| DEBRA VALENTINE General Counsel DAVID M. NEWMAN (Calif. State Bar No. 54218) Attorneys for Plaintiff UNITED STATES DISTRICT COURT FEDERAL TRADE COMMISSION, Plaintiff, v. PARADE OF TOYS, INC. et al., Defendants. Case No. 97-2367-GTV CONSENT JUDGMENT AND ORDER CONTAINING PERMANENT INJUNCTION RE:
DEFENDANTS WHEREAS Plaintiff, the Federal Trade Commission, has commenced this action by filing the Complaint herein; defendants Wonderful World of Toys, Inc., and Dennis W. Vaughan have been served with the Summons and Complaint; the parties have been represented by the attorneys whose names appear hereafter; and the parties have agreed to settlement of this action upon the following terms and conditions, without adjudication of any issue of fact or law and without defendants admitting liability for any of the matters alleged in the Complaint; THEREFORE, on the joint motion of plaintiff and defendants Wonderful World of Toys, Inc., and Dennis W. Vaughan, it is hereby ORDERED, ADJUDGED, and DECREED as follows: DEFINITIONS For the purposes of this Consent Judgment and Order, the following definitions shall apply: "Franchise" is defined in Section 436.2(a) of the Commission's Trade Regulation Rule entitled "Disclosure Requirements and Prohibitions Concerning Franchising and Business Opportunity Ventures," 16 C.F.R. Part 436 (hereinafter the "Franchise Rule"). The term "franchise" in this Consent Judgment and Order shall encompass any successor definition in any later trade regulation rule promulgated by the Commission. "Business venture" is defined as any written or oral arrangement, however denominated, whether or not covered by the Franchise Rule, which consists of the payment of any consideration for:
FINDINGS 1. This Court has jurisdiction of the subject matter and of the parties, and venue is proper in this District. 2. The Complaint states a claim upon which relief may be granted against the defendants under Sections 5(a)(1), 13(b) and 19 of the Federal Trade Commission Act, 15 U.S.C. § 45(a)(1), 53(b) and 57b. I. BAN ON THE SALE OF FRANCHISE OR BUSINESS VENTURE IT IS HEREBY ORDERED that defendants Wonderful World of Toys, Inc., a corporation, and Dennis W. Vaughan, individually and as an officer or director of defendant Wonderful World of Toys, Inc., whether acting directly or through any business entity, corporation, subsidiary, division or other device, are hereby permanently enjoined and restrained from A. Advertising, promoting, offering for sale or selling any franchise or business venture; or B. Encouraging, advising, or assisting any other person or firm to advertise, promote, offer for sale or sell any franchise or business venture. II. PROVISIONS RELATED TO CONSUMER REDRESS IT IS FURTHER ORDERED that within three (3) business days after the date of entry of this Consent Judgment and Order, defendant Dennis W. Vaughan shall submit to the Federal Trade Commission, by mailing a copy thereof to the Regional Director, San Francisco Regional Office, Federal Trade Commission, 901 Market Street, Suite 570, San Francisco, CA 94103, a truthful sworn statement, in the form shown on Attachment A to this Consent Judgment and Order, that shall reaffirm and attest to the truthfulness, accuracy and completeness of defendant Dennis W. Vaughan's financial statement executed on September 3, 1997, and related documents submitted to the Federal Trade Commission (collectively "the Financial Statement"). The plaintiff's agreement to this Consent Judgment and Order is expressly premised on the truthfulness, accuracy and completeness of the Financial Statement, which contains material information concerning defendant Dennis W. Vaughan's financial condition upon which plaintiff relied in negotiating and agreeing to a Consent Judgment and Order without provisions for consumer redress. If, upon motion by the plaintiff, this Court finds that defendant Dennis W. Vaughan failed to file the sworn statement required by this Paragraph, or failed to disclose any material asset, or materially misrepresented the value of any asset, or made any other material misrepresentation in or omission from the Financial Statement, the Judgment herein shall be reopened for the purpose of determining the amount of consumer redress for which defendant Dennis W. Vaughan may be liable; provide, however, that in all other respects the Consent Judgment and Order shall remain in full force and effect; and provided further that proceedings instituted under this Paragraph are in addition to and not in lieu of any other proceedings the plaintiff may initiate to enforce this Consent Judgment and Order. Solely for the purposes of this Paragraph, defendant Dennis W. Vaughan waives any right to contest the allegations in the plaintiff's complaint. III. PERSONS AFFECTED; CONTINUING JURISDICTION IT IS FURTHER ORDERED that defendant Wonderful World of Toys, Inc., its successors and assigns, shall within thirty (30) days of the entry of this Consent Judgment and Order, provide a copy of this Consent Judgment and Order to its officers, agents, servants, employees and attorneys, and secure from each such person a signed statement acknowledging receipt of a copy of this Consent Judgment and Order, and shall, within ten (10) days of complying with this paragraph, file an affidavit with the Court and serve the Federal Trade Commission, by mailing a copy thereof to the Regional Director, San Francisco Regional Office, Federal Trade Commission, 901 Market Street, Suite 570, San Francisco, CA 94103, setting forth the fact and manner of such compliance, including the name and title of each person to whom a copy of this Consent Judgment and Order has been provided; and it is further ORDERED that defendant Dennis W. Vaughan shall within thirty (30) days of the entry of this Consent Judgment and Order, provide a copy of this Consent Judgment and Order to the officers, directors, agents, servants, employees and attorneys of any firm of which he is an officer, director, owner or shareholder of an interest greater than ten percent or for which he exercises any management or supervisory responsibility, and secure from each such person a signed statement acknowledging receipt of a copy of this Consent Judgment and Order, and shall, within ten (10) days of complying with this paragraph, file an affidavit with the Court and serve the Federal Trade Commission, by mailing a copy thereof to the Regional Director, San Francisco Regional Office, Federal Trade Commission, 901 Market Street, Suite 570, San Francisco, CA 94103, setting forth the fact and manner of such compliance, including the name and title of each person to whom a copy of this Consent Judgment and Order has been provided; and it is further ORDERED that, for a period of five (5) years from the date of entry of this Consent Judgment and Order, defendants Wonderful World of Toys, Inc., and Dennis W. Vaughan, their successors and assigns, shall maintain and make available to the Federal Trade Commission, within seven (7) days of the date receipt of a written request, business records demonstrating compliance with the terms and provisions of this Consent Judgment and Order, including but not limited to all promotional materials (including written materials and scripts, recording or transcriptions of oral presentations) and any materials upon which defendants rely as the basis for any claims made in any promotional material; and it is further ORDERED that for seven (7) years after the date of entry of this Consent Judgment and Order, defendant Dennis W. Vaughan shall notify the Federal Trade Commission within thirty (30) days whenever he changes or discontinues his then-current business or employment; and it is further ORDERED that for seven (7) years after the date of entry of this Consent Judgment and Order, defendant Wonderful World of Toys, Inc., shall notify the Federal Trade Commission at least thirty (30) days prior to any proposed change in the corporate defendant such as dissolution, assignment, sale resulting in the emergence of a successor corporation, or the creation or dissolution of subsidiaries or any other change in the corporation that may affect compliance obligations arising out of this Consent Judgment and Order; and it is further ORDERED that this action, and the relief awarded herein, is in additional to and not in lieu of other remedies as may be provided by law, including other proceedings the plaintiff may initiate to enforce this Consent Judgment and Order, or other civil or criminal remedies; and it is further ORDERED that this Court shall retain jurisdiction of this matter for the purposes of enabling any of the parties to this Consent Judgment and Order to apply to the Court at any time for such further orders or directives as may be necessary or appropriate for the interpretation or modification of this Consent Judgment and Order, for the enforcement of compliance therewith, or for the punishment of violations thereof. THERE BEING NO JUST REASON FOR DELAY, the Clerk of the Court is directed to enter this Consent Judgment and Order forthwith. Dated this _____________ day of _____________, 19____. G. Thomas Van Bebber, Chief * * * * * The Federal Trade Commission, by its counsel, and defendants and their counsel, hereby consent to the terms and conditions of the Consent Judgment and Order as set forth above and consent to the entry thereof. Defendants waive any rights that may arise under the Equal Access to Justice Act, 28 U.S.C. § 2412.
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