgment
against Lionel was wrong and should be thrown out, mandating a new
trial.  Obviously, there are no certainties when it comes to the
decisions of courts, but based on the tough questions the judges asked
the MTH lawyers, we're cautiously optimistic of a favorable decision. 
Based on their newest legal action, I'm beginning to think that MTH's
perception of last week's oral arguments may be the same as our own. 
As I've repeatedly said, I'd prefer that the rivalry between MTH and
Lionel be settled in the court of public opinion, by consumers who vote
with their purchases, and not the courts of law. Having said that,
please be assured that we're determined to handle both at the same time.
Despite the additional burden and expense caused by this new MTH
lawsuit, neither Lionel's business nor its commitment to making and
selling the best possible model trains will be disrupted. Thanks again
for your continued support. 
Best Regards, 
Jerry Calabrese