Mattel to Sue Former Executive and Her Attorney for Slander

Mattel Inc. on Thursday said it intends to take legal action against a former executive and her attorney, calling their allegations of irregular accounting practices and recent comments about a company-sponsored probe of those accusations slanderous.

The statement from Mattel is the latest flap stemming from a wrongful-termination suit filed against Mattel last year by Michelle Greenwald. In the suit, the former senior vice president for marketing alleged that Mattel used improper accounting practices to inflate earnings.

El Segundo-based Mattel denied the allegations and in April hired a former top enforcement official at the Securities and Exchange Commission, Gary Lynch, to conduct an independent investigation of the accounting practices.

Greenwald’s attorney, Joel Kozberg, raised questions about the impartiality of that probe, according to news reports on Thursday, when he discovered that a letter he sent to Lynch on Monday, which noted the allegations as well as possible areas of inquiry, was promptly forwarded to Mattel Chairman John Amerman.

But Mattel spokesman Glenn Bozarth said that forwarding the letter “was entirely appropriate . . . because it was part of the ongoing investigation.”

He continued: “In light of this repeated slander of our company, we will now take action by exercising every available legal remedy to defend Mattel from these unwarranted and baseless public attacks and to recover damages from Ms. Greenwald and her counsel for the harm they have done to the company and our shareholders.”

Bozarth said that more than one lawsuit might be filed but declined to comment further on Mattel’s legal plans, including when any action might be taken.

Kozberg on Thursday said he was prepared to respond.

“If they bring any legal action, based on what I presently know, it would be unwarranted and unfounded, and I would defend myself to the fullest extent of the law, and Ms. Greenwald as well,” he said.

Mattel said it expects the Lynch probe to be completed soon.

Bloomberg Business News contributed to this report.