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Lionel Emerges From Bankruptcy As Entertainment Firm

Lionel LLC, which emerged from bankruptcy-court protection last week, will be an entertainment company and not just a toymaker, according to CEO Gerald Calabrese, a former Marvel Comics executive who shepherded the 108-year-old company through bankruptcy. "We're not the distribution and sales mechanism anymore," he says. "We're the intellectual property.

Breaking into the broader toy market is key to Lionel's growth, Calabrese says. During the company's stint under bankruptcy protection, sales for Lionel starter sets--kid-friendly systems that range in price from $129 to $300--more than doubled. Developing new products that appeal to children and getting them on the shelves at big retail outlets is only part of what Calabrese calls the pop-cultural segment of the toy market. He says that in today's marketplace, movies and television are the key drivers to sales.

Rock star Neil Young, who saw his 20% stake in Lionel wiped out under the company's Chapter 11 plan, has also joined Lionel's ownership group. The 62-year-old Young is highly regarded in the model-train industry for his design and technology abilities.

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