Brainytoys fields legal claims

Brainytoys has revealed it has received a number of legal claims against former directors as shares in the stock were suspended today pending the announcement of its financial position.

In a brief update to the market late this afternoon, the O'Connor-based company said a brief of evidence is being compiled in relation to potential significant legal claims against former directors for duty breaches in respect of a number of matters, which it did not detail.

Comment was being sought from managing director Alexander Aguero at time of publishing.

Brainytoys added that it was continuing discussions in the United States over further funding arrangements including a possible merger proposal with a US-based toy company.

It said it is also in negotiations with prospective purchasers of the group's assets.

Shares in Brainytoys last traded at one cent.

Late last year the company revealed it was in urgent need of funds after it forfeited its contractual rights to the Marshmallow product range, licence and business after failing to settle.

It left Brainytoys with three businesses under its belt, which are expected to generate sales of some $14 million in the 2008 calendar year.

The company has previously said that if it was not able to raise capital or generate funds from asset sales by November 14 last year, the directors expected to appoint a voluntary administrator.