Hatchimals Class Action Lawsuit Withdrawn

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Apr 19, 2017, 08:00 ET

TORONTO, April 19, 2017 /PRNewswire/ - Spin Master Ltd. (TSX:TOY), a leading global children's entertainment company and the fourth largest toy manufacturer in the U.S. according to the NPD Group*, announced today that the consumer class action lawsuit concerning its hit toy, Hatchimals®, has been voluntarily withdrawn by the plaintiff, Jodie Hejduk (Jodie Hejduk v. Spin Master Corp. and Spin Master Inc., Case Number: 1:2017at00052, filed on January 19, 2017 in the Eastern District of California).

The Hatchimals toy, which launched October 7, 2016 to critical acclaim, is comprised of a plush robotic creature inside an egg shell. Children nurture the shell and through touch, help the Hatchimals hatch by activating the patented technology. Due to overwhelming demand as gifts, retailers sold out of Hatchimals just prior to the 2016 Christmas holidays and as a result, hundreds of thousands of Hatchimals were opened on Christmas Day.

There was an unanticipated flood of calls to Spin Master's customer care department causing a backlog of unanswered customer inquiries and some consumer frustration. However, Spin Master quickly recognized the issue and doubled its customer care team, extended customer services hours and added troubleshooting tips and how-to-videos to its product website to assist customers in hatching the toy. The class action suit, which has just been withdrawn, arose out of that consumer frustration. Spin Master's subsequent efforts to deal with the backlog of customer inquiries have garnered universal praise from its customers and a recognition that there is no need for lawsuits where a company has provided an exemplary response.

Mark Geragos, the lawyer who voluntarily withdrew the law suit on behalf of the plaintiff added, "Spin Master's proactive response was very successful and, to date, they have either responded to all of the outstanding questions or provided replacements, or refunds to consumers. We applaud Spin Master for the highly effective manner in which they have dealt with their customers. Given these factors, we have decided to voluntarily withdraw our class action."

"We view the plaintiff's voluntarily withdrawal of the class action suit as a validation of our Hatchimals product and an endorsement of the efforts undertaken by Spin Master to address all of the consumer questions," said Ben Gadbois, COO and Global President, Spin Master Ltd. "Spin Master takes great care and pride in its products and values its customers. With a popular toy like Hatchimals, it was unfortunate that we were not better able to anticipate the influx of customer questions that would arise over the holiday period. However, we are proud of the efforts the company and our employees made to respond to all of our customers."

*Source: The NPD Group Inc. / Retail Tracking Service, January-December 2016

About Spin Master Corp.

Spin Master (TSX:TOY; www.spinmaster.com) is a leading global children's entertainment company that creates, designs, manufactures, licenses and markets a diversified portfolio of innovative toys, games, products and entertainment properties. Spin Master is best known for award-winning brands including Zoomer™, Bakugan™, Meccano™, and 2017 Toys of the Year, Hatchimals™, Air Hogs™ and PAW Patrol™. Since 2005, Spin Master has received 82 TIA Toy of The Year (TOTY) nominations with 21 wins across a variety of product categories, including 13 TOTY nominations for Innovative Toy of the Year, more than any of its competitors. To date, Spin Master has produced six television series, including 2007 success Bakugan Battle Brawlers and current hit PAW Patrol, which is broadcast in over 160 countries and territories globally. Spin Master employs over 1,000 people globally with offices in Canada, United States, Mexico, France, Italy, United Kingdom, Slovakia, Poland, Germany, Sweden, the Netherlands, China, Hong Kong, Japan, and Australia.