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NEWHALL - 10/01/04 - Bankrupt toy maker Applause LLC will sell its name to rival plush products company Russ Berrie and Co. Inc. for $4 million, according to the Los Angeles Daily News.
 
The stuffed-animal specialist - once an industry heavyweight known for its Mickey Mouse, California Raisin, and Smurf plush toys - has seen its fortunes reverse dramatically in the past six weeks.

After its owner, chairman and chief executive officer, Bob Solomon, took his own life in August the company moved from its Woodland Hills headquarters to a Newhall strip mall and cut its full-time staff by 25 employees.

Solomon's relatives handed interim control to nephew David Socha, and several days later, Applause entered involuntary bankruptcy.

The company changed to Chapter 11 bankruptcy September 23, allowing it to reorganize.
 
According to the paper, corporate counsel Gerard Casale said that it had filed with the bankruptcy court to sell just the name to New Jersey-based Russ Berrie and Co. (RBC) in an all-cash transaction.

To maximize return to creditors, the court will auction the name October 14. If no one outbids it, RBC will have the rights to one of the gift industry's most recognized monikers.

Applause owes about $8 million to creditors, so the transaction will clear at least half of its slate.

Casale told the Daily News that no final decision had been made on the name the company would adopt, though it did keep the rights to its R. Dakin & Co. subsidiary.

The proposed deal does not include any characters or licenses, allowing the company to continue to produce its licensed Snoopy and Raggedy Ann and Andy characters and the proprietary Dream Pets.

RBC itself has been reorganizing lately, saying last week that it would lay off 75 of its workers in the hope of saving $7.5 million in future costs. It also hired a new executive vice president of sales and announced its North American division president and chief administrative officer were leaving.

News of the proposed sale came as a surprise to industry observers as the two companies had been intense competitors in the late 1980s and early 1990s, when Applause was a far more powerful company.

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