The Lombard-based company that created Bob the Tomato, Larry the Cucumber and other cartoon stars of the popular "VeggieTales" series has been sold at an auction for $19.3 million.
New York-based Classic Media LLC won approval Thursday from a federal bankruptcy court judge in Chicago to buy the assets of Big Idea Productions Inc., the creators of the cartoon characters.
Big Idea Productions has been in financial trouble for more than a year despite commercial and creative success.
Classic Media manages or owns the rights to cartoon characters Rocky and Bullwinkle, as well as the rights to "Lassie" and "The Lone Ranger."
The bid approved by U.S. Bankruptcy Judge John H. Squires was nearly $12 million higher than an initial offer made by Classic Media in late August, just before Big Idea Productions announced it had filed for bankruptcy protection.
Big Idea, which launched the "VeggieTales" series of children's videos, books, games and music about 10 years ago, listed assets of $8 million and more than $43 million in liabilities in court filings.
Once the sale is completed in December, Big Idea's creditors will be paid amounts "that no one in their wildest dreams thought would be possible," said Charles Schulman, bankruptcy attorney for the company and a partner at the Chicago law firm of Sachnoff & Weaver.
Big Idea was founded in a spare bedroom by Phil Vischer, the company's chief executive officer and main creative force. The first video, "Where's God When I'm S-Scared?" was released in late 1993.
The tales, populated with vegetables that talk and sing, are a mix of wacky entertainment and moral lessons rooted in the Bible. The goal for Vischer and his collaborators was to deliver Sunday morning values with Saturday morning fun.
Once the largest animation studio in the Midwest, Big Idea has operated out of leased space in the Yorktown Center shopping mall since 1999.
With its winning bid, Classic Media will acquire Big Idea's intellectual property--the computer-animated cartoon characters, the copyrights and trademarks, and works in progress.
Under the terms of the deal, Classic Media is not required to offer employment to the core creative team that produced "VeggieTales" and its spinoffs. But Terry Pefanis, who took over in February as chief operating officer at Big Idea, said Classic Media has indicated that it intends to produce new videos and other products.
"They will continue the brand and continue to support the mission of the company," Pefanis said.
Yet to be resolved are details about the ownership of some licensing and distributor rights.
Big Idea's annual revenue was about $40 million in 2001 and 2002, and the company has sold an estimated 30 million videos and DVDs. But losses were more than $18 million in 2002, according to court filings.
The company's financial woes resulted in part from its release last fall of a full-length film, "Jonah: A VeggieTales Movie." Though the film won critical acclaim and generated $25 million at the box office, Big Idea saw little or no return after the distributor and the theaters took their share of the receipts.
Another blow came earlier this year when Big Idea was ordered by a federal jury in Texas to pay $10.6 million in a breach-of-contract lawsuit filed by a former distributor.
Classic Media had entered into a preliminary agreement to purchase Big Idea's assets for $7.5 million. But that was described as an opening bid for an auction that ended around 8:30 p.m. Tuesday. The auction attracted six other bidders, in addition to Classic Media, Schulman said.